Andrew Smith

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Property Buying Tips

When buying a property, you sign a contract of sale to purchase a property, and you usually also sign a contract with a lender to repay a loan for several years. Buying a property is often a large financial commitment, which requires much preparation and due diligence to ensure that you are getting value for money. So it’s important to get it right!

Tips:

• Know who your friends are

Always be mindful of who the Real Estate Agent represents. No matter how nice they are to you they are representing the Vendors and they have the vendors best interest in mind.

• Do your due diligence.

• Engage your solicitor

Avoid signing a contract for the sale of a property until you get your solicitor/conveyancer to have a look over the terms and conditions.

• Building and pest inspections

Always arrange for a building and pest inspection it is money well spent for peace of mind.

• Never be afraid to negotiate.

When buying a property don't be afraid to offer the vendor a price much lower than the asking price especially if the property has been on the market for some time. What is the worst that can happen? The vendor will say no.

• Buyer’s advocate

If you feel you don't have the confidence to negotiate or don't have time to look at properties the consider appointing a buyer's advocate, such a licensed person can remove the emotion of buying from the scenario and may secure you a lower price. They have access to much of the same information as REA’s and are more likely to be familiar with the current listings and market conditions.

Rate Relief for Home Buyers

Mortgage borrowers got their long-awaited rate relief today after the Reserve Bank cut the interest rate, its first reduction in nearly seven years.

The central bank lowered the cash rate 0.25 of a percentage point to 7% from its 12-year high of 7.25%, in a move that puts pressure on lenders to reduce their rates in response.

''The evidence is that the tight financial conditions, in conjunction with other factors including higher fuel costs and lower asset values, have exerted the needed restraint on demand,'' RBA Governor Glenn Stevens said in a statement accompanying the rate cut.

''Indicators of household spending have recorded subdued outcomes over recent months, and credit expansion to both households and businesses has slowed.''

The RBA left open the possibility of more rate cuts to come.

''Weighing up the available domestic and international information, the Board judged that there was now scope for monetary policy to become less restrictive,'' the statement said.

''The Board will continue to assess prospects for demand and inflation over the period ahead, and set monetary policy as needed to bring inflation back to the 2-3 per cent target over time.''

The rate cut will be especially welcomed by consumers who have struggled with the high loan repayments at a time of rising food and petrol prices.

Commonwealth Bank, Westpac and the ANZ Bank all immediately announced cuts in their standard variable home loan rate of 25 basis points, matching the RBA's move.

The reduction will trim $40 off the monthly repayments on a typical 25-year, $250,000 mortgage.

Scott Murdoch - The Age