3 ways to buy your first home
For buyers dipping a toe into the pool of real estate in Australia for the first time, choosing just one property from the vast array of homes on offer can be an exciting experience. From a dreamy bungalow in Cairns to a glamorous townhouse in Sydney or Melbourne, the options are seemingly endless.
There is also a wide array of sales methods vendors can sell by. Understanding the different processes can help give you peace of mind in these early stages of your home ownership journey.
With that in mind, here are three of the most common ways you can buy homes for sale Australia – and a few tips to help you navigate them.
1. Understanding private treaty
Despite what the auction-heavy headlines might suggest, the majority of property for sale in Australia is sold by private treaty. Basically, this means that a vendor decides on a price for their home and puts it on the market – if you want buy your first home in this way, you’ll need to agree, more or less, to the specific price set by the seller.
The trick to this method is finding the lowest value that the vendor and their agent are willing to sell at, which can take some delicate negotiations – and a cool head. It’s easy to become attached to the idea of a property, but try to approach the process as rationally as you can.
Do you think the home justifies the price? Collect as many bargaining chips as you can before negotiations begin. This might include a list of all the repairs that need to be done on the home, or a comparison of similar homes in the area.
Remember: If the vendor won’t budge, you don’t need to agree! Nothing is set in stone until the contracts are signed and exchanged, so take a step back and revaluate your position with your real estate agent – you might need to approach them again with a slightly higher offer.
2. Tackling the auction
If you’re interested in a home for sale that’s going under the hammer, you might be a bit uncertain about what to expect. Unlike a private treaty sale, auctions are a public event where the higher bidder is typically the successful buyer.
Auctions tend to conjure up images of dramatic bidding wars, which can leave first-time buyers feeling overwhelmed. But buying at auction doesn’t need to be the nerve-wracking experience you might think it to be! Preparation is key to a stress-free day. If you’ve never taken part in an auction before, it’s worth attending a few for a practice run. This can help you become more comfortable with how the process works, and clue you in on what to expect.
There’s something else to come armed with: Paperwork. Auctions are fast-paced – there is no cooling-off period, and you might need to sign the contract and pay the deposit then and there. To ensure a smooth ride, have your home loan organise and a clear idea of the terms and conditions contained in the contract. Your solicitor can help you with this.
3. Expression of interest
In the early stages of your home ownership adventure, you might come across a expression of interest sale. This is similar to purchasing via private treaty, but with a few pivotal differences. For one, the vendor only puts their home on the market for a limited period. If you’re interested, you’ll need to submit a formal written offer within this timeframe to make your intentions clear.
After the expression of interest periods ends, you can negotiate these points with the vendor. This process is all about putting your best foot forward. Your offer needs to cover the sale conditions, like settlement dates and your proposed price. The important thing to note is that you’ve only got one chance to agree on these points – the vendor doesn’t need to accept your offer. It’s worth having a thorough chat with your agent to put yourself in good stead.