If you are in the market for a new home, the process of buying will be long and involved. Making the correct decisions will be the difference between significant overspend on an underwhelming home, and a great deal on a home that you are happy with.
When it comes to financially savvy buying practices, there is a lot to know, and a number of things to prepare for. This will include comprehensively calculating what you can afford, optimising your spend, developing your negotiation skills, having a good understanding of all options, and remembering to factor in any hidden costs.
Budgeting and Getting the Most Out of Your Savings
The most important consideration to make when you are buying a new home is in regard to your budget. Having a strong idea of what you can afford will allow you to make buying decisions with confidence, and ensures that you get a good return on your investment.
Furthermore, taking advantage of online resources that do your work for you is a no-brainer that will allow you to determine how much you can spend on a property. Something like a mortgage repayment calculator is a convenient and risk free approach to finance management that you will probably find helps a lot. Westpac provides an example of industry leading financial calculators, with their mortgage calculator being particularly popular – use it here.
Understanding Your Options
Whilst this may sound like an obvious point to make, having a comprehensive understanding of all options available will mean that you have a good selection to choose from. Successfully shopping for a house means understanding the market, knowing what you want in a house, and having an idea of what your position and needs might look like in the future. Having a home that successfully caters to these needs will mean that you have been successful in your purchase.
The idea of understanding your options is not only from a property standpoint – whilst knowing what homes are available on the market is crucial, you should also make comparisons regarding home loan rates and other fees that you might have missed or overlooked.
Identifying and Factoring in Hidden Costs
Hidden costs may appear to be insignificant, however they can add up, having a notable impact on your budget. There is a long list of costs that are often overlooked by buyers – these include building and pest inspections, conveyancing, insurance and loan fees, stamp duty, and council rates.
Each of these costs, particularly when added up, can result in your budget and buying prospects requiring reevaluation and revision. Plus, knowing of them and being prepared before you are dealing with them on the spot will save you time and hassle, and will minimise disappointment.
Developing Your Negotiation Skills
Another aspect of buying a property that is often overlooked is developing your negotiation skills. This will ensure that you do not end up with a poor deal, or a home that you do not love.
In developing your negotiation skills, you need to have a good idea of the market supply and demand, as well as market prices, settlement terms and more. This means knowing if many others are likely to be interested in the property, as well as what it should be selling for in comparison to surrounding homes and properties with similar characteristics – this will be crucial in securing a fair price. In addition to this knowledge, be sure to have a good idea of when a seller might be overconfident or asking for too much.
A positive negotiation and overall purchase also means making sure that you do not rush the buying process. While you may get excited or encouraged by a seller to make a decision, stepping back and looking at the situation with a level head will help you to determine whether the decision is the right one.
Ultimately, making the appropriate preparations before purchasing a property will ensure that you get the most out of your money, and end up with a home that you will love.
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