What To Look For - Finance

It is true that buying a first home can be fraught, confusing and stressful but there are many things you can do to improve your odds of making a successful choice.

Drawing up a wish list of desired features before you start searching for property, then sticking to it, is one. A wish list serves as a compass for the new-home buyer and it can help you resist the enticements, sales pressure and even well-meaning family advice that you are bound to encounter. At the very least, it will ensure that you emerge from the process having achieved your basic requirements.

When creating your list, you might want to ask yourself the following questions and invent a few of your own:

Do you want a townhouse, apartment or a house?
Do you wish to live in the inner city, suburbs or country?
How many rooms will you need?
How many bedrooms do you want?
Will the property accommodate your changing needs over time?
Do you want a garden, if so how big?
Do you prefer an old or modern residence?
Are you happy to renovate or extend?
How close do you wish to be to facilities such as schools, shops, childcare, parks, beaches and hospitals?
How much you are willing to pay?

Once you have established your wish list and find a few properties that fit the bill, it is advisable to visit them several times at different times of day. This is not just to establish the condition and mood of the house under different lighting, but to determine a whole range of issues such as:

Do the neighbours from hell live next door and why?
Are there barking dogs or crowing roosters next door or over the road?
Do a family of teenagers live next door?

In this respect, it can be helpful to ask why the sellers are moving, but keep in mind you may not always get an honest answer.

Finances are usually fairly tight when buying a first home, so try and determine how much a property is likely to cost you down the track. Will it require a further investment in furniture, carpets or fittings? Will it require renovating? If so, does it fit your budget and timeframe for renovations? Most importantly, you need to ascertain if the building has any structural problems.

Once you have decided whether the house meets your specifications and there are no nasty surprises, the next step is to consider its on-sale value, particularly if this purchase is only a stepping stone to another property. Consider the following:

Has a property boom hit the area you in which you are buying? If so there may not be a lot of money to be made for seven years, maybe longer. Check zoning, easements, caveats and covenants on the property.
Try to buy the worst house in the best street.
Compare home prices in your area to make sure you are paying no more than market value.
Negotiate on the price. If it is a buyers' market, you will be in a position to drive a hard bargain.
Good kitchens and bathrooms usually add value to the house and will reduce your renovation burden.

Last but not least, when budgeting, don't forget to take into account costs such as stamp duty and conveyancing. Stamp duty varies from state to state and is scaled according to the cost of the property. Some states offer exemptions or discounts to first-home buyers, so check the government websites for guide.