It’s no secret that the QLD property market is currently red hot, with house prices increasing by almost 5% in just the past year. With increased buyer demand (at least partially caused by an influx of interstate migration), properties in Brisbane are selling fast. Because of this, buyers may feel pressured to quickly make an offer (in case they miss out).
But it’s never a good idea to commit to a significant purchase without doing your homework. So, the team at Coronis Finance have put together a list of 5 common risks that come with buying in a hot property market and advice on how to safely avoid these risks.
Risk #1: Lack of Preparation
You’ve probably seen plenty of #FOMO memes doing the rounds on social media in recent months, but that doesn’t mean the fear of missing out isn’t a real-world problem. In fact, a fear of missing out can sometimes cause rational buyers to act irrationally…like diving into house hunting before they’re prepared to make an offer.
How to Avoid Risk #1: Get Home Loan Pre-Approval
If you’re thinking about buying a property, always start by talking to a broker about home loan pre-approval. Pre-approval will help you to narrow your property search to focus on suitable houses in your approved price range (with no time wasted looking at homes you can’t really afford). And most importantly, pre-approval can give you an edge when you’re ready to make an offer.
Risk #2: Failing to Calculate All the Costs
Don’t get so focused on property prices that you forget about the other associated costs that can come with buying a new home. Failing to calculate the costs could result in unexpected bill shock or, even worse, it could cause you to miss out on a property altogether.
How to Avoid Risk #2: Put Together a Budget
When itemising possible buying costs, make sure to include:
- Stamp duty
- Government fees
- Conveyancing or legal costs
- Inspection fees
- Council rates
- Moving costs
If you’re looking at buying a unit or apartment, you’ll also need to factor in strata fees. And if your deposit is less than 20%, you may also be charged Lenders Mortgage Insurance. Your Coronis Finance broker can help you compile a complete list of buying costs (plus any applicable selling costs if you’re planning to sell before you buy).
Risk #3: Skipping Building Inspections
If you’ve fallen madly in love with a house, you may feel hesitant to include any “subject to” clauses in your offer. You may worry that the owner will overlook your offer in favour of someone else (someone less picky). But unless you’re an experienced builder who knows what to look for, skipping a professional inspection may very well be a decision that comes back to haunt you later.
How to Avoid Risk #3: Always Ask for Building/Pest Inspections
When making an offer on a property, consider including a clause stipulating the sale is “subject to building/pest inspections”. This will allow you to arrange for an independent assessment of the property by an experienced professional. And if a significant problem is discovered (such as a termite infestation or serious water damage), you’ll have the option to withdraw your offer or negotiate a lower price.
Risk #4: Trying to Do Everything on Your Own
If you’re on a tight budget or you’re in a big hurry, you may feel like it will be faster, cheaper and easier to just handle everything yourself. But by trying to manage everything on your own, you’re far more likely to encounter avoidable delays and added expenses.
How to Avoid Risk #4: Take Advantage of Expert Advice
Homebuyers have access to a great range of expert advice from experienced professionals who are happy to help. So, take advantage of all the help that’s available! You can get valuable assistance from brokers, conveyancers, real estate agents and other industry experts. If you’re unsure who to talk to, ask the team at Coronis Finance for helpful industry contacts.
Risk #5: Applying for the Wrong Home Loan
If you’re worried about missing out on the perfect home, it may be tempting to apply for the first home loan you see – regardless of how suitable it actually is. But applying for the wrong home loan could end up costing you significantly more over the life of the loan.
How to Avoid Risk #5: Talk to the Team at Coronis Finance
To make sure you end up with the best home loan for your circumstances, contact the expert team of brokers at Coronis Finance. We’ll do a thorough assessment of your current financial situation and compare suitable home loans to determine which lender can deliver the most competitive product. We’ll also take into consideration what loan features you need and the best way to structure the mortgage, to make sure it’s a perfect fit for your ongoing needs.