While Perth’s property prices have grown almost out of reach of many first homebuyers in recent years, there are options out there if you take the time to do your research. Our top three tips for first homebuyers in Perth are:
BUDGET FOR THE FUTURE
Ensuring you know what you can realistically afford is the critical first step.
Even if you qualify for finance for a more expensive property, if that amount is not realistic you could end up in a very stressful situation. Going above what you can sensibly afford leaves you exposed to financial shocks, such as interest rate rises or a change in income.
When considering your budget, remember to account for the full costs of buying a property; along with the advertised purchase price, you also need to consider stamp duties, rates or inspection and settlement fees.
SAVE NOW TO SAVE LATER
Saving up the largest deposit possible will save you money in the long term. While it may fairly simple to get a loan with a 5 or 10 percent deposit, a 20 percent deposit will help you avoid the cost of mortgage insurance.
DO YOUR RESEARCH
With more than 50 suburbs surrounding Perth and a median price of $549,000* as of March 2015, finding the right property in the ideal location on a tight budget can be tricky.
It’s easy to get caught up in the hype surrounding particular areas, or be drawn in by a deluxe home in a stylish display village, but many of these purchases can disappoint in the long term if there is no real potential for long term growth.
Look at your dream property as critically as an investor would, and carry out comprehensive due diligence to help ensure you are paying the right price. If you’re not sure, one meeting with a professional could save you from making a mistake that takes years to recover from, such as buying in the wrong suburb.
Once you’ve found the right property, make sure the contract you’re signing will allow you time to properly ensure you’re getting the best deal.
Inexperienced property buyers tend to gloss over the purchase conditions, giving the seller the upper hand. Taking the time to add a few conditions of your own to the contract can assist you with anticipating costs that may arise down the track.
For example, a clause requiring the seller to endorse the Seller’s Disclosure Statement, a comprehensive list of warranties and disclosures that the seller makes, ensures you can take action if any of these disclosures are incorrect or misleading.
If you’re prepared to do your research, or engage an expert to search for you, it is always possible to find your ideal first home – no matter where the market is in the cycle.
If you have an interest in building your wealth through property, then call us on (08) 9381-7450, or request a FREE Starter Pack.
* REIWA.com Landgate Data Release as at 31st March 2015