Common questions about buying your first home

Buying your first home is an exciting but often stressful experience for many, as you search for the perfect property and play along with the real estate game and its many challenges.


With many ways to buy, a wide range of property types to consider and the complicated world of home loans to navigate, there are many steps in the process for a first home buyer to get to grips with. Understanding your place in the market, what you’re looking for, what you have to spend and where the potential traps may be is crucial, to make sure you come out on top and secure the property you want under favourable terms.


Here we cover some of the most common questions we hear from first home buyers when it comes to finding the perfect property. Read on to learn:

  • Should I engage a buyer's advocate?

  • How should I deal with real estate agents?

  • Should I get a building and pest inspection?

  • What does a conveyancer do?

 

Should I engage a buyer’s advocate?

A buyer’s advocate or buyer’s agent does exactly what the name implies - they work on behalf of buyers in the property market to find and secure the perfect property under the best possible circumstances.


While their services can differ, the most common scenarios for engaging a buyer’s advocate would be a ‘full service’ agent or simply for negotiation or bidding support. In a full service scenario, your advocate takes the house hunting process on for you. They will search property listings, shortlist houses based on your criteria, and even attend inspections so they can recommend properties that suit your needs. Once you’ve settled on a property, they will then handle any bidding, offers or negotiation on your behalf to help you secure it.


This can be a useful service for many busy professionals who may not have the time to search hundreds of listings, speaking with real estate agents or spend their weekends running between inspections. Armed with a careful list of criteria, your advocate can do a lot of the work for you and present you with a tailored selection of properties that already tick a lot of boxes.


Alternatively, many people choose to engage a buyer’s advocate later in the process to negotiate with the agent or bid for them at auction. If you’d prefer to do your own searching and inspecting but want to put your best foot forward when it comes time to negotiate or bid, your buyer’s advocate will use their experience to assess the environment and negotiate or bid on your behalf, within the price limit you set for them. For a first home buyer, this can be a welcome relief for those who don’t have auction experience or want some support in playing the bidding game effectively.


Pricing varies for buyer’s advocates, but will often take the form of a flat rate or fee, and/or a commission based on a percentage of the purchase price, depending on the level of service.


Buyer’s advocates are experienced, have strong market knowledge and sometimes have access to a wider range of listed properties than you could find on your own - such as contacts who will inform them of private sales that haven’t been advertised.


How should I deal with real estate agents?

There is a perception among many buyers that real estate agents are ‘out to trick you’ should be treated with a degree of caution. While this isn’t quite the case, at a basic level, agents do work for the vendor - so as a buyer, it is sensible to remember what their priorities will be.


The more research you’ve done and the better prepared you are, the more control you’ll have in any negotiation. It often pays to know a lot but say little - keeping your cards close to your chest means you don’t give agents any more than they need. That said, don’t be afraid to let them know where you stand - playing ‘hard to get’ can result in you missing out on follow up information, and suggesting your offer is ‘best and final’ when you have room to negotiate can see your dream property sold to a higher bidder.


For medical and dental professionals, it can be useful not to tell real estate agents your profession. Rightly or wrongly, the impression that those in the medical field are inherently wealthy can lead to agents viewing you as a potential ‘big fish’ who can be pushed for a higher price.


At the end of the day, dealing with real estate agents is mandatory if you are looking to buy a house - so be prepared to work with them. Be assertive, be polite, be truthful, but remember who they work for and don’t give them more than you need to.


Should I get a building and pest inspection?

Put simply, the answer to this is ‘yes.’ Wherever you can, a building and pest inspection provides additional peace of mind that the structure is in good condition and highlights any potential risks or further expenses that might be hidden to the untrained eye.


A property that looks perfect and falls right in your price range can quickly be tainted by the knowledge it needs a brand new roof, hot water system and complete rewiring.


An inspection will look for signs of termites and other insects, rodents or other animal damage, as well as assessing the condition of stumps, gutters, walls, flooring, plumbing and electrical components and more. Usually this is done for a flat rate fee, and often you will need to schedule a private inspection with the real estate agent (outside open house times) so that your inspector can bring a ladder and enter roof spaces, look under a house’s crawl space and so on, without disrupting other prospective buyers. Keep in mind that this will indicate your interest to the agent, and in the event of a private sale you could also submit an offer subject to a favourable building and pest inspection.


What does a conveyancer do?

If you’re buying a property, you’ll likely need to engage a solicitor or conveyancer. In short, conveyancing encompasses the key legal and administrative steps involved in transferring ownership of a property from one party to another. While it’s not legally required for you to hire a conveyancer, unless you want to spend many hours deciphering complex forms and processes and running the risk that something is not completed correctly - their fee is a small price to pay for peace of mind.


Conveyancers will complete tasks like preparing necessary legal paperwork that meets state regulations, reviewing the Contract of Sale to ensure legal requirements are met and to provide you with advice as a buyer, and importantly, overseeing settlement by liaising between your lender and the seller’s agent and/or lawyers, to ensure the funds are transferred on time and the sale goes smoothly.


While conveyancing is a complicated process, the professionals know it like the back of their hands and can take control to reduce your stress and let you focus on preparing to move into your new home.

 

Finding expert advisors who can guide you through the property buying process is one of the best ways to ensure you’re setting yourself up for future financial success. To find out more about buying your first home and discuss your unique situation, contact the team at BFD Finance today.