Ultimate Guide For First Time Buyers

Buying your first home is an exciting but daunting process. There are so many foreign things to know and understand. This is why we have put together a step by step guide to make your process as seamless as possible.

Purchasing your first home is like an onion, there are so many layers upon layers of information to wrap your head around. This is why you should have no fear, as property experts, we are here to help!

When it comes to purchasing any home, it’s all about planning, researching, and understanding everything from the current market, trends, incentives, offers, and expenses that are incurred. If only it was as easy as saving for a deposit and buying whatever you like. Here we debunk any mysteries behind purchasing your first home and give you a soundproof guide from beginning to end.

Firstly, Set Up A Budget And Determine What You Can Afford 

Start by setting up a budget and determining your outgoing expenses. This includes your experiences, living costs (dining, socialising), bills, rent, and utilities. Once you have determined these expenses, you can see how much disposable income remains. From there try to save for a deposit. A great way to do this is to save what your repayments would be as a minimum, anything extra is a bonus. 

As part of your budget, it’s also smart to factor in any external costs that come with owning a home, such as; property maintenance (gardening), body corporate fees, stamp duty, conveyancing fees, and rates. 

As a first homeowner, these costs are not something you may have even heard of and can end up costing you thousands, unfortunately, when purchasing a home you don’t just pay stamp duty and deposit, there are many other factors for consideration, which is why you need some contingency money. 

After determining what you can afford, start saving for your deposit. This will all be dependent on your financial situation. Whilst it would be great to put down a huge deposit, sometimes it’s not realistic, especially if you just want to crack into the property market. However the bigger the deposit the better. This is because if you have a 20% deposit, you can avoid paying any lender’s mortgage insurance (LMI). An LMI is insurance that protects the lender from any defaults in repayments from the lender. This essentially is added to your mortgage repayments but does not lower your mortgage loan, it increases it. So if you can wait and save up a little longer to get that bigger deposit, you’ll be saving yourself a lot of money. 

Malvern Residences- Completed Q1 2016

Spend Time Familiarising Yourself With All The Grants And Incentives Available

There are many government grants and incentives available, especially due to the pandemic. So it’s very wise to spend some time wrapping your head around all the different types. Here we have briefly summarised what’s available to help you with the start of your journey. 

In Victoria the grants available are;

• First Home Owner Grant (FHOG) 
• Principal Place of Residence concession
• First Home Owner Stamp Duty Exemption
• Off The Plan Duty Concessions (refer to off-the-plan section below)

Let’s divulge a little deeper into these grants and understand the benefits for first home buyers. 

FHOG (First Home Owner Grant)

Is a $10,000 benefit to new homeowners purchasing a property valued under $750,000. To be eligible for this benefit; any purchaser entering the agreement must be a first-time buyer, the property must be new, not an established building. Meaning it must be the first sale of a newly built residential property. Also, you must reside in this property for a minimum of 12 continuous months from the settlement date. 

First Home Owner Stamp Duty Exemption (Vic)

Yes, you read that correctly, if you’re a first home buyer you are eligible for a full exemption from stamp duty! The dutiable value of your property must be valued at less than $600,000, and it must be the first time you or your partner is purchasing a property.

Principal Place of Residence (PPR)

You may be eligible for a duty concession if you intend to live, for 12 continuous months from purchasing the property.

Next, Spend Time Researching And Understanding Suburbs 

This is one of the most important factors. It is during this research period that you will determine where you want to live vs where you can afford to live. It is at this stage that you should really try to immerse yourself in the suburb, to make sure you’re making the right decision. Visit the local parks, cafes, restaurants and bars to see if they suit your lifestyle.

Research (part A)

Start by researching what suburbs appeal to you. When researching different suburbs, there are many different factors to consider:

1. Research the current average suburb price. This is a good indicator of what you can expect to pay. However, don’t be completely reliant on this information. It is also important to research recent sales, this will provide you with an indicator of recent activity in the suburb. 
2. When you decide on the ideal suburb, determine what you can afford. 
3. Research which types of property are within your budget. 
4. Decide what amenities are important to you and if the suburb can provide these. 
5. Decide what you need access to. Do you need access to public transport? If so, is it within reach? Do you need access to major highways or freeways?
6. Determine what’s important to you in your home. Do you want a sustainable home? Do you entertain? or love spending time outdoor and want a terrace or balcony? Is it important to you that an architect has designed your new home?

Packer Park- Carnegie

Research (Part B)

After you have determined what suburb you can afford that suits your needs, you need to understand what type of property you want to purchase. In order to achieve this you’ll need: 

1. To research mortgage brokers or a financial advisor. A good mortgage broker will help you get the best possible loan for your circumstances, as well as help you with your maximum borrowing capacity, and liaising with banks for the most appropriate and suitable loans. 
2. Understand the type of loan you are applying for. This includes; repayments, interest, lenders’ mortgage insurance, rates, lender fees, contract terms, and conditions. 
3. Choose a conveyancer to help you with the transfer of the legal title of the land. Conveyancers also help to ensure that all documents comply with Australian legal standards and they’ll help you debunk any legal jargon.

Understanding Off-The-Plan Purchasing And The Benefits Available

Purchasing off the plan has many advantages, mainly financial benefits and incentives. An off the plan purchase can be a risky investment as there is that fear that the project may not run on time or the developer may go bust. However, if you do your due diligence and research properly and correctly, you can purchase a real gem and save a lot of money!

A) When purchasing off the plan start by:

1. Researching the developer- Understand their track record and view any completed projects. Also, understand how many projects they currently have under construction. 
2. Ask to see their recent projects. 
3. View the display suite to get a deeper understanding of the future project. 
4. Ask for any future project updates.
5. Ask for an estimated timeline. 
6. Ensure there is an exit closure in the contact, to cover any deposits you have paid.

B) Understand the off-the-plan duty concessions:

This type of saving can be a little confusing and has many different levels. However, the general gist of a duty concession means you only pay duty on the amount of construction. So the earlier you purchase, the more money you save. As the property continues to establish, you pay more and more duty, therefore more stamp duty. The best way to establish the amount you will pay is to speak to your sales representative and developer.

Getting Ready to Purchase

1. Create a short-list of suburbs and suitable properties, check weekly sales results, and use the research suburbs tool as a guide on the median property prices in your selected suburbs 
2. Begin to attend inspections and display suite viewings
3. Be sure to check neighbourhood’s crime rates and get the building and pest inspection reports
4. Collect any documentation for your home loan and pre-approval application. You will usually require documentation such as; proof of identity, payslips, tax return statements, and savings account statements.

Sales and Purchasing Agreements

1. Once you have received your contract check the details of the document and have your conveyance look over it. Be sure to check all names and addresses, any amenities, fixtures, and fittings that are included in the home, as well as the amount of deposit required. 
2. Cooling off period – This is a contract exit clause, meaning you can exit the agreement within a certain timeframe if you provide written notice. The terms and conditions vary across each state.
3. Ask for a final inspection. Make sure to check off everything that was provided by the estate agent and be sure you’re happy with the state of the property before being handed the keys. 
4. Negotiate a settlement date that works for you and the owner. This is also important because you can organise any deliveries that need to be made and set up utilities for your move-in day.
5. Ensure you receive the title and deed documents when the sale is completed.

Surrey Hills- Completed Q4 2020

Now That You’re Ready You Can Move Into Your New Home

Now this is an exciting time! After all the research, planning and decision making has come to an end and you have purchased your first home, it’s time to celebrate and move in. To ensure your move in day is a smooth process, make sure you tick the below list: 

1. Arrange your utilities (electricity, water, gas, NBN, and phone)
2. Organise any maintenance work needed (Painting, cleaning, and installations)
3. Arrange for your furniture to be delivered
4. Set up and style your new home!!!!

Checklist:

1. Determine your expenses 
2. Determine your deposit and how much you can afford
3. Understand any eligible benefits, exemptions and grants 
4. Get a pre-approval and find a home loan that suits you
5. Pick a suburb
6. Find a mortgage broker
7. Choose a conveyancer
8. Put down a deposit 
9. Move into your new home

Now that you have a deeper understanding of all the layers involved in purchasing your first home, you are ready to start the journey.  Why not start your journey with the property experts at Cornus Developments.

If you require any further assistance or details regarding off-the-plan purchasing, eligibility criteria, or our current projects, call our sales team on 1800-267-687 or fill in our inquiry form.

We currently have two projects under construction; Cornus Woodlands and Cornus La Frank and are pleased to announce our Carnegie project which has just launched.

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