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Embarking On A Journey



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c2105026

Hello all,

After some deliberation I have decided to take the plunge...into home ownership...

I am having an initial meeting with my bank this thursday to get pre-approval so I can start looking.

I have already identified 22 homes in my home town of Dubbo that I may/may not be interested in.

Am considering a 3br home in good condition, in the price range A$220-270k.

Feel free to discuss...

Who here has bought a new home recently??

Max

That's great news, c! Bought my first last year, and wish I'd done it sooner. Tax breaks are great, the home is already worth more than I paid, and best of all, it's mine. Keep us posted!

01loadedLE

Dont buy out of desperation being in a hurry to move because you'll settle for a place you'll later wish you hadnt. Wait on one you really like, and get an inspector to look it over before you buy because you dont want to have to spend thousands repairing the place after you move in, and get him to make sure everything is installed up to code or else you'll have to spend the money to bring it up to code once the part fails. Dont buy a house on sloping land because it will wash away downhill during hard rain over the years. Me personally I'd look for one on a street that doesnt have a lot of traffic. One thats not by a freeway so you dont have to hear loud idiots drive by all the time, and I'd stay away from the railroads and airports because of noise too. If the neighbors look like they'll be loud with kids screaming in the yard or dogs barking incessantly, or if it looks like they like to spend time outside working on their loud cars all the time or have a junky looking place then I'd pass too. I have found the middle age to elderly age range to be the most friendly respectful and considerate neighbors. Young neighbors are just idiots more times than not from my experience.

Larry Roll

I think it's a great idea to invest in your own home. It will nearly always gain in value, assuming it is in fine condition and you keep it that way. When looking for a home, keep the basics in mind. Make sure it has a good roof, good fit and finish throughout, especially on doors and windows. Any areas paved in concrete or ashphalt should be relatively free of cracks. This applies particularly to the foundation. If the house has a full basement, be sure it is dry, with no tell-tale signs of water incursion such as water stains or wet spots on the foundation walls or the concrete floor. If the house has a slab foundation, look for tell-tale signs of water seepage such as wet spots on carpet, or peeling or water-damaged flooring.

All mechanical systems should be fully functional -- plumbing, heating and air conditioning, and all electrical circuits. make a close inspection inside all cabinets, particularly those base cabinets in the kitchen and bathroom which may have a kitchen sink or bathroom vanity. Toilets should be securely attached to the floor, with no signs of water seepage and no smells of mustiness or sewage. Interior decoration, including paintwork and wallpaper if present, should be in good condition and of a color and/or design you can live with. Remember, removal of wallpaper is a labor intensive and therefore costly process, so keep that in mind as well.

Also consider the overall energy costs involved. Heating systems which burn natural gas as their primary fuel will be much more cost efficient over time than those which run on electricity alone as the primary heat source. Also, a natural gas water heater will usually be much less costly to run than one which heats with electricity. The attic space should be well ventilated and insulated. Exterior landscaping should be well designed and neatly trimmed. Be wary of large trees with branches overhanging the house. These are just a few of the high points, as suggested by 01loadedLE, a good home inspection is well worth the cost, and the inspector's report should be considered during price negotiations if there are any problem areas which need to be resolved prior to the sale.

Finally, insist on representation by an experienced real estate attorney during the closing process. He or she will ensure that there are no problems with the property's title, survey, and any number of a myriad of issues you can't think of but will be routine to them.

Also remember that a good rule of thumb is that your total monthly mortgage payment, including principal, interest, and property taxes should not exceed 25% of your annual income. Less would be better. Also, I don't know how insurance rules work in Australia, but here in the U.S., if you make a minimum 20% down payment, you don't need to carry Private Mortgage Insurance, which is a great savings. I have no doubt that the rules in Australia are similar, if not identical. Of course, the added benefit is an automatic 20% equity in the property, which means 20% of any future increase in property value automatically accrues to you as pure profit, and giving you greater leverage when selling the property in the future, as you may need to do should you start a family and need to move to a larger home.

I bought my home somewhat late in life, having been a renter during most of my career in the Air Force, due to frequent moves precluding my ability to buy a home. However, looking back, I would have bought a house a lot sooner, knowing what I know today, so you can rest assured, you're doing the right thing.

Good luck and keep us apprised of your journey into home ownership. Try to post links to photos of your new home once you have it!

c2105026

Thanks for the tips guys...

I got pre-approved for a loan today, with commonwealth bank. 30 yrs, at 9.44% variable rate, but i am getting a package that can reduce this by 0.7%. I have narrowed the list down to 3 that I shall have a second look at. I am looking next week, with my mum for a second opinion.

01loadedLE - Dubbo is quite flat, so slopes won't be a big issue....a condition I would have of an offer is that the property pass a pest and building inspection. I have also lived successfully on Parramatta Rd in sydney (30,000 vehicles/day!), I can cope with a little noise.

Larry - interior design has been a key discriminator - like there was this one place that could have been lovely, and a great price, but.....it was right out of the 90s, so it was peach, peach, peach and more peach. The big black macho leather lounge I am looking at getting would be so out of place. A lot of places have new kitchens and bathrooms but they are tasteless and non-masculine. Like, I saw this kitchen that was, well, brand spankers but it was light green. I am looking for new kitchen and bath in netural colours, or one that needs new cupboard doors and benchtops. As for paint and carpet, well, as long as it isn't too bright it should match my furniture (which I am aiming to co-ordinate as blacks and dark woods), and if it does not match paint is a minor expense should I do it myself, and to fully re-carpet a small house would only be $5-7k. Exterior design has been a discriminator too - like, a lot of places here in sth dubbo, which is a good location, date from the 1950s-1970s, so are quite daggy. The thing to do here is to bag it and paint the cement a modern colour, which costs $5k-10k, on top of the new kitchen/bathroom you would also have to possibly rectify to make it comfortable. But buying in east dubbo, where the houses are more modern (most date from 1988-1991), I don't have that problem. A bit of paint, and one is good to go...

The mortgage I got approved for would chew up 40% of my gross pay. Unfortunate, yes, but housing affordability in oz at the moment, and for the forseeable future, is snipe. And I am lucky - my colleagues who live in sydney cannot afford houses there, period. My cousins who live in Canberra, who make more than me, cannot afford a house there - there a house is $350k+. But, I am only spending on the mortgage (and council rates and home insurance) what I have previously been saving and paying as rent. And have been for the last 3 yrs. On top of that I have considerable 'fat' to take care of any interest rate hikes. I have saved up about 6% deposit, just above the minimum. a 20% deposit on a $270k house would mean saving for another 18 months.

As for the energy thing Most places in Dubbo have ducted evaporative air-con with natural gas points. Hot water can be either electric or gas. However I have toyed with the idea of going solar for my hot water.

01loadedLE

You think those colors are bad you should have seen the house I looked at. Beautiful on the outside with great landscaping but on the inside I walked into a kitchen with pink cabinets that had yellow handles on them! It was absolutely the most horrible kitchen I'd ever seen and will ever see in my entire life! lol

True about house cracks. I forgot to mention those. If you see any cracks in the foundation, bricks, or inside walls then you want to see proof that the foundation was repaired to where that wont happen anymore. This is another reason not to live on a slope because the house likes to move like the ground does and cracks appear. True about trees over the roof also. Had one do damage to the roof once because I didnt have it cut back sooner, plus tree rats can get into your house that way too and really cause problems.

Bikeman982

Home ownership is nice - but if something breaks - don't call the landlord.

You have to fix it yourself.

Good luck.

c2105026

well actually many places out this way have some cracking because of the drought we are having. as the ground dries out, it shinks, we can get some differential settlement. when the drought breaks, and it rains, we get the ground swelling again, and the cracks usually close up, if left alone.

I shall keep an eye out for the trees....

oh BTW saw a great place after work today. 4br, 2 bathrooms, great condition, great yard. huge space. made an offer. ad said offers over $270k. I started the ball rolling at $257k, but was told by the agent that an offer of $270k had been knocked back previous week, and the owner was really looking for $285k. I concluded that my celing was $275k, and that would be my final offer. Will see what happens...

yes i went to my celing but it was truly a magnificent property. compared to others i am seriously considering, it simply isn't in the same planet. when i saw it, it blew my socks off....

01loadedLE

Did they accept your offer? Hope so since you really like the place.

Bikeman982

Fair market value - if they want to sell it for that price, then you can become the new owner.

c2105026

Well, a couple of days ago I took the afternoon off work and inspected all places I am interested in, with my mother in tow for a 2nd opinion.

The place I offered on was the pick but there was another place that was a bit smaller (only 3 bedrooms, 1 bathroom), a bit older (1983 vintage rather than 1990), but was available for $32k cheaper, and further more is precisely 1km/0.6 mi closer to shops, work gym etc. area isn't as good but is still satisfactory. Is actually across the street from a LDS church. The place i originally offered for would have taken all my current cash reserves, and would have, whilst still been affordable, taken up all excess weekly earnings. So I ultimately passed on it, and made an offer on the cheaper place. The were asking $249k, I offered $244k. They came back with a counter offer of $245k, which I accepted. The bathroom has a spa and is renovated, the kitchen is original but works well with rest of the house, and since it is in sound condition I shall leave it for now.

When I got back in the office (actually got the call on the way out to site) and finished all my work I needed to do I got in touch with the bank, the agent, and a solicitor. So the ball is rolling, only hurdle is now that the bank wants to value to property to ensure I am not paying too much for it. If it turns out I am, then its over. However my parents say this is a standard procedure. But once that is out of the way, should be alright.....

01loadedLE

Congrats. Hope it works out for you. Make sure you get an inspector who has years of experience since you dont want someone coming out and overlooking anything. Not that an experienced inspector wont do it too sometimes but anything to tip the scales in your favor is good. Make sure to ask him if the plumbing is up to code especially around the water heater so you wont buy a house that needs to be updated. If its not up to code then get the sellers to pay for it.

Max

Sellers are not required to bring anything up to code where I live. Sure wish they were!

Bikeman982

Around here the homes are constantly appraised.

The majority of the times a home is bought or sold it gets appraised.

I think the city wants it done so the value goes up and they can collect more in taxes.

I never really hear of the taxes going down when the home goes down in value.

01loadedLE

Max the good thing is that youre not required to buy if the seller isnt willing to bring it up to code for you since you can negotiate that into the agreement. Many sellers are willing to do that to make the sell but some hold out for other buyers that wont demand that when they can afford to. If you have the money to fix it then there's no problem, otherwise I'd find another place. default_wink

Bike he's probably referring to property taxes which are a certain percentage of the home's value. There have been some problems in places with home values being adjusted to more than theyre actually worth so people will have to pay more taxes.

Bikeman982

Max the good thing is that youre not required to buy if the seller isnt willing to bring it up to code for you since you can negotiate that into the agreement. Many sellers are willing to do that to make the sell but some hold out for other buyers that wont demand that when they can afford to. If you have the money to fix it then there's no problem, otherwise I'd find another place. default_wink

Bike he's probably referring to property taxes which are a certain percentage of the home's value. There have been some problems in places with home values being adjusted to more than theyre actually worth so people will have to pay more taxes.

That's exactly what I was referring to - Property taxes, based on the appraised value of the house.

 

The taxes always seem to go up, but if the home value goes down, the taxes never seem to go down.

c2105026

In australia, property taxes - or rates as we call them - are largely set by the local council, and are basically proportionate to land value. As for increases, councils usually are allowed to increase at the rate of inflation but any more needs to be approved by state government.

01loadedLE

Oh ok bike I see now. Youre talking about the percentage rates not going down. I was focused on the payment being less when the house is devalued to where its less taxes that way even though the percentage rate remains the same. Yes taxes never get decreased anywhere and when they do its very rare. All that our states and govts want is to raise taxes. Nothing is ever enough for those leaches.

Bikeman982

In australia, property taxes - or rates as we call them - are largely set by the local council, and are basically proportionate to land value. As for increases, councils usually are allowed to increase at the rate of inflation but any more needs to be approved by state government.

Sounds like a good method to keep the taxes from becoming excessive.

 

 

c2105026

latest update - contracts exchanged this afternoon! now we just need to wait til the first of august for settlement. Went to the council today with my solicitor to look at all plans, development applications etc. I got a copy of the original plans. Using these, I have developed a 3D model of the house on home design software I have, in order to figure out where I will fit in my current and planned furniture. Looks like after I get a 2+3 seater suite for the lounge room, and replace my 5 peice dining suite for a 7 piece job, I have a 2 seat sofa left over.....

Bikeman982

latest update - contracts exchanged this afternoon! now we just need to wait til the first of august for settlement. Went to the council today with my solicitor to look at all plans, development applications etc. I got a copy of the original plans. Using these, I have developed a 3D model of the house on home design software I have, in order to figure out where I will fit in my current and planned furniture. Looks like after I get a 2+3 seater suite for the lounge room, and replace my 5 peice dining suite for a 7 piece job, I have a 2 seat sofa left over.....

Sounds like you are doing some great planning.

 

Nice to know where everything will fit before you physically try to move it.

Most people purchase a place, move all the furniture and then try to make it all work.

c2105026

well, we moved in 4 weeks ago. I enlisted the help of my boss and 2 co-workers, who had pickups and trailers.

I promptly started on some light renovations. Here is what I have planned

*repaint throughout - so far I have done the lounge room and the master bedroom. The 2 back bedrooms, kitchen and meal room remain, but this will require alot of time due to having to sand back and re-stain the window trims and skirting boards. The colour is Dulux Hogsbristle, with a Dulux Arava feature wall - basically a light brown/grey and a choclate/caramel brown feature. See dulux website for details. So far looks great, especially with the dark wooden furniture and the black leather sofas in the lounge. Due to stock availability I only got 2 2 seater sofas, a 3 seater was a 3 month wait.

*New lights - I have updated the lighting inside and out, in line with 2008 fashion. Basically 2 exterior coach lights, and 5 interior lights. The look is modern, bold and masculine.

*New doors - the front door and bifold door into the lounge have basically had it, so they will be replaced. The items I ordered have arrived in dubbo, but am still awaiting installation. Front door and the porch entrance door will both be painted bright red, which should contrast well with the dar brown brick and exterior colours.

*Tiles - The porch, foyer and kitchen splashback are scheduled to be retiled. Also the handles on the kitchen cupboards have also been changed. A new kitchen countertop is also being planned.

I was unable to get the 7 peice dining suite I wanted in a reasonable timeframe, so I now have a 9 piece that oddly still fits.

*Blinds - got new vertical blinds in master bedroom and lounger. Were a pain to fit....then I found the instructions....oh well!

Bikeman982

It would have been easier to paint when all the furniture was out and the house was empty.

The first thing I invested in for my home purchase was a complete re-do of all the windows and the sliding glass door.

I had the old ones taken out and modern, energy efficient, double-paned glass ones put in.

It has cut out a lot of the outside noise and helps with temperature regulation.

I have since changed front door, taken out all carpeting and installed laminated flooring.

I also put in a back patio (brick) and have painted the entire outside of the house.

Just recently had the main bathroom upgraded and am getting estimates to re-do the master bedroom bath.

When you own a home - the work is never done.