Feature
Ten tips for first home buyers
by Bruce Ansley
1. UNDERSTAND that you will probably not be in this house forever. It will influence every decision you make – when you buy, how much you spend, how much you do to the house. Sure, you love it. But give it the same chance of lasting as, say, the average marriage.
2. LISTEN to advice. But don’t take it, necessarily. Make up your own mind. Lots of people give advice – lenders, real-estate agents, brokers. They all have fingers in the pie, or even snouts in the trough. Everyone else, from mum and dad to your mates, knows what’s good for you. But only you do, really.
3. WAIT. What goes up must come down. A lot of people never believe it, but it will happen. Markets move in cycles. The weird thing is, everyone wants to climb in at the top and bail out at the bottom, instead of vice versa. Boom or bubble, whatever they call it, means the same thing: we’re at or near the top of the cycle and the only argument is over when it will start going down again. Your home’s value could fall, taking part or all of your deposit with it.
4. DON’T RENT – live with your parents. Or someone. It takes the average first-time buyer nearly two and a half years to save a 20 percent deposit and when you work that out weekly, you can’t be having much fun anyway. $200 a week saved is $10,000 more a year. Try not to listen to all those people telling you how to buy on no deposit. It’s fine – in a rising market.
5. DON’T PANIC. Market peaks create feeding frenzies. When you miss out on one house, you’re inclined to rush on to the next, determined not to miss out again, so you pay more. Whereas all that has happened is, you missed out on a house. And there is always another house.
6. LEARN the difference between a good house and a bad one. Preferably before you buy your first one, rather than as a result of it. Figure out why some people do all right out of homes and others are klutzes. It’s a combination of analysis, intelligence and heart. It’s not just life that imitates art.
7. YOU’RE YOUNG, or younger. You’ve got energy. Buy something you can afford and do it up. It’s not as hard as you think – after all, your parents did it, and you know how stupid they are. Unless you’re confident, go for something needing only a facelift. Learn the difference between what is going to cost money (foundations) and what is not (paint). Otherwise you’ll be old, or older.
8. DON’T PAY too much. Right now that’s dead easy. All those jokes about mortgages are true, like the mother-in-law ones. If you reckon you can just afford it – you probably can’t. Build the optimism factor into your budget. Don’t rely on the bank lending form that you fill out showing income and expenditure, which always leaves you with a bit over at the end of the month. They want to lend you money. And you usually lie a little.
9. LOCATION, location etc. Locution, circumlocution. It’s always the same, but it’s true in the end. Understand why a bad house in a good street is better than a good house in a bad one.
10. THINK with your heart. Or your head. Use one of those organs at least. Despite most professionals declaring the heart option to be a way to disaster, your own joy doesn’t show on the balance sheet. Either way, though, if in doubt, don’t.
