The Journey of a First Home Buyer
29 Jun 2016
Buying your first property is an exercise in making a dream, real, in stark financial terms. On some level we all have embedded images of dream homes; with white picket fences, shiny polished floors or loft style exposed bricks and high ceilings. Maybe they’re based on the home we grew up in, but could just as easily have sprung from images in advertising and film. The challenge is plucking these expectations out of the dream-sphere and wrestling them into a plausible, affordable reality you’ll be living in and paying off for the next 30 years or until you sell.
My wife and I first started looking for a house in September last year. Given it’s now May is a testament to that fact that it’s a challenging road, buying a house, even when you have the inside jump on the market like I do working at Data Insight. That said, I’m in a far better position now than I was six months ago. We know what we’re looking for, what is good market value, and how best to use our time in search for the perfect place to call home.
Here are some things I have learned on the journey so far.
1. The right mortgage broker can really help
The key things to understand when you first start is how much you can borrow and what you can afford to pay back. We were recommended a mortgage broker who made things easy. He came round to our house, talked through all the details and helped us fill in the forms. I thought all mortgage brokers were like that until I heard from a friend that they had found the process with their mortgage broker laborious and discouraging. The right mortgage broker will make a difference - ask your friends for a recommendation if you don’t already have one.
2. Start wide and narrow down
My wife and I found it helpful to focus on 'the where' before getting to 'the what'. The key things location dictates are; proximity to motorways, local amenities, schools, transport routes and local shopping/hospitality and reputation for safety and community. We drew up a list of what mattered to us; for me it was a sub-thirty drive to work, a good local café and restaurant scene and nice, quiet streets. After I’d added my wife’s location preferences it was relatively easy to choose three target suburbs which helped us narrow down the options significantly.
3. Wants versus needs
My wife is a designer with a flair for fashion. She’s been tempted by houses that titivate her visual aesthetics but are not so strong in other respects. An example of this was the house on the hill, which she was quite keen on. As it was on a hill, half the outdoor space was unusable. Being able to spend time outside is super important to me. We discussed and agreed it wasn’t worth giving up an indoor-outdoor lifestyle for an, admittedly, pleasing interior. That house offered us a chance to refine our priorities, which you do as you go along. Distinguishing between ‘must-haves’ and ‘nice-to-haves’ helps with this!
4. Know when to say when
Auctions are hard. I imagine I hear the hearts breaking as the value bounces up beyond the CV in 25k increments with more three people still in the race. Bidding wars are emotional and can inflate the value of the house. My wife and I were lucky because I was able to check the market value of a house before going to an auction. So it was always very clear when the bids had lifted off from real world market value. We knew exactly when to stop raising the paddle - hard as it was sometimes. Now I treat auctions with a grain of salt and always look up the market value of the property with an iVal beforehand.
5. Live-able is different from buy-able
If there’s something we’re not sure on about a house, a good measure of how liveable it is, is how long the previous owners lived there. We’re looking at a house at the moment that is quite close to a main arterial traffic route. We couldn’t hear the traffic when we looked through but wondered if it’d be louder at night or at drive-time, or have other impacts we couldn’t envisage. As a solution we looked back at the Sales History Report to see how long the previous owners had lived there. It turned out to be 5 years for the current owners and longer for the people before them. We took that as a good sign that the house was liveable which gave us confidence.
Buying your first home is as much about understanding your own vision and coming to a position of compromise with your own (and your wife’s) wants and needs, as it is a financial undertaking. These days I consider myself a home-hunting terminator, complete with red situation evaluation messages popping up in my sights when I visit a property. I’m pretty speedy to reach a conclusion on whether to make an offer, and my wife and I are very well aligned.
In fact, my blog may not last long as we could find the right house any minute - but I’ll keep you updated with our progress in the meantime...