Whether you’re a first-time investor or you're looking to upsize your portfolio, here are five tips to help maximise your buying power and negotiate a better deal.
Blogger: Kim Clarke, managing director, Xcel Properties
1. Compare your options for securing finance
First-time buyers can be overwhelmed at the thought of financing large sums of money, yet there are many ways to structure and secure a loan. Banks are becoming increasingly competitive, with many offering fixed, low-rate loans that are ideal for new buyers. Before applying, loan comparison websites can be a helpful starting point, allowing you to compare loan products. Also, talk to a mortgage broker about options that could best suit your circumstances.
2. Don’t buy emotionally
The best advice I can offer new buyers is to treat your purchase like a commercial transaction. While it’s important to see yourself living comfortably in your new home, buying emotionally can cloud your perspective and your options. Consider the gains to be made on your purchase. Your first purchase is unlikely to be your last, so it’s worthwhile reviewing properties that will allow you to release equity in time and help you progress up the property ladder.
3. Take advantage of property cycles
Many strategic buyers go against the grain. They buy when others are selling and sell when others are buying. So why not consider a counter-cyclical approach? In a counter-cyclical market, you can often find properties at more affordable prices before they hike as demand sets in. Remember, regional markets in Australia generally experience shorter property cycles, spanning three to four years between peaks and troughs, compared with seven to eight years in capital cities.
4. Negotiate not just on price but also on time
In regional areas like Mackay, it’s a buyer’s market and consumers are in good position to negotiate on both price and time. For example, consumers should discuss extended settlement terms with their developer, allowing them more time to finalise their finance requirements.
5. Check your credit history
First home buyers should review their credit history. Remember, lenders are required to assess your credit worthiness based on the information contained within your personal credit file. This includes your account repayment history, the type of credit accounts on your file, and whether payments have been made on time. You can request a copy of your credit file from www.veda.com.au. If anything on your file doesn't make sense, I recommend making an enquiry to the financial institution that recorded the information in question. If you believe information to be incorrect, seek expert advice from a trusted mortgage broker, financial advisor, or lawyer on your next steps.