Due Diligence

Your savings are in the bank, you’re regularly scanning online for properties that are available in your price range and you have already planned the guest list for your house warming party! What else do you need to do when planning to purchase a property? A few things, quite a few things actually! But to keep things simple let’s look at four things… to start with.
1. Find the right mortgage
Securing a mortgage can be relatively easy if you have a good deposit and a regular income. Securing a mortgage with a lender that is right for you can be a little more difficult. So, what do you do? We suggest you do some research. Dig deeper than the interest levels and find out (we mean really find out) what the bank is offering you as part of the mortgage agreement. Compare the different offerings and make a decision on what best meets your specific needs. And, don’t forget to calculate the entire amount you will be repaying, not just the amount you are borrowing. This can be quite a big reality check, and cause you to think about exactly how much you need to borrow or are prepared to repay.
Short on time? Want assistance? Consider talking to your accountant, a financial planner or a mortgage broker.
2. Engage a settlement agent
Before you seriously start looking or put an offer in on a house we suggest you engage a settlement agent (conveyancer). A conveyancer will look after your interests and make sure everything is completed on time, ensuring your settlement goes as smoothly as possible. Not all settlement agents are the same so once again it’s really important to do your research. This time we recommended you ask around. Ask friends, family, neighbours, colleagues or anyone that has bought or sold a house who their settlement agent was. The most important two questions to ask are; would you recommend them and would you use them again? If the answer is no to either of these questions, keep looking. The perfect conveyancer does exist… Real Asset Conveyancing is one of them!
3. Get to know the area
Make it your mission to find out as much as you can about the suburb or suburbs you are interested in purchasing a property in. Buying a home will most likely be one of your biggest investments so it is really important you make a good decision. Find out what amenities are available, look at public transport (you never know you may have to use it), gauge how busy the area is at different times of the day and night. Is it safe? Consider the growth potential. Is it an up and coming suburb or have the prices of homes remained stable over the past 5, 10 years? Pick up a copy of the local newspaper and read what’s going on, speak to people in the neighbourhood. By practicing due diligence in this regard you will get a good feel for the suburb and a sense of whether this is the right place for you.
4. Calculate the costs
Owning your own home can be expensive. So can renting, but with owning there are costs that you will be required to pay when you are purchasing, are the owner and when and if you plan to sell. Once again it’s important to ask questions. Work with the conveyancer to calculate how much you will be paying when you initially purchase the property and some of the costs thereafter. Unless you are planning to live by candle light and draw water from a well, there will be the usual costs of water and electricity alongside land rates and other monthly or quarterly expenses. It’s also a good idea to think about whether you can maintain the cost of an older home or a newer home is more in keeping with your budget. By knowing what you are up for over the next thirty or so years you will be making a much more informed decision.
If you are seriously considering purchasing a property then… seriously consider spending some time making sure you are informed. By asking people you trust, doing some research online and practicing true diligence in all areas of purchasing a property you are more than likely going to make a wise choice about the home you buy, how much you purchase it for and where it is located.