First Home Buyer Thread

[Gav23]

Hi, just thought I'd start a thread for aspects related to first home buyers (to live in). Things like FHB grants, and hopefully some of the property investors here can offer some hints/tips for someone who has never bought property before.

I hope to purchase my first property (to live in) in 2009, and have done copious amounts of reading/research recently (with the help of my financial planner). Things to consider:

- Applying for FHB grants and any other grants you may be entitled to
- Location: Obviously depends on your budget (buy in an area where there is expected to be growth)
- Consider your wants/needs: Do you need a double garage? Size of backyard for pets? Number of bedrooms? Airconditioning? Etc...
- Will you need to spend money straight away? eg. any necessary renovations
- Compare the prices of homes you like. Also look at median house price of area
- Borrow only what you can afford. Make sure you can still meet repayments if interest rates increase significantly.
- Pay the loan off as fast as possible, as the interest is not tax deductible

Questions I have:
- How do you barter with a Real Estate agent?
I have spoken to one over the phone about a property I am looking at tomorrow. He is extremely pushy, annoying, and difficult to talk to. He tells me its rare to find a property at this price in this particular area. Which is not true, I have 6 other similar properties on my watchlist around that price - 3 are on the same street as the one I'm looking at tomorrow!
- If you purchase a property you wish to move into, but there are people renting, what do you do? Is there a certain amount of time that you must move in, otherwise you will forfeit your First Home Buyers grant?

Today I bought a copy of "Your Mortgage". Has a few good articles.

Look forward to hearing your responses :)

[kincella]

Gav, ask the agent, tell him you have other props you are intersted in...he can say what he likes....call his bluff...re the tenants unless they still on a lease...ask when it expires, otherwise if the lease expired they are on a month to month...you would organise so that the contract is 60 days..so time for tenant to vacate....may be other buyers who would prefer a tenant in place...its all about negotiating everything....and you can offer less than what the buyers are asking....they have a right to accept or not...I had one once...buyer offered 20,000 below the asking price...everyday they mad a different offer...I told the agent thats my price, they can accept of go higher...different market then
I told an agent I was not a first home buyer and he dropped the price instantly....but then again I was not a first home buyer....you could always try it ?? test them
cheers

[2BAD4U]

Borrow only what you can afford. Make sure you can still meet repayments if interest rates increase significantly

Hi Gav and welcome.

This is an absolute must!!!! As sure as night follows day, interest rates will rise again.

Always go in low, particularly now as it is a buyers market and don't let your emotions get in the way, stick to your plan. If it dosen't happen, then look for another.

Also, if you don't mind doing a bit of handy work yourself, look for something that needs painting, gardening, etc., simple stuff that doesn't cost too much and you can add equity straight away and save some on the purchase.

If you're not sure about the area/street, knock on the neighbors doors and ask them.

Good luck and keep posting. :thumbs:

[Gav23]

kincella,

The first thing he asked me was if I was a first home buyer. If its mentioned again, I could just say my partner owns a property so now I'm not entitled to it. Obviously there will be other properties I'll be inspecting, I'll try not to reveal that from now on.

I read in "Your Mortgage" that to qualify for the FHB grant you have one year to move into the property. Depending on how much the rent is, it might be worth letting the tennant live there for a while, as I'm currently sharing rent so I'm not paying much. I read a few other great articles in "Your Mortgage", definitely a must read for First Home Buyers!

2BAD4U,

4 of the properties I am looking at are on the same street. I have visited the street 3 times so far at different times, just to see how busy it is and what type of people live there.

A profile search of the suburb on Domain.com.au also shows the median house/unit price, what jobs people in the area do, ages, religions, ethnicity, etc. That same website has a checklist of things to look for when inspecting the property, needless to say I'll be bringing it with me tomorrow :) It will be good to use as a reference in case I cant decide between a few properties.

[bluelabel]

I hope to purchase my first property (to live in) in 2009, and have done copious amounts of reading/research recently (with the help of my financial planner). Things to consider:

- Applying for FHB grants and any other grants you may be entitled to
- Location: Obviously depends on your budget (buy in an area where there is expected to be growth)
- Consider your wants/needs: Do you need a double garage? Size of backyard for pets? Number of bedrooms? Airconditioning? Etc...
- Will you need to spend money straight away? eg. any necessary renovations
- Compare the prices of homes you like. Also look at median house price of area
- Borrow only what you can afford. Make sure you can still meet repayments if interest rates increase significantly.
- Pay the loan off as fast as possible, as the interest is not tax deductible


Hi Gav, just another thing to consider here and that may be the Capital Gains implications on your first property. The old adage, bad house, good street could apply here. Find a dump(y) looking place and do it up and go for a large capital gain. Reading the Australian Master Tax Guide (it's one of the things I do in my spare time!!) s 118-110 of the income tax assessment act says that "a gain or loss ... is ignored for CGT purposes... for an individual where the dwelling was the taxpayers main residence throughout the ownership period." There are exceptions to this of course, relating to inheritances, trusts and larger properties over 2 acres (if memory serves me right) and a few others.

I hope that gives you something else to think about Gav.

!Disclaimer:
Please do not take the above as professional advice, I am not a professional. Please seek your own independent advice before consideration of any property purchase.

:bier:

blue

[kincella]

gAv...I am an older investor..but here is something for you to think about....if hyperinflation arrives..like most seem to thinki it will....some things to consider...now I did do a google for....hyperinflation and realestate.....there were hundreds of hits...with many of them just regurgitating the same stories as what happened in germany in 1920...but most economist and analyists..suggest holding gold, silver and real estate...use gold to buy food..

this is a copy of my post on another forum

hyperinflation when it hits will be your friend...after gold, silver,,,realestate is the next best thing to hold...
if petrol is %5 a litre,,what do they think bread or milk will be....forget about buying a house....if you have one the mortgage will shrink....dollar devalued.
if you have a job...and interest rates at zero...it will be easier to hold the house...
but trying to buy in...they will need 10 times more dollars to buy the same thing
houses will hold their value...while you wait for the hyperinflation to end
here is a clue...

http://blog.livinginaustin.com/2008/12/2009-housing-and-economic-prediction.html

*****hyperinflation...think Zimbabwe....
here is a clue about what happens to property during that period
http://www.propertywire.com/news/africa/hyperinflation-expected-to-continue-in-zimbabwe-2008011293.html
cheers
ps lots to think about

[Gav23]

Thanks bluelabel, I had no idea that CGT was ignored for the purpose of place of residency! Definitely something else to consider.

kincella, hyperinflation is just another reason to have your own property. Plus who wants to poor money down the toilet by renting? If it does come to be, and I dont have a property, I doubt I'd ever be able to afford one. And yes, I am the same "Gav" from the other forums.

[Gav23]

Kincella, just further to your point on the other forum:

St.Kilda isnt out of my price range. But a unit is not what my partner and I want. For the price of a nice unit in St.Kilda we can buy an extremely nice town house a little further away, but in an area we have both lived and like. The place we looked at yesterday was really nice. Having a look at another place tomorrow.

If I was purchasing an investment property I'd definitely be considering somewhere like St.Kilda. Those who love that sort of lifestyle close to the city and beach are willing to pay ridiculous amounts in rent! St.Kilda is definitely on the up