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How To Buy Your First House - Part 2

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by VTN (subscribe)
Published May 19th 2012
Before you read this article, please take time to read How to buy your first house - Part 1 before continuing.

5. Type of house

The type of house will depend on why you are investing and your budget. It may be a unit, or a house on a large block of land, and it may be old or new.

Old houses generally are cheaper and require more maintenance. Newer houses are easier to rent out, can attract higher rents, and have more tax benefits (by doing a depreciation schedule).

Keep in mind that if the property is for investment and you are intending to rent it out, it doesn't have to be perfect and you don't have to absolutely love the house. Most renters are happy with a neat and tidy house, with a workable kitchen and bathroom. Perhaps you could consider buying and improving the house yourself with some new paint and floor coverings.

House
If investing, the house doesn't have to be perfect


6. Do a building and pest inspection

Even if you are buying a property to invest, you should carry out the same checks as if it was a home for yourself. Building and pest inspections will cost you money, but they can also potentially save you a lot of money in unexpected repairs later on. Do these inspections before you settle the property. You can also put in an offer on a house subject to building inspections, and walk away during the cooling off period if it turns out to be a disaster.

7. Put in an offer

Once you have found the house, to determine what kind of offer you should be putting in, you should either use a buyers agent or do research on comparative sales in the area yourself. Don't be afraid to pay for these services and information. Remember, you are potentially spending hundreds of thousands of dollars, so you want to know what you end up paying will be a good price.

The same principle applies to houses that goes to auction. Do the same research. Go to other auctions beforehand so you know what it is going to be like. If you do bid at auctions, set yourself a maximum price limit that you would not exceed, and don't get too attached or emotional.

When putting in offers for private sales, you should probably also do it subject to finance, in case your finances don't come through for some unforeseen reason.

8. Settlement and conveyancing

If your offer is accepted, you will be required to put down a deposit. Make sure you have the funds ready if you are really keen on the property.

The final step is settlement of the property. The settlement date is the day when the buyer, having paid the rest of the house price, receives the keys to the property. Settlement date is normally four to six weeks after you have signed the contract and paid the deposit (normally 5-10% of purchase price), however, don't be afraid of asking for a longer settlement date if you need.

Take out insurance on the property as soon as you have signed the contract and paid the deposit. Do not wait until settlement date to organise your insurance.

Finally, you will need a conveyancer to formalise all the required paperwork and transfer of titles. At the end of the day, they all do the same thing, so shop around on price, and ask for recommendations from friends.

Good luck and enjoy the great Australian dream.
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Why? To achieve the great Australian dream of owning your own home
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Your Comment
insightful articles....thank you :)
by Joy (score: 3|1853) 1775 days ago
Thanks Dave.

Can I ask (if you remember) roughly how much Essential Conveyancing charges for settlement of properties?

That way, I can recommend them to others.
by VTN (score: 2|216) 1827 days ago
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