Saving for a deposit isn’t the only Herculean task involved in buying a home for the first time. From untangling red tape to deciphering loan documents, there are plenty of potential hazards to trip up rookie purchasers.
We asked 10 recent first-home buyers what they wish they’d known before they bought.
Tessa Kelman bought an apartment in the Sydney suburb of Rose Bay. She now knows more about property finance than she ever thought she would.
“It was complex learning about fixed and variable loans and the fact you can mix the two together,” Kelman says. “We held off buying a little longer so we could save enough to avoid having to pay lender’s mortgage insurance. My advice would be to seek financial advice early so you’ve got a more realistic and refined target.”
When Dylan Malloch bought a house in the Queensland suburb of Griffin, he struggled to find information about dealing with the existing tenants.
“Information regarding what rights tenants have versus what rights purchasers have is difficult to find, particularly regarding bond, cleaning, repairs and exit dates,” Malloch says. “I advise purchasers to seek good legal advice prior to settlement to make sure they know their rights and what is reasonable to request.”
Melissa Davey bought an apartment in Brunswick West in Melbourne. She wasn’t prepared for the sexist attitudes she encountered from some agents.
“They would ask me questions like, ‘Is someone coming to help you at the auction?’ and expected me to refer my decisions to others,” Davey says. “I also wish I had prepared a better plan of attack for what to do if a property I bid on passed in. That happened with the apartment I bought, and I just had to wing it from there.”
Rachael Nesbitt, who bought an apartment in Ashfield, Sydney, says she should have decided on her must-haves from the outset.
“I’d never even thought about sunlight before but we eventually decided we wanted somewhere that got a lot of light and was close to public transport,” she says. Next time, she’ll also be more realistic about how long it can take to find the right place (hint: ages). “Lastly, everything is negotiable: from bank fees to interest rates, loans, electricity prices and internet. You just have to ask.”
After Penelope Collaros signed a contract to buy an apartment off the plan at Botanica in the Sydney suburb of Lidcombe, she switched from permanent employment to contract work.
“I’m told this could present challenges when it’s time to apply for a loan,” Collaros says. “There are also sometimes delays with off-the-plan projects and I probably didn’t pay enough attention to researching the growth potential of apartments versus houses.”
Lukas Szymanek says he wishes he had been more decisive during his year-long search, which ended when he bought a new house at Fairwater in Blacktown, western Sydney.
“During that year, property prices went up by 30 per cent,” Szymanek says. “If I had acted sooner, I could have saved a lot of money. Of course you should always look for a good deal and a bargain price, but you’re not always going to find one. If you keep waiting, you’re going to miss a lot of opportunities and waste a lot of time.”
After the disappointment of missing out on several properties at auction, Sarah Greenaway decided it would suit her better to limit her search to places for sale via private treaty. She ended up buying a townhouse which had passed in at auction in Botany, in Sydney’s east.
“If I had my time again, I wish I’d known that a lot of real estate agents will send you on a bum steer,” Greenaway says. “Several times we were lured to auction on the premise that we were virtually a ‘shoo-in’ and numbers would be limited, only to end up outbid in the end by up to $150,000.”
Riannon Nicolacopoulos decided to scrap her five-year plan to buy a property by herself when she found an off-the-plan terrace at Shell Cove in Shellharbour, on the NSW south coast, while house-hunting for her partner.
“I learnt the importance of being flexible in my plans and ready to act quickly,” she says. “I had saved enough to go halves in the deposit, and we don’t have to make any more repayments until the project is finished. With Frasers Property, it all fell into place fairly quickly and easily. I know that doesn’t always happen when people buy off the plan.”
Lauren Gallinar recently paid a deposit for an off-the-plan apartment in Wollongong, south of Sydney. The experience has taught her to be open to paying more if the right property presents itself.
“I went $20,000 over what I had originally estimated as my maximum,” Gallinar says. “I thought it was worth going over my limit for the beach view, and I’ll have at least an extra 2½ years before it’s completed to save.”
Swee Soo says she and her husband underestimated the amount of work it would take to renovate an old house in the outer Melbourne suburb of Vermont.
“We did not anticipate things to go wrong the way they did,” she says. “Delays, shoddy work, problems with tradies, discovery of asbestos in our kitchen, unexpected repair work – issues seemed to crop up one after another on an almost daily basis … It had to be the most stressful and frustrating experience in our lives.”
This article was originally published by Domain on 13 October 2016. It represents the views of the author only and does not necessarily reflect the views of AMP.
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Renovating and reselling properties can be a good money-making exercise, or a very expensive one if you go in unprepared.