Finally get off the rollercoaster of offering #allthethings by uncovering your true potential
Expert buyer’s advocate, founder of Amy Lunardi Property and the host of The First Home Guidebook - an educational podcast & online course
that empowers first-home buyers with all the necessary tools and knowledge needed to buy their first home.
I love answering listener questions, and in my opinion, there’s no such thing as a silly question when it comes to property.
What’s most important is to ask the questions in the first place rather than stay silent and potentially lose out on valuable information or make a mistake out of fear of looking ignorant.
I’m 22 years old and I want to buy my first home soon. I’ve been saving for a deposit, but feel like it is so overwhelming and I keep losing motivation. I feel like I’ll never get there. Do you have any advice on how to stay on track?
This is a really common one, so you’re not alone. My biggest tip when it comes to setting and sticking to some kind of goal is to be really clear and specific on that goal so you know exactly what you’re trying to achieve.
Here’s a really good example of a general goal vs. a specific goal:
Notice how sentence A is pretty general and hard to quantify? Whereas sentence B is clear, achievable, and specific.
By breaking down a huge goal into smaller, bite-sized chunks, you’ll keep yourself on track, be able to measure your progress and stay motivated to achieve the bigger, more general goal.
Working backwards from a specific goal can also be really helpful because first of all, you need to understand if what you’re trying to do is achievable and realistic – you don’t want to give yourself goals that you can’t achieve because that’s a sure-fire way to lose motivation and give up.
Let’s workshop this.
A specific goal would be something like, I want to spend $600,000 on a property so I want to have a 10% deposit within 3 years.
It’s a great idea to sit down with a mortgage broker at the very beginning of your savings journey to understand if this is an achievable and realistic goal.
Questions to ask here are:
If I do save out that deposit, is my income going to be adequate to save enough?
Do I have enough borrowing capacity to actually achieve that goal and borrow $600,000?
If the answer is yes to all of the above, then what are all of the extra fees and charges that I’m going to need to cover and save up for as well in order to achieve that 10% savings goal?
Always leave yourself a little wiggle room with the expectation that you might fall off track at some point – it happens.
The bottom line is – be really clear and specific with your goals, and then break that down into smaller, achievable chunks.
Is it my legal representative’s job to measure the boundaries of my property?
The short answer is no – it’s not their job to do that.
Your legal representative’s job is to check what’s on the title with your property, but they don’t actually go and physically look at the property. This is something that I feel is often missed by buyers – it’s their job to highlight anything to their legal representative that should be checked and married up to whatever the agent has shown you and the information you’ve been supplied.
Here’s a really specific, lived example of why this is important.
During a past property sale, it was discovered that the vendor had been parking in what they thought was their parking spot of an apartment complex for many, many years. However, when we checked the title it wasn’t actually their spot. In the end it didn’t really matter, but it does pay to ensure that what you’re being told matches what is actually on the title.
When it comes to a house, it can be a little bit more challenging. Many legal representatives will say that ideally you should measure the boundaries of your block to make sure that that aligns with the title. However, that can be quite an impractical process because unless you get a land surveyor out, which is quite costly and can take some time to do, it can be almost impossible for you to know if the fence signs are in the right spot.
Let’s say, you discover your fence line is slightly out which is quite common with older properties due to fences being replaced and going out by a couple of centimeters, or maybe the whole street’s slightly out of place.
Whilst it’s a surveyor’s job to check all of this, what are the practical implications? If there is a clear discrepancy, it would be worth asking what’s going on here and you’d highlight this with your legal representative to check.
It’s also worthwhile discussing with your legal representative about a type of insurance called Title Insurance which can offer some protection if the boundary fences aren’t in place, and if there’s any issues that arise in the future around that.
I have a $10,000 credit card limit. How will this affect my borrowing capacity?
Literally any credit card limit will be assessed by the banks or lender as being a full debt because they look at it as future debt – even if you pay it off diligently every month and don’t owe anything, or haven’t maxed out your credit card.
Sounds a bit unfair, right? But whilst you might not owe anything on that credit card today, in theory tomorrow, you could go out and spend $10,000 on that credit card.
The general rule to understand is that the more debts and liabilities you have, the more it will reduce your borrowing capacity. This includes credit card, car loans, HECS or student loan repayments.
Before you start closing down accounts and reducing credit limits, be sure to speak to a mortgage broker to put a strategy in place to say, let’s start closing these accounts or paying off this debt.
Are all contracts the same?
The answer is no, not all contracts are the same but when it comes to buying a property, there will be a standard template depending on which state you are in.
Depending on the property you’re buying, there’ll be different disclosures in that contract about that specific property, but also, the vendor’s legal representative may add what’s called special conditions to that contract that will be different for each contract that you receive.
This is why it’s essential for you to have your own legal representatives, conveyancer or solicitor – to ensure there are no conditions in the contract that are particularly onerous or negative towards you as the buyer, or to make you aware of them and have a clear understanding of what they mean and what the risks are.
In the process of buying and selling a property, requests can be written into a contract for special conditions or deletions from both the vendor and the buyer. The vendor may not always say yes, but it’s still important for you to understand how those conditions will impact you.
Commonly, any special conditions are usually to do with delays to settlement – what happens if you default or you’re late to settle but it definitely pays to be diligent in ensuring no other conditions have been snuck in so you’re not hit with a nasty surprise if it happens.
Got any of your own burning questions? Feel free to DM me on Instagram @the.first.home.guidebook or email firstname.lastname@example.org
Want to learn more? Check out my online course The First Home Guidebook to help you buy your first home faster – without the fuss.
If you’re looking for professional support for buying a property, check out my buyer’s advocacy services over at Amy Lunardi Property.
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