Buying a dream home in Sydney!

     What are the key things to consider while buying a house?
1.       Do I buy a House / Villa/ apartment?
2.       Do I buy Re-sale or new?
3.       How do you decide on a budget:
a.       How much you can borrow?
b.       How much saving you have?
Suggestion: Do not dig into all your savings. You might need it for renovations after you buy.
1.       Area
2.       Schools
3.       Transport
4.       Grocery stores
5.       Safety
Suggestion: Give preference to area and if required stretch your budget reasonably. This will ensure two things; one, peace of mind and higher returns in long run.
 
Do I need a pre-approval of loan for buying a house?
·       It is advisable that you do it either through a bank or a mortgage broker
·       It is also useful if you go for an auction property

What are the key aspects to check when going for an inspection?
1.       Ensure the house has good Sunlight and air circulation
2.       Walk around and see there are not external and internal wall damages (Not all but some agents do hide them)
3.       Take a look at the roof to if there are any visible damages
4.       Ask for the age of the house and ownership history
5.       See whether the kitchen has a gas or cooktop connection (Some people prefer gas connections)
6.       Have a look at the neighborhood – watch out for safety around.
7.       If you are interested then, ask the agent whether they have an inspection report, if yes then get or buy it – worth an investment. Read it to see whether the super structure is sound, there are no major damage repair required or Termite/ant infestations.

    How do you quote a price?
Generally, a property for sale will have a lower and upper limit. E.g. 700,000 to 760,000
·       Look for property reports from the real estate website, it will give you an indication of price
·       Ask, for a property valuation price from your mortgage broker.
Most often than not property indicative property prices will be near/below the bottom end of the above sale price limits.
·       If you reckon that this ticks all your checkboxes and the property on inspection looks good then put forward your best price e.g. 720000

    What happens after you quoted your price?
·       The agent should accept your offered price formally
·       Then the agent will present all offers to the owners and it is up to the owner’s discretion to move forward
Suggestion: Sometimes agents generally plays to push the prices up, ensure you do not get trapped in a counteroffer game, try to be around your budget. Remember you are not in an Auction or price discovery game!

    What happens once the offer is accepted via a private treaty?
·       If offer is accepted, you have a 5-day cooling off period and you a pay non-refundable .25%
·       During this period ensure you do the following activities:
    o   Engage independent solicitor to go through all documents as provided by the seller’s solicitor.
    o   Engage independent building inspection with respect to pest / termite/ structural / roof aspects
·       The word independent is important, because neither the solicitor nor the building inspection guys should have any vested interest in completing the deal. This is the only last time you have to find whether you have a lemon!
·       The steps after these are pretty much governed by the NSW fairtrading and you can refer to the following site for further details:
https://www.fairtrading.nsw.gov.au/housing-and-property/buying-and-selling-property/buying-a-property/gazumping
 
How’s an auction different and what is the best strategy?
·       An Auction is a price discovery game where the highest bidder wins it !. (Ensure you are clear about the rues of the auction - read through i and know your rights.)
·       Generally, if you win the auction you will have to buy the property in what ever condition it is in, hence it is advisable that you do get the inspection report upfront or get it done if there’s none available from the seller.

·       Isn’t that risky?
o   Yes it is, but sometimes during these price discovery sessions the real value comes out which might be below and could be a real gain. Remember an auction is primarily geared to benefit the seller so if you are in an Auction do your homework well and ensure that you exit at the right price and do not exceed your budget!

Last but not the least, I do not see many homes for sell now- why?
·       There is a season to this too!
·       Primary season for selling a home is during the following period:
    o   Spring: Sept – Oct – Nov
    o   Second season - March- April – May
·       Have patience – give at least 6-9 months to find your perfect home!
 
I hope this helps you in finding your dream home and I definitely wish you have a hassle free journey.
 
Disclaimer: The views discussed here are from my own personal experience and in no way is related to any other party. It is important that the reader do their own independent verification before buying.