7 Important Financial Steps to Purchasing Your Next Home

Whilst there are many things that you will need to do physically to your home to maximise its selling price, it is important to understand all of the financial impacts during the sale of your existing home and the purchase of a new home. Even though the selling process may differ from State to State, sellers should consider the following suggestions before listing their home with an agent:

1. Determine how much your house is worth – Obtain a market appraisal from agents within your local area or invest in a property valuation.

2. Estimate your costs to sell – Agent’s fees, advertising, solicitor/conveyancer, property adjustments, surveys all add to the cost of moving home. Make sure you shop around to get the most cost effective service providers so that these can be factored into your financial plans.

3. Understand your existing mortgage payout and associated break costs – Make sure you understand the cost of exiting your existing loan to ensure that there are no hidden costs or break fees.

4. Determine the cost of making necessary repairs – Fixing outstanding maintenance items will help improve the value of your home and avoid buyers discounting the purchase price.

5. Estimate your costs to buy a new home – Costs may include loan application fees, transfer and mortgage stamp duties, valuation and lender’s legal fees, solicitor/conveyancing fees, building/council inspection, pest inspection, home and contents insurance, adjustments for council and water rates, moving expenses and utility connections.

6. Obtain pre-approval for a new home loan – As your financial circumstances may have changed since your last purchase, ensure you are able to obtain finance to afford your new home or to determine how much you are able to spend. If you believe bridging finance will be required please discuss this with your lending specialist.

7. Be prepared to negotiate – Buyers expect to get a good deal in todays market. Be realistic about your selling price. Understand your negotiation strategy and stick to it. Once you have considered all of these financial impacts, you should prepare a budget to ascertain the net proceeds from the sale of your home that will be available to purchase your new home. Then stick to your budget.

If you require assistance in assessing your borrowing capacity or calculating the costs of selling and buying a home, please call the office.