Buying a property is likely the biggest purchase you will ever make, so taking the time to understand the process and check all the boxes is essential. It’s about reducing the risk of missing out on a great property and the chance of buyer’s remorse after settlement day. Read on for six things to do to ensure you make a well-informed decision and buy a home that is right for you.
1. Work with a mortgage adviser to get pre-approval
Before you make an offer on a house – really, before you even start house hunting – you need a clear understanding of how much you can borrow.
While it’s important to make a budget to understand how much you’re willing or able to pay, your numbers won’t necessarily match the amount you can borrow. Lenders have their own systems for determining what is affordable. Getting pre-approval for a mortgage is a game-changer. It defines your maximum budget, identifies you as a serious buyer and gives you more certainty when making an offer.
There are huge benefits to working with a mortgage broker like Building on Basics to get preapproval:
- We have access to multiple lenders and are across the current offerings in the market, meaning we can compare options to find the best option for you. If your circumstances are challenging, we know which lenders are more likely to work with your unique situation.
- We are industry experts who can give advice and guidance to help you make well-informed decisions and avoid potential pitfalls.
- We simplify the application process compared to you approaching lenders on your own. We handle the paperwork and communication with lenders on your behalf. As a result, we help you present your financial information in the best possible light to improve your chances of approval and get a faster preapproval turnaround.
- We bring negotiating power. With our established relationships with lenders, we’re not shy about negotiating on your behalf where possible to secure the most favourable terms, such as lower interest rates, reduced fees or a cash incentive.
2. Work with a good real estate agent
Enlist the help of a reputable real estate agent who specialises in the local market. An experienced agent can give you insights and advice, negotiate on your behalf, and guide you through the buying process.
3. Understand property sale methods
In New Zealand, properties are typically sold through private treaty or auction. Each method has its pros and cons. Familiarise yourself with the sale method of the property you’re interested in and adapt your strategy to suit.
4. Research the property and the area
Thoroughly research both the property you’re interested in and its neighbourhood. Look into:
- Whether it fits your needs. It can be easy to fall in love with a property, especially when it has a point of difference or is particularly attractive. But while a two-bedroom renovated 1920s villa with an extensive rose garden may look gorgeous, it’s not practical for a family of 5 who don’t garden! Make a list of must-haves to keep your search focused and realistic, and hopefully you’ll find a suitable place with some nice-to-haves.
- The property condition. Consider getting a building inspection, especially for an older property. Your lender may require a report before they approve the property. Include any necessary maintenance in your budget.
- The property title and LIM report. Get a lawyer to check for any risks and issues.
- The location. Evaluate the proximity to schools, public transportation, amenities, and your workplace. Check for upcoming construction projects or council plans for the area that might impact the property’s value.
5. Factor in additional costs
Buying a property involves more than just the purchase price. Remember to account for additional costs, such as:
- Legal (conveyancing) fees
- Moving costs
- Due diligence costs, such as valuations, building inspections and LIM reports
- Ongoing property, contents and mortgage insurance
- Ongoing maintenance
6. Take deep breaths!
House hunting can be intense, especially when you find the perfect home and want to lock it in. However, try to maintain a level-headed approach for your own sake and those around you! Avoid rushing into a decision, and be ready to walk away if the deal doesn’t align with your budget or expectations. If you miss out on a great property, remember that new properties are always coming on the market; an even better property could become available in a week. Taking a philosophical approach will greatly affect how you experience the property market rollercoaster.
Purchasing a home is a significant milestone, and we’re here to support you throughout the process. Remember, taking the time to do your due diligence can save you from potential headaches in the future. If you have any questions or are ready to start the preapproval process, reach out, and we can get you on your way to buying a home.