Are You REALLY Ready To Buy Or Just Kidding Yourself?
The decision to buy your first home is super exciting! But it’s not long before the fear of being in debt for a crap tonne of money sinks in. How will you afford it? Will you ever have a “life” again or will you simply become a mortgage slave for the next 30 years, living on vegemite and toast.
House prices have soured in recent times and gone are the days where a 10% deposit is the first home owner’s grant! You’re having to chip in a hell of a lot more coin to make the purchase happen, and this in itself can be incredibly daunting.
Do you ask your parents for money?
Perhaps they can go guarantor on the loan or is it really a matter of saving your little heart out week in week out for the next 5 years?
I know first home buyers who have done all of the above, but at the end of the day, when settlement has taken place and you’re picking up your keys from the real estate office, the initial fear that you’ve just sunk a tonne of money into a place to call your own is long forgotten.
Heck, you’re a home owner now and that feels freaking amazing!
Gearing up to buy your first home is something many buyers do as a hit n miss type process.
They THINK they’re doing the right things and making the right moves, up until the point where these buyers hit a stumbling block in the process.
Asking yourself if you’re even READY to buy a house can even be overlooked when the excitement of the initial idea of it all takes hold.
I’ve seen first home buyers pull the trigger way too soon, simply because they felt pressure because all of their friends were buying their first houses. They needed to keep up with the Jones's but rather than run their own race, they dove in too quick and ended up backwards rather than forward.
If this is you, don’t fret.
There's no real race to the mortgage line.
Here’s how you’ll know if you’re REALLY ready to enter the big bad world of home ownership.
You’ve been thinking about buying a house for some time now, and it’s not just a fleeting dream, or a knee jerk reaction to your friends buying their first home. You actually WANT to make it a reality.
You have a glaring pain point that’s pushing you into property ownership. It might be living with the in-laws for too long, or perhaps you’re sick of that crabby property manager telling you to stop hanging pictures in the living room without prior permission. As the saying goes, rent money is dead money, and yep, you’re downright OVER paying off someone ELSE’S mortgage.
You’ve been to see at least two mortgage brokers about the possibility of getting finance. I say two because just going into your regular bank and having the in-house lender talk to you about buying a house is NOT enough motivation to really warrant being ready.
You've been saving consistently for more than 12 months and you have AT LEAST 10% of the purchase price of your intended house in GENUINE savings PLUS cash to cover stamp duty, legal fees, building and pest inspection reports and other buying costs.
On the flip side, here's how you’ll know you’re NOT ready...
Everyone else is doing it, so I should be too! If everyone was jumping off bridges would you be next?
You haven’t shifted your money habits from spender to saver. Your credit card outstanding balance is higher than your savings account.
Deposit?! What deposit? Saving $2,000 in 12 months is not going to cut it!
No you can’t put the stamp duty on credit! If you can’t pay stamp duty with cleared cash funds, you can’t afford to buy your first property.
Mum and dad are going guarantor so if I miss a payment I’m okay. So you’re okay to tarnish yours and their credit rating?! Poor attitude alert here. Responsibility ahead people!
Getting your head (and finances) in the right space is crucial if you’re contemplating entering the real estate market for the first time.
First home buyers often procrastinate for years before taking the plunge into home ownership, and rightly so.
It’s a huge decision.
But it’s this procrastination that keeps them from achieving their goals, and its often fear that is the real culprit behind all the go and no-going. Oh, and budget. Saving for a deposit can really slow the process down. I probably don’t have to remind you of this!
You need to be ready - mentally, financially and physically because anything and everything will happen throughout this process and no two buying experiences are ever the same.
You need to be prepared for what will be thrown at you, sometimes last minute, and usually from out of left field. Having an open mind, a just-go-with-it attitude, and a glass half full positive mentality will be your strongest allies.
As hard as it can be, remaining unattached to the outcome until the property has officially settled and you have those hot little keys in your hands is also something to be mindful of.
Things can and do change quickly in the real estate game and I’ve seen buyers who get their hopes up too soon be emotionally crushed to smithereens when something doesn’t go as they’d planned or expected.
Resilience is key.
So is patience, unemotional attachment, a clear plan, a well thought out negotiation strategy and a can-do, never give up kind of attitude.
Can you be all of this?
You might think I’m asking a lot, but if you can morph yourself into this kind of human being, you’ll be better prepared for the road ahead and be 100% READY TO BUY.