Are you looking to buy your first home? If so, you’re in for a roller coaster of an adventure! There’s a lot to learn when it comes to buying your first property, and it can be tough to know where to start.
In this blog post, our HKY Real Estate experts break everything down for you and help make the process a little easier. We will discuss the different costs involved in buying a home in Perth, what to look for when house hunting, and any first home buyer grants that might be available to you.
So whether you are just starting out on your property journey or you are almost ready to sign on the dotted line, read on for all the info you need.
What to look for in your first house
When you’re buying your first home, it’s important to think about your lifestyle and keep in mind both your short-term and long-term needs. Here are some examples:
- If you have young children, you might want to look for a home with a backyard. You might also want to see what schools are in the area.
- If you are looking to downsize, you might want to find a property that doesn’t require much maintenance.
- If you are planning on starting a family soon you may want to make sure there’s enough space for everyone.
- If you think you might want to sell the property down the line, it is worth considering things like its location and whether it will appeal to future buyers.
- If you need to commute to work, you will want to make sure the property is close to public transport or major highways.
Of course, everyone’s situation is different, so it is important to sit down and really think about what you need from a first home before you start house hunting.
Home buying process
Once you have thought about what you want/need in your first home, it is time to start thinking about the home buying process. This can be a daunting task for first home buyers, but there are a few key things you need to do:
Get a pre-approval
This is when your bank or lender assesses your financial situation and gives you an idea of how much they are willing to lend you. It is important to get a pre-approval before starting your house hunt so you know exactly how much money you have to work with.
You can either go to your bank directly or speak to a mortgage broker who will find a range of home loan options best suited to you.
Do your due diligence
Once you have found a property you like, it is important to do your research on the local area, schools and any other factors that might affect its value. You should also get a Perth building and pest inspection to make sure there are no hidden nasties.
Get your finances in order
This includes having your deposit ready, as well as any other costs involved in buying a property (stamp duty, conveyancing fees, etc). It is also a good idea to compare home loan rates so you can get the best deal possible. You may be eligible for a first home owner grant which we explore further below.
Costs involved in buying a property
There are a few different costs associated with buying a property that you will need to factor into your budget. Some of these costs include:
Deposit
The first is the deposit, which is typically around 20% of the purchase price.
Lenders Mortgage Insurance
If you are unable to come up with a 20% deposit, you may still be able to buy a property but you will likely have to pay for Lenders Mortgage Insurance (LMI). This is insurance that protects the lender in case you default on your loan and allows you to pay, for example, only a 5% deposit.
Stamp duty
You will also need to pay stamp duty, which is a tax on property transactions. The amount of stamp duty you will need to pay depends on the purchase price and your circumstances (e.g. whether you are a first home buyer or investor).
Use our stamp duty calculator to estimate your stamp duty in your state or territory.
Legal fees
You will need to budget for legal fees, which will be charged by your conveyancer or solicitor for their services in relation to the purchase.
These fees will vary depending on the complexity of the transaction and the location of the property, but you can typically expect to pay between $800 and $2000.
Other costs
There are a few other one-off costs you will need to budget for, such as:
Conveyancing fees
- Building and pest inspections
- Registration of your mortgage
- Title search fees
- Costs associated with moving, such as removalists and new home insurance
You should also factor in the ongoing costs of owning a home, such as:
- Connecting gas and electricity
- Council rates
- Water bills
- Home and contents insurance
- Repairs and maintenance
First home buyer grants
In addition to your own savings, you may be able to take advantage of government grants available to first home buyers. The most common grant is the First Home Owners Grant (FHOG), which gives eligible first home buyers a lump sum of money towards their purchase. To find out if you’re eligible for the FHOG or any other grants, head over to the WA – First Home Owner Grant website.
Benefits of buying a home
There are many benefits to owning your own home, including:
Building equity
When you make mortgage repayments, you gradually build up equity in your home. Equity is the portion of your property that you own outright.
Forced savings
Every time you make a mortgage repayment, you’re also making a saving.
Stability and security
Unlike renting, when you own your home you won’t have to worry about landlords selling up or putting the rent up.
Rent price hikes
In some cases, increasing rent prices mean renters are paying almost just as much as they would with minimum repayments made to a loan.
Disadvantages of buying a home
Of course, there are also some disadvantages to buying a home that should be considered:
The upfront costs
When you buy a home, there are a number of upfront costs that you need to pay, such as stamp duty and legal fees.
The ongoing costs
There are also a number of ongoing costs associated with owning a home, such as council rates and insurance.
It’s not always easy to sell
If you need to sell your home for any reason, it’s not always easy to find a buyer quickly.
Final thoughts
Buying your first home is an exciting time but it is important to do your research and understand all the costs involved before you take the plunge. By doing your research, being prepared, and working with an experienced real estate agent, you can make the process as stress-free as possible.
Whether you are looking to buy or sell, get in touch with one of our local real estate agents who will be able to assist.
Buying your first home FAQs
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