We all think about buying property, or investing in property, but what does that exactly mean you need to have, or know?
Never fear, the YPI team learnt the hard way and we’ve prepared you a cheat sheet! You can thank us later. We’ve created a three part series of Tips, Tricks and Contacts to have, when buying your a property, investment, or new product.
Sadly, despite what we may think, it isn’t as easy as walking up to a register and scanning the item and PayPassing it. There are a few more steps.
– A Deposit – Obviously. This is a given. In NSW, the standard deposit is a 10% deposit. You wouldn’t want to be caught out ‘buying’, only to realise you didn’t have the 10%. In some circumstances, you can Exchange on a property using a 5% deposit, however this must be stipulated in the contract, and agreed upon. If in doubt, ask the Estate Agent you are dealing with. Make sure you’ve calculated exactly how much deposit you have, and that you have enough of one to make the purchase. Also, don’t forget to factor your deposit along with the next point…
– Stamp Duty – The much maligned Stamp Duty, which sadly in most circumstances cannot be financed much like you would with a car purchase. Make sure you’ve accurately budgeted for both the 10% deposit and the Stamp Duty, but always make sure you’re in the clear, and not scraping the barrel, you wouldn’t want to be caught up by only a few hundred dollars. The amount can vary depending on the purchase price of the property, and which State or Territory the property is. There are often various governing regulations behind Stamp Duty. Make sure you always consult your solicitor, or Broker for advice and the process. Do not ask your Real Estate Agent. They have no part in the Stamp Duty process, as it is regulated by agencies like the Office of State Revenue (NSW), and frankly agents often have no idea.
– Time – You’ll need a lot of time. Say goodbye to your Saturdays, and pack your day with open homes, or private inspections. You don’t want to just look at one property, you’ll want to have looked at several different properties over the space of months, giving you a deep understanding of the market, agents and conditions of an area of interest. You’ll also need time to sit down with Real Estate Agents, Solicitors, Brokers and other relevant people from time to time to make sure you’ve successfully pinpointed a property of interest.
– Patience – Don’t get hot headed! Make friends not enemies with agents. At the end of the day, the agent does want to find a buyer; work with them not against them. You’ll have a few setbacks in finding a property, especially in a hot market, or the period following a large market spike. Keep a cool head, be patient, and the right one will come to you.
– Guts – When you eventually find the right property, you will need to take the leap of faith in securing it. Make sure you’ve got all your ducks in a row, before taking the jump, but it will take guts when you sign off on your first offer, which could easily fall over anyway. Be ready at any time however, you won’t want to miss out if it’s the right one for you.
Coming up this week, in part two, the contacts you simply must have, when preparing to buy a new property.