It’s officially springtime! And you know what that means…both the flowers and the property market are in full bloom.
Historically, spring buying season (September - November) is the time of year when a whole host of new properties come onto the market and when buyers are on the lookout for a new home to ring in the New Year. More supply means more choice for buyers, but also, it means more competition.
Sprinkle some historically low interest rates into the mix, as well as continuing uncertainty and COVID restrictions making people anxious to buy and sell, and you’ve got yourself a pretty tricky market for buyers to navigate, especially first timers.
So, we’re bringing some of our best tips, insights and experience together in one place to help any potential homebuyers in our community set themselves up for purchasing success during the busy season ahead.
Understand the property buying process
There’s no doubt that purchasing a property is a huge milestone, and for many of us, features high on our list of financial goals. However, with Australian house prices seemingly forever on the increase, particularly in our capital cities, the steps between wanting a property of your own and actually getting one can often feel disconnected and overwhelming.
So, let’s break the whole process down step by step, in language we can all understand, to help you feel more ‘at home’ with the process of buying one.
Get real on timelines
If you’ve got ‘purchase a property before Christmas’ on your 2021 bingo card, chances are you’ll be looking to make some moves in the next few months. So, now that the spring buying season has well and truly sprung, let’s have a chat about purchasing time frames and what you need to keep in mind if you want to be in your new place before the year is out.
Get your finance pre-approval
Anyone in the process of purchasing a home will tell you: it’s a jungle out there. In springtime especially, competition is fierce and it’s important to take advantage of all the tools available to help ensure you’re the winning party come auction day (or private sale). And one of the very first places to start is getting a loan pre-approval. This means you’ll know exactly how much you can afford, and that you are actually able to borrow the amount you need from the bank.
When it comes to property, we all have different needs and different priorities. Getting clear on your goals for the purchase and what you’re hoping to achieve - whether it’s owning your first home, or buying an investment property to flip in years to come - will help determine what the next few months look like for you.
If this is your first home...
While buying your first home is a major milestone and goal for many of us, how the process *actually* works often feels like a bit of a mystery.
One of the biggest hurdles first home buyers have to overcome is saving for a deposit. This initial down payment can be enough to keep us trapped in the mindset that property won’t be possible for us. But we’re here to tell you this: you can get your foot in the door with a much lower deposit than you’ve been told, in some cases even with no deposit at all - and this can be music to the ears of many a first home buyer who is feeling priced out of this sizzling market.
Almost half of our community is made up of First Home Buyers, so we have plenty of resources and extra tips to help you understand your loan options and navigate the market as a first timer.
If this is your 'next' home...
Whether you’re craving more space, looking to downsize, or making a long-awaited sea (or city!) change, the decision to purchase when you’ve already been in the market for a while can be a little different to doing things the first time around. If you’re looking to buy your next home this spring, you need to account for both your current lifestyle and financial circumstances as well as your ideal future lifestyle and finances. Things to consider include:
- Your future goals and lifestyle needs
- Whether you can use your current home’s equity to buy your next property
- The costs of buying your next home such as stamp duty and conveyancing fees
If you’re buying an investment property...
For investors looking to expand their property portfolio, purchasing an investment property can be a wise move. However, not all properties are worthy of investment and the costs of purchasing can be an expensive barrier to entry for potential investors. To help you make an informed decision, it’s important to consider things like:
- Your investment strategy and risk appetite
- The types of loans you can access for an investment e.g. interest only (IO) or principal and interest (P&I)
- The potential rental returns on a property if you plan on leasing it
- Positive versus negative gearing
Be sure to clarify your objectives and timeframe from the beginning so that you give yourself the best chance of purchasing a property aligned with your financial goals and resources.
Assemble your property buying posse
We’ve all heard there’s no ‘i’ in team, but neither is there one in ‘property purchase’, which is why having a team of trusted professionals by your side during the property buying journey can be worth its weight in gold.
Here are some of the sidekicks you might want to recruit to your property buying dream team:
What they can do for you:
To borrow money you need financial documents such as income statements and tax returns. Beyond preparing those vital documents, and dotting the i’s and crossing the t’s to make sure you don’t get carried off to the Big House for tax fraud, an accountant can be a really valuable part of your property buying team, particularly if you are self-employed. Even better, one with specialist knowledge of the property market can help you make a shrewd investment.
→ Mortgage adviser
What they can do for you:
You can go into your nearest bank or lender, scroll through and compare options online and apply for a loan. Or, you can get the help of a mortgage adviser (or mortgage broker). They’ll be able to crunch the finance numbers and highlight loan options that best suit you, then liaise with the banks to get you a loan. A good broker will not only determine how much you’re able to borrow from various lenders, but also how much you should borrow, based on your lifestyle and the market.
→ Buyer’s agent
What they can do for you:
Buying property can be hectic – talking to agents who are focused on the seller, trying to suss out hidden information, trawling property databases and physically inspecting properties in your spare time. Not to mention months of worrying about negotiations and auctions. A good buyer’s agent can keep you calm through the buying process, providing you access to industry knowledge including market value and silent listings (properties not going to market).
→ Solicitor or conveyancer
What they can do for you:
One of the most important and essential responsibilities of a solicitor or conveyancer in the property process is the preparation of all the documents you need. They will also be the one that reviews the purchase contract (to make sure there are no hidden legal nasties) and manage the transfer documents to ensure the property is rightfully and legally transferred to your name. It’s also the conveyancer’s job to ensure that the documents comply with legal regulations in your respective territory or state. Pretty crucial stuff!
Our tips for buying a property in a 'hot' market - with Kellie from Scoutable
With Australian house prices rising at their fastest rate in more than 17 years, the prospect of buying a property in a hot market can feel very overwhelming, especially for first home buyers. So, if you feel like you’re never going to find a place, that you’re being priced out of where you want to buy, or that you keep getting beaten to the dotted line - you are not alone.
In this so-called ‘sellers market’, what are some things buyers can do to give themselves the best possible chance of purchasing success? To answer exactly that, we sat down (distanced, of course!) with principal buyer’s agent and long-time friend of Pure Finance, Kellie Landrey from Scoutable, to bring you 10 tips for buying a property in a hot market and to hopefully help tip the ‘sales’ in your favour.
Buying a property can often feel like a Big Deal (capital B, capital D). But it doesn't have to be the biggest deal with the right knowledge, advice and support.
While we’re not going to say it’ll be blooming fabulous, it will certainly be a little more enjoyable and a whole less stressful with the right people around you and a clear idea of what you want and what you’re in for.
As always, we are here for any advice and guidance that you need!
The finance information contained in this post is general advice only, and doesn't take into account your personal circumstances or goals. You should always reach out, or seek professional advice, before making any financial decisions.