Important first homebuyer lessons to teach your children

If 2018 is the year for your kids to hop onto the property ladder, first take a look at these ten valuable lessons you can teach your children to get them off on the right foot.

1. Be realistic as to what you can afford

Many young people have grand ambitions when it comes to their first house, far above what they can (and should) borrow to purchase.

Help your child by teaching them how to budget effectively, so they know exactly what they can afford.

Their budget should include all monthly expenses, including insurances, entertainment and of course, things like maintenance costs and rates that come with the responsibility of homeownership.

Once they have a realistic handle on their expenses, this can be subtracted from their income, leaving them with the amount they can afford to outlay on a monthly mortgage repayment.

The trick is then to only shop within your budget and avoid the temptation of looking at properties that are simply unattainable at this stage.

2. Make sure you capture all the expenses

Following on from the above point; when it comes to creating a realistic budget, you have to consider the additional costs that come with owning a home of your own.

First there are the purchasing costs, such as legal and mortgage fees, as well as furniture and whitegoods. Not to mention rates, insurances, repairs and maintenance that you don’t have to worry about when you live with mum and dad or rent from your landlord.

And if your first home is in an apartment complex, there will be annual strata fees payable.

It all adds up so make sure your child is aware of these hidden extras.

3. Get pre-approved

Before they start pounding the pavements, it’s important that first homebuyers find out exactly what type of mortgage the bank is likely to approve.

Knowing how much you have to spend means avoiding disappointment and importantly, being prepared when the right property presents itself.

This is particularly critical if your child wants to purchase in an area where auctions are the preferred method of treaty, such as in most inner suburbs of our major capital cities.

It also makes putting in an offer a smoother process, once you find the ideal property.

4. Don’t overcommit

While our first home might not be the palatial residence we dream of one day owning, it is the first step up the property ladder that can have a significant life long impact on the rest of your child’s journey.

It’s great to have a wish list, but it is important that your children understand compromises will have to be made if they are to remain in the realms of financial reality and not overcommit from the very beginning.

Remember, most of us will upgrade every seven to ten years, so remind them that this is not necessarily going to be their forever home.

5. Look past the little flaws

If your child were to purchase something that needs a little cosmetic work, they can add value and increase their equity, putting them in good stead to continue climbing onwards and upwards and potentially invest in further properties for their future retirement fund.

This requires a bit of vision and a willingness to do some manual labour, but is a worthwhile strategy for first homebuyers to adopt.

Aside from the economic gains to be made in acquiring a fixer upper, there’s also less chance they will pay a premium for the high spec finish achieved by the previous vendors.

You’re far better off paying less at point of purchase and having to put in some elbow grease, than paying for someone else’s hard work.

6. Agree on your compromises

Some things are non-negotiable when it comes to shopping for a first home.

What those specifics are will depend on the stage of life your child is at and their immediate plans for the future.

If they have recently gotten married and are planning on starting a family, a one-bedroom apartment is obviously not ideal.

Make sure they have a clear distinction between their ‘must-haves’ and those features that are more cosmetic than practical.

7. Future-proof as much as possible

When it comes to buying their first home specifically, future planning should include not only their personal needs and desires, but also what the market they are buying into will look like in ten years time when they might be thinking of moving on and selling, or using the equity in their home to purchase another property.

Does that particular property in that particular location represent a good long-term investment, as well as a cozy first home?

This will no doubt require some legwork and research into things like local school zones, future zoning council changes or planning policies from local and state government that might change the aesthetics or value of the property.

8. Suss it out before signing

It’s important that your child inspects the property carefully and more than once to really assess its suitability.

This means visiting during the day, as well as at nights and on weekends when different factors might impact the noise levels and general environment.

They want to see the home in different lights and take in the aspect of different rooms to get a better idea as to how much it will cost to heat and cool, which can really impact the affordability and livability of a property.

Advise them to talk to neighbours if possible and if the home is tenanted, to the current residents to get their take on living in the premises.

9. Get it checked out

It’s advisable that first homebuyers (or any purchaser for that matter) obtain building and pest inspections from properly qualified professionals.

If the previous owners have made any improvements or extensions, you need to qualify that the correct permits were in place for the completed works.

10. Don’t be scared to negotiate or walk away

Teach your child the necessary skills to negotiate effectively and importantly, give them the confidence to know when to walk away from a deal that’s simply not going to tick all of their necessary boxes.

 

Are you thinking about buying your first home? We can help! With experienced agents, great properties available, and a wealth of knowledge to guide you through the process, make Naked Edge Real Estate your first call.
View our currently available listings here.

You’re finally ready to buy a new house!

Maybe it’s the first home you’re ever going to purchase yourself, or perhaps it’s a crucial upgrade that you’ve decided to invest in now that your family is getting bigger. Either way, choosing the ideal home is a big decision. In fact, is one of the most significant financial decisions you’re ever going to make.
With so much pressure riding on the right choice, it’s no wonder that so many buyers end up biting their nails over whether a purchase is right for them or not. Move too quickly, and you risk wasting all your budget on a home that’s just not right for you. Sit on the fence for too long, and you could lose your chance of getting the property of your dreams.
So, how do you know whether you’ve really found the right house? Look for the following signs.

 

 

 

 

 

 

1. It Suits your Budget Perfectly

Ultimately, we’re all limited by how much house we can reasonably afford to buy. You’ll need to sit down with a real estate agent or a mortgage broker before you start looking for homes, and sort through your finances to determine how much you can afford to offer as a down payment, and how much debt you’re comfortable being in and can realistically afford to pay back.
If you’re struggling to figure out what you can afford, there are plenty of great mortgage calculators out there who can help you to do the math. Perhaps the most important thing to remember is that you should never put yourself in a position where you’re going to struggle to make ends meet every month.
Your home is a place of comfort – it shouldn’t be something that fills you with dread every time you see the mortgage payment. If the price of your ideal home leaves you breathing a sigh of relief, then that’s a good sign you’re on the right path.

2. It Meets Your Must-Have List

With your budget in mind, you’ll probably find that you need to do some prioritising. After all, you might not be able to afford three bathrooms, four bedrooms, and a giant garden. With that in mind, you’re going to need to decide what your “must have” items are, and what your “nice to have” preferences might be.
The perfect home will be the one that checks off all the deal-breakers on your list while covering a few of the nice to have options too. While everyone’s list is different, a few of the things you might consider include:
– A location that’s close to work
– Enough bedrooms for the whole family
– A kitchen that’s large enough to entertain in
– An extra bathroom
– A theatre room

While you should always be willing to compromise when your house-hunting, remember that a property that doesn’t fit your basic needs might not be the right fit.

 

 

 

 

3. You No Longer Care about Seeing Other Homes

When you start house hunting, with a little luck you’ll find that there are plenty of homes out there that meet your budget. However, while there might be countless fish in the sea within your local area, once you find the perfect place for you, you’ll no longer be interested in seeing the other options. Ultimately, once you find the one, all the excitement of house hunting goes through the window, and all you can think about is getting your hands on that dream property.
Even if you do decide to look at the other homes in your area, then there’s a good chance that the “one” will be on your mind throughout the entire viewing. You might even find yourself comparing other houses to the property you love – telling yourself that the other garden was bigger, or that there was more “light” in the living room.

If the thrill of the hunt has gone, you might have already found your perfect home!

4. The Area or Neighbourhood is Perfect

While it’s great to fall in love with a house for its structure or the number of spacious bedrooms it has, it’s also important to remember that you’re not buying a home in a vacuum. In other words, when you invest in a house, you’re also investing in the neighbourhood. Before you even consider making an offer somewhere, you should look at the surrounding area and see if you’re happy with it.
Is there a school nearby that would be great for the kids? Can you access plenty of public transportation if you don’t want to rely on a car? What about the neighbours? Can you consider knocking on a few doors and finding out whether you’re going to get along with the people you live beside? Ask about the nitty gritty like the crime rate in the area and if there is a lot of noise in the evenings when you would rather be relaxing in peace.
It’s a good idea to explore an area thoroughly before you submit an offer. Make sure you’re on the lookout for essential amenities like a grocery store, or bank. It’s also worth looking for fun hotspots like restaurants and parks too.

5. Is It Right for Today and Tomorrow?

An important point to keep in mind when you’re buying a house is that you’re not just purchasing the property to live in for the next year or so. Most people spend at least a few years in their home, so it’s worth making sure that your house is going to meet all your expectations for today and tomorrow.
Real estate is a solid investment, and you’ll want to make sure that any home you’re thinking of purchasing is a good fit for the life you envision having. Is there are a spare room for any kids you’re thinking of having? If you’re planning to launch your own business or spend more time working from home, is there somewhere you can turn into an office space?

Looking for the Perfect Property Vibes
Ultimately, finding the right house is a lot like falling in love. For many people, you simply know when you’ve found the right one. From the moment you see the property, you’ll be dying to get inside, and every new room will create an even deeper love affair. Even if the house isn’t perfect, the home that’s right for you won’t put you off because you don’t like the paint colour, or you know the kitchen needs a refresh. Just make sure that you don’t let your heart rule your head too much, or you could end up spending more money thanyou realistically have.

Ready to start looking? To see our currently available properties, please click here.