6 Things To Know Before Buying an Established House. Should you buy one?
Updated: Feb 18
What is an established house? Should you buy an established house?
A residential established house is the most purchased type of property in Melbourne and Victoria. What is an established house? What do you need to know when buying this type of property? What are the pros and cons? How does an established house compared to other types of residential properties in Melbourne?
First off, what is an established house? It is a house that has already been built and pre-owned. Someone has already lived in it and are moving on from there. Some might call it a second-hand house or a resale house.
Benefits - Advantages of an Established House
One of the biggest benefit of buying an established house is its simplicity. The house is already available for you to view, touch, see, and you can imaging yourself owning and living in it. What you see is essentially what you get. If you are happy with it, you make an offer, and if it is accepted, you organise the financing, and wait for the keys. It is that simple. There are many established houses in the Melbourne property market to choose from. With price ranging from under $400k to well over $20million.
Most of these are in matured suburbs and in high demand locations. The location has been built up and established for ages, and more often than not, it will be near major amenities, such as shopping centres, supermarkets, schools, etc.
Downsides - Disadvantages of an Established House
The biggest benefit can also be one of the biggest considerations. Remember, what you see is what you get. The floorplan, layout of the rooms, kitchen. bathrooms, that you see, will be what you are getting. Tough luck if you do not like it. Investing on renovations will be the only way to change it.
Some of these houses can be rather old. In Victoria, one out of every 3 properties is affected by termites and pests. To have a peace of mind, you should also consider investing in a building and pest inspection prior to confirming the purchase. This will identify any major pest and termites infections, and structural issues with the building.
With building and pest inspections, it is critical to have it done by a good inspector. Once the purchase goes unconditional, you are pretty much on your own. If you do not know who to contact, should you rely on the recommendations of a sales agent for such inspections? No. We will discuss why, in another blog. Look out for that in coming weeks.
Other Things You Need to know when buying an Established House
Some considerations you need to be wary of are:
a. Stamp duty
First home buyers in Victoria will enjoy First Home Owners Grant (FHOG) stamp duties exemptions for properties up to $600k and some stamp duty concessions for properties costing between $600,001 to $750,000 in Melbourne. You might also be eligible for the First Home Loan Deposit Scheme (FHLDS), whereby you'll only need a 5% deposit.
You will need to budget around $1000-$1500 for conveyancing costs.
c. Council and water rates
The council and water rates are determined by the valuation of the property, and it varies from council to council. For a typical established home in Melbourne with a median price of $800k - $1.2 million, expect to pay around $1500 - $2000 annually in council and water rates.
d. Body corporate/Owners corporate
Stand alone houses usually do not have any body corporate or owners corporate fees. This fees is a common pool of money which property owners have to contribute into, to pay for the maintenance, and insurance and other fees and expenses in maintaining the common areas of the property, such as common drive way, walkways, etc. This does not usually apply for stand alone houses, but you should always confirm this with the vendor agent. This information is also available in the Section 32 of the Contract of Sales for any property in Victoria.
How do you choose the right established house?
Refer to our getting started guide. This guide should show you what you should do to get into the property market.
As you can see, buying an established house is probably the quickest and easiest way of buying a residential property. You can move into an established house in 4 weeks or under.
What else do you have to consider?
Feel free to have a chat with us, if you need further guidance.