Melbourne Home Buying Tips and Guide

How to buy your home in Melbourne and Australia?

Buying your first home is an exciting phase in life. After decades of staying with parents and renting, you can finally look forward to staying in a place called "My Home". It is exciting, but it can also be very daunting, especially if it is going to be your first home.

Buying a property used to be as simple as looking through the listings, attending the open for inspections, and making an offer for the property. It was simple.

But thanks to modern day marketing, it is unfortunately full of complexities now. It is possibly the single largest commitment you make in your life. Do it wrong, and it will become your biggest liability in life.

As Melbourne based Buyers Advocates (Buyers Agents), our buyers agents have been buying properties for over 20 years. Our experience working with our home buying clients shows that many home buyers are not properly prepared to prevent themselves from buying a lemon or a dud property.

This guide will show you how to prepare yourself for the exciting challenges of buying your home in Melbourne, what you need to watch out for and how to buy the home you want.

Can you rely on Social Media for Property Answers?

While it is usually not the home buyers fault for being ill prepared, some buyers had unfortunately believed Dr Google and Prof Facebook are fantastic sources of information. Even more wrongly believed they had instantly become property experts simply by googling for answers and crowd-sourcing advice from social media and online communities. Social media is probably only as good as generic answers. Each property is unique, and you would not believe the hard times we have, trying to correct some of our client's misinformation.

Why are there so much misinformation about properties?

There are hundreds of different property markets in Australia. There are simply too many different types of housing, regions, areas, suburbs, and product types to cater to the different needs of buyers.

Our experience tells us that there isn't a one size fits all answer to your home buying question. And whoever sells you a one sized solution is taking you for a ride and they have a different agenda.

Without understanding what you want in detail, one will usually be left with misguided believes, myths, unfounded fear and misinformation.

What all buyers should know in the Real Estate World

Every home buyer should know, the whole real estate buying process is stacked against the typical buyer. A typical property seller has a trained selling agent protecting, negotiating and working for them, while a typical property buyer is usually left to their own devices. Buyers are usually left to deal with an experienced professional who had been trained to extract every cent from them. What most buyers don't know, is that regulations mandate that real estate agents have to look after the interest of whoever pays them. This link explains what all buyers need to know about the real estate agents. So, unless you're experienced and known what you're doing, the seller has the upper hand, with the sales agent protecting them.

What preparations do you need before you buy your property?

In this article, we have compiled a step by step guide to owning your own home. We will also give you some facts which you must know, and some buying advice on how you can avoid problems later. As most people do not buy more than 3 properties in their lifetime, the mistakes covered here are applicable to both first home buyers and home buyers as well.

How much salary do you need to buy a house in Melbourne?

This is probably the FIRST thing you need to know. You can either talk to your banker, or have a chat with a mortgage broker. They will give you an idea, based on your income, expenses, assets and liabilities. Generally, the bank or lender is prepared to lend between 5 to 7 times your annual salary. eg, if you have an annual income of $100,000, you will have a serviceability of between $500,000 and $700,000. How much you get from the lender would depend on the lender, your expenses and other assets and liabilities.

What salary you need is dependant on the type of property and location of the property you are after.

If you need a tailored advice, we have our team of prefered mortgage brokers who have access to a broad range of lending products, to help our clients. Ask us for a referral.

Where to buy a house in Melbourne?

There isn't a one-size fits all answer to this. Some say the real estate in Melbourne is made up of over 100 different markets. Prices range from under $300,000 to well over $50,000,000, with apartments, studios, houses, attached houses, townhouses, bungalows, villas, chalets, life-style properties, etc.

When we onboard a client, we start with what they want in the property. Size of house, number of rooms, location, amenities, public transport, highway, etc, in an interactive deep dive session, covering over 80-100 questions. At the end of the session, both the client and our buyers advocates will understand the client's needs and wants and would have a good idea where to buy the house for them.

What costs are involved in buying a house in Victoria?

Unlike other investment products, real estate has a higher purchasing cost and selling cost. So, it is a long term investment commitment. The good thing is, growth is guaranteed, if you buy in the right property at the right place.

So, here is a run down of the costs involved in buying your house:

• Government Stamp Duty - Approx 5.5%, for budgetary purposes.

• Conveyancing - Between $1200 to $1500 or more

• Building and Pest inspection - usually around $1000

• Due Diligence searches - fees and costs varies depending on what you need to investigate

Other intangible costs:

• Time cost, for the search, due diligence, inspections, searching for professional services.

• Fuel cost, when you go for the inspections.

• Stress

5 Top Tips for the First Home Buyer

As buyers agents, our First Home Buying service has helped many first home buyers buy their homes fast and confidently. We've seen their pain points, we've seen what they struggle with, and we've compiled these 5 top tips to help first home buyers avoid the challenges home buyers go through.

1. Get your finances ready

Find out how much cash you have to pay for the property. This is the cash you intend to use for the deposit to your property. If these cash is not already sitting idle in your bank account, find out the lead time to get your cash ready, and start to consolidate these funds and bring them into your bank account. Get this ready, so you can make your offer, once you find the right property you want.​ In a buyers market, speed is critical.

Also, find out the various grants and loans schemes which are applicable to you. Some of these grants are available upfront, while some are available during other phases of your ownership journey. Some of these grants and loan schemes are:

• If you are a first home buyer, you might be eligible for the First Home Loan Deposit Scheme (FHLDS).

• First home buyers might also be eligible for the First Home Owners Grant (FHOG)

• Some single parent home buyers may be eligible for the Family Home Guarantee Scheme

2. Understand your borrowing power or serviceability

3. Determine what you want in your property

4. Your plans for the property

5. Start searching 😜

​With the ever rising interest rates and changing property market conditions, many buyers are hesitant to take the plunge. Some are even paranoid given the seemingly uncertain market conditions. The more proactive buyers have resorted to engaging the services of buyers agents (or buyers advocates) to help improve their chances of finding good deals and good properties, while some prefer to sit on the fence and wait till the storm blows over. There are no right or wrong.

Most home buyers are caught in this catch-22 situation. When everyone is not buying, they are afraid to buy. They only start their buy process when everyone else is buying. But they often find themselves competing with other buyers and being priced out of the market.

Do you need a buyers agent to buy a house?

No, you do not need to. It is not mandatory to engage the services of a buyers agent. However, buyer's agents can assist you in several ways:

1. Define your housing preferences and ideal location.

2. Explore alternative options and potential areas for your purchase.

3. Identify the finest properties from both public listings and undisclosed off-market opportunities.

4. Develop an effective buying strategy and determine the optimal time to make your purchase.

5. Represent you at auctions or negotiate for the most favorable property price.

6. Oversee the entire buying process on your behalf.

7. Serve as a mentor and guide throughout the entire purchasing journey.

8. Provide peace of mind, knowing that you're in capable hands.

Benefits of Using a Buyers Agent to help with your house purchase

Buyers Agents or Buyers Advocates may charge you a fee for their services, but in return you get:

1. Better access to properties. In addition to the public listings, we will include searching off-market sources for suitable properties.

2. Buy in under 2 months. Speed of purchase is king. You get to enjoy the benefits of your properties sooner, enjoy growth sooner and pay less rent, if you are renting.

3. Save money. In the bigger scheme of things, the buyers advocates fees are tiny. While a typical fee may cost about 2%, our experienced negotiators typically save buyers between $30k to 80k. Our largest savings to date is a whopping half a million. Yes, that is $500k saved on a $3 million house. A savings of 20%.

4. Save stress. We do the search and due diligence, and organise all due diligence inspections, conveyancing, etc.

Still not sure? Have a chat with us. Our home buying service have been helping first home buyers get into the property market, and we can help you buy home faster and more confidently. Let's discuss if we are able to help you. Book in your free consultation.