Property Buying Tips 16/05/12

When making the decision to buy a property has been made, there are many things that must first be considered before you can start putting in offers / bidding at an auction. The first and probably the most important part of making a purchase is setting up your finance. Whether it be an investment property or a home, the finance is first and foremost.

Whether or not you are going to use a mortgage broker or go straight to your current bank for a loan, it is definitely worth speaking with a finance professional whether it be a financial planner or independent mortgage broker. The reason I would suggest this is because there are so many different loan types and structures out there it is important you understand what is best for you. For example; if you are purchasing an investment property, what LVR (loan to value ratio) do you apply for? do you use your current home as security to purchase the investment property?, Do you release equity from your current home?, how much equity do you release?…the list goes on. All of these questions are very important and the answers to these questions come best from and independent financial advisor.

Once you have your finance in place, you are ready to start looking for and educating yourself on the Melbourne property market. This does not mean you go out on a Saturday and start throwing your hand in the air at auction. You need to research property values in the area that you are looking in. This can be done by speaking with agents and asking them for sale prices, looking at auction results (available on this website) and comparing what homes have sold in the area that you believe are directly comparable with one another. When you are doing your “comparable sales” research, be sure not take the “asking price” as a guide as to what the property is worth. the only true way to determine a properties worth is through comparable sales history.

Once you have determined the value of properties in the areas you are looking to purchase, you can now start looking to buy / bid at auctions (please also see “understanding the sale” for tips and hints on how to bid / negotiate). All properties being sold in Victoria must be sold with a Section 32 (Vendor Statement) which is a detailed document regarding the property for sale. This document will also need to be looked over and understood to ensure you know what you are buying into. Once you have been successful in purchasing a property, you will need to engage a conveyancer / solicitor to handle the settlement of your property. There are many other aspects to consider after the purchase such as using a quantity surveyor to calculate depreciation on all fixtures and fittings should your purchase be an investment, do you need a property manager etc. If you are finding it all too much and would like independent property advice, there are services out there such as buyers advocacy services which can walk you through the process.

All of the points mentioned above, along with others, are very important to consider when buying a property. Always make sure you understand what it is you are actually buying and under what loan structure you are buying with.


Sam Rapke

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10 Responses to this article

 
Scott May 16, 2012 Reply

Interesting read, great information to take into consideration

 
Esan Pilai May 16, 2012 Reply

Mate,

A very insightful read Sam. Very helpful tips, especially about the very first step. More often than not, the property lawyers in our firm come across people who have either not consulted a broker or planner. As lawyers, the whole property settlement procedure then becomes inundated with questions and situations that could have been resolved in the initial stages of the Property Game.

Great work mate, keep up the informative blogs.

Regards,

Esan Pilai
………………………………..
Barrister and Solicitor

 
Andrew Schwab May 16, 2012 Reply

Very helpful information here. My partner and I have considered buying a home for some time but we have very little knowledge about it all. This article has definitely helped us answer a few queries.

 
Mirin Jobra May 16, 2012 Reply

Great advice Sam.

 
Wilson Longam May 16, 2012 Reply

These key tips has helped me revaluate my decision of rushing into buying an investment property. Now I have a detailed understanding of this procedure.

 
Jess May 17, 2012 Reply

After going through this process just recently I couldn’t agree more. It’s so easy to get carried away looking at new places but it is so important to get the financing sorted first.

 
Brad May 17, 2012 Reply

Very helpfull tips. This will definatley come in handy as I am about to go through the same process

 
Jordan May 17, 2012 Reply

Really interesting stuff , will be very helpful when me and my partner start to look for our first place.

 
House Location June 21, 2012 Reply

Really appreciate you sharing this blog post.Really looking forward to read more. Really Great.

 

Hey, your information that you spread here is really interesting. It is very informative post for me because I want to buy a new house. Thanks for sharing.

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