Ten Key Rules Before You Put In That Offer
Thinking of putting in an offer on a house? Here is a few things to do before you take the big step to buying a house:
1. Sleep on it
You have just seen the perfect house, you have looked at so many, you have missed out before, the real estate agent is asking when they can come around with the paperwork! It is all a bit of a rush... if you feel you can - sleep on it. It is a big decision, and in the morning you could be surprised at how your feelings have either firmed or wavered.
Now double check your 'not negotiable' list and make sure everything is ticked off. Take your time to make your decision, if it is the right house for you it will still be available, and if it is not, there really will be another!
2. Location Location Location
The mantra of anyone involved in real estate - and for good reason - you can not change your location! Some houses sell purely on location alone - making location a top selling point for a house.
There are many components to 'location', the most obvious being suburb, but zoning for schools, proximity to transport, local amenities, nearby activities such as industry, and the busyness of the road all make up the 'location factor'. Make sure you are fully aware of all implications of the location - and be comfortable with them.
3. Do a second inspection
You never know what you might find when you go back to that fantastic house and spend a bit of time looking a little harder and digging a bit deeper - we know you are not a building inspector, but there are certain things that can make you open your eyes.
It is not easy to re-negotiate price once the contract is signed, so try and spot the clues to potential issues before you make the offer. Check out our quick observations for a second inspection.
4. Check the top 6 biggest maintenance issues
Unless you are a DIY wonder (or wannabe), have very deep pockets, or a very accommodating bank, you do not want deal with fixing all of the piles, wiring, roof, wall linings, exterior and plumbing - these are all big costs, full of unknowns that can quickly go beyond budget, and cannot be ignored mostly due to health and safety reasons.
On top of this, you may find the house is hard to insure, requires work or certification before it can be insured, or attracts a premium insurance rate. Check out our second inspection checklist for clues to the state of the top 6 biggest maintenance issues.
5. Work out the sun orientation
We love the sun here at Propertytoolbox, you can't beat that beam of sunlight into the house on a wintery afternoon or a summer morning. What is that? The house does not get a speck of sun 3 months of the year? The sunniest room is the wash-house?
If natural light, sun and house orientation are important to you, make sure you check it out. This is one of the hardest, if not the most impossible aspects to change.
Many a person has wished they could rotate their house or chop down a neighbours tree, but it is just not feasible most of the time. We have our here comes the sun guide to help you work this out.
6. Check out the neighbours
These are people that you will potentially be living in close confines with. A quick peek over the fence can give you a good insight into your neighbours. Do they have a dog? Are they into cars? Or sunbathing? Do they have a squadron of children? How is their section maintained? Is it a business or industrial? Better yet, pay them a visit, they could give you a really good insight into the street - maybe introducing some pros and cons that make or break the deal.
7. Check the title
A title check can potentially bring information to light that could really affect your potential enjoyment of the house. Get your lawyer on the job as a title check can be full of surprises - do not dismiss this!
8. Do some research
There are plenty of free (and low cost) resources out there that can give you some very valuable information about a house.
- Start at your local councils website. Here you can find the rates payable on the house and various aerial views of the property with details such as boundaries, drainage/sewerage plans, contour of the land, and flood zones overlaid - all for free.
- Go to Quotable Value (QV). On this website you can find out a variety of info about the property and the surrounding area for free. This includes the school zones the house is in and the demographic profile of the neighbourhood. If you feel like spending a small amount of money, you can buy a variety of reports of this site that can give you more info about the house and surrounds and local sales statistics.
- Ring your insurance company and get a quote (free!) for insurance, query them about their policy on insuring a house with outstanding maintenance if you think this may be an issue.
9. Run the details past your bank or lender
Give your bank the details of the house you are looking at buying including the address and the proposed purchase price. Once your lender has done their checks they should be in a position to give you a pre-approval for the purchase of the house up to a set amount.
You may find that they are not prepared to lend the amount of money you need for that house! Good thing you found that out now! Is your finance not sorted at all? Usually the quickest way to arrange finance is with your current bank. If you want more choice, get in touch with a mortgage broker they can do the running around for you.
10. Set your budget
Be confident in what you are prepared to pay and set your budget - sounds easy? It is one of the hardest things to do when buying a house. By the time you get to the offer stage you often feel committed to the purchase - this can lead to you paying too much.
This purchase is not just a new home, but is a financial commitment and the purchase price establishes the level of this financial commitment. Work it all out - for this house what is the weekly cost of the mortgage repayments, rates, insurance, maintenance etc - now you are fully informed. Make sure you are happy, take a deep breath, know your limits, set your budget for purchase and be prepared to walk away.