Enemies of the First Home Buyer
>> Jul 27, 2012
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The huge amount of money that can be spent on home repairs was the theme
of a very funny 1986 movie starring Tom Hanks and Shelly Long. The title of the
film ‘The Money Pit’ says it all. Something for first homebuyers to consider is
the fact that the idea for the film originated from the large number of real
life tales circulating among the general populace.
Problems with a house may not be obvious to the untrained eye. Faults
with foundations, electrical system, plumbing and the roof can be very
expensive to remedy. A ‘maintenance free’ home may be one that has not been
maintained for 25 years. No need to worry about a newly constructed home though
is there? Not true say experts, have any home you are thinking of buying
inspected.
And that is the answer – have a fully qualified housing inspector check
the house and provide buyers with a detailed report. The average fee Australia
wide for this service is $500. Some building inspection services will even
check a new house as it goes through the various construction stages so that
any faults are found before they are covered up. They will check that the
builder is sticking with the approved plans and complying with all of the
regulations.
Real estate advisors list quite a number of other potential traps that
first home buyers should be alert to:
The naïve assumption that interest rates will not go up. Buyers should
factor interest rate rises into their financial situation and be prepared to
handle a 3 – 4 % rise.
Failure to be aware of the full costs of home purchase can be another
problem. Items such as mortgage insurance, stamp duties, rates and body
corporate fees all add to what comes out of the pocket. At one time the cost of mortgage insurance was
added to the loan but this practice has ceased and the buyer must now pay with
his / her own money.
Another scary one is what can result from non-payment of the deposit
until finance is approved. The deposit is usually required within 3 days of the
sale. Buyers thinking they can reduce
their risk by holding off paying the deposit until finance is forthcoming may
find themselves in a sticky situation. The standard contract says that if you
want to cancel the contract because finance has not been approved you must not
be in breach of any other part of the contract. Failing to pay the deposit can
be in breach of the contract and therefore you would not be able to cancel the
contract
The above are some of the dangers homebuyers need to be aware of. There
are many more. Keep your eye out and be through with your research. Steer clear of deals that look ‘to good to be
true’ as you know what, they probably are.
Article by Joel who writes about Real Estate buying, selling and renting tips for companies such as www.Taylors.com.au/.