Avoid worrying about what you may have forgotten by ensuring you’ve covered these smart essentials of home buying.
When buying your first home, there are a lot of things you need to get in order. Some are obvious, like getting your finances together. However, some others aren’t quite as clear.
If you’re thinking of buying your first home, here are some essentials to consider before taking the plunge.
1. Get organised early
From home loan pre-approval to First Home Buyer Grant applications and everything in between, you’ll be expected to hand over piles of documents throughout the buying process.
Consider keeping an organised file of your pay slips, tax documents, copies of various ID (birth certificates, passports etc.), proof of shares, bank statements, written references and so on.
Also, consider whether you’ll need to have any of these documents certified and get on to this before you even start your property search. You don’t want to be rushing around taking care of nitty gritty details when you’re ready to make an offer.
2. Get thorough inspections
Before you’ve laid down any deposits, it’s vital to check off a few inspections, particularly a pre-purchase building inspection.
You may fear it will delay the purchase or add to your mounting costs, but this isn’t the section to skip!
A pre-purchase inspection can detect drainage issues, mould, rot, foundation and structural issues as well as a range of other faulty features in the home. It can also detect anything in need of repair or help estimate costs of repairs down the track.
Remember this may not include a pest inspection, which is also an essential step.
3. Create or update your will
For most of us, real estate will be our single largest asset. Therefore, it makes sense to create or update your will.
“It’s important that real estate is distributed in accordance with the homeowner’s wishes upon their passing,” State Trustees lawyer and will writer Jason Falzon tells realestate.com.au.
“If you pass away without a valid will (‘dying intestate’), intestacy laws will apply. This means that the law will dictate who receives your assets upon your passing,” Falzon says.
“These people may include family members who you are no longer in contact with and/or ex partners.”
This could likely become an issue for many especially if you do not have any immediate family, have a former spouse/defacto partner, a blended family or a complex relationship with your family member(s).
Even if you have a simple family structure, Falzon informs that “passing away without a will usually leaves behind an unnecessary mountain of stress for your loved ones during an already difficult time.”
Another reason to have a will is to legally record how you want real estate and other assets to be distributed.
For instance, do you want someone (say a housemate or relative like a parent or child) to live in your real estate after your passing but not necessarily inherit the asset itself? Put it in your will. Do you want to give your real estate and your household belongings to different people? Put it in your will.
Understanding the ownership of your real estate is also essential.
For example, did you buy real estate with another person? If ‘yes’, you should be made aware that if you own real estate ‘jointly’, a surviving co-owner will automatically receive your share of the real estate when you pass away regardless on the terms of your will. On the other hand, if you own real estate as a ‘tenant in-common’, your share of the real estate will be distributed through your will.
If you need help preparing a will or recording special wishes regarding your real estate, book a Will Consultation with an expert will writer who can guide you through the process and prepare a will for you.
Otherwise, if your circumstances are straight forward and you have the confidence to give it a go yourself, an Online Will is a great option.
4. Update your insurance policy
The admin is not over yet! Once your contracts are signed, you may want to update your insurance as soon as possible. While laws vary between states regarding responsibility for the home during the settlement period, in many cases you may need to get building insurance to cover your purchase ASAP.
Furthermore, contact your insurer to ensure your contents are covered during and after you move into your new place.
Starting early on this step may also allow you to review your insurance policy and compare it to others on the market. Who knows, you may save yourself a few dollars at a time when it is desperately needed.
5. Triple check your budget
When buying a house, brace yourself for the many hidden costs that may arise.
When factoring in how much you can spend on a home, be sure to include stamp duty (in most states), council rates and Lender’s Mortgage Insurance if you’ve saved a deposit under 20%
Some hidden costs may be one-offs, while others you may need to pay more than once, such as conveyancing, building inspections, loan application fees and more. These can be particularly painful if your journey to homeownership is long and full of false starts or unsuccessful offers.