The new year is a time when most people sit back and set some goals for the year ahead. But why not think about your goals for next year now? If you are thinking of buying a property, get a jump-start on 2024 and be ready to buy by starting the pre-approval process and doing your research now.
Prepare a budget
If you haven’t already, prepare a budget so you have a clearer understanding of your purchasing power. Calculate your monthly income, subtracting your monthly expenses and any debts – this will show you the amount that’s left over, so you have a clearer idea on what you can afford for your monthly mortgage payments.
Keeping track of what’s going into your bank account (income, payments) and what’s going out (expenses) can also identify what you can cut back on – such as forgoing the daily café coffee or cancelling some subscriptions or memberships.
While setting a budget can be a simple process, it can also be a good opportunity to get professional advice during this stage. A broker can shine a light on things you may not have thought of, as well as provide a realistic perspective on what you can afford.
Begin the pre-approval process
It is also worthwhile starting the pre-approval process, if you’re looking to buy early in the new year. Having a pre-approval shows the seller that you are serious and can give you a leg-up on the competition. Also known as conditional approval, pre-approval gives you an indication of how much you will be able to borrow, which can help you when it comes time to bid.
You will want to get your paperwork ready including your ID, payslips, bank statements in order to submit an application form.
It’s generally free to get pre-approval. But keep in mind that pre-approvals expire – they are generally valid for three to six months – so this step is for when you’re closer to being able to buy.
Do your research
Now is also a great time to do your research. If you know which area you’re looking to buy in, research how the area is performing (realestate.com.au/sold/ is a great resource). You can also refer to real estate institutes websites as they list data such as the top growth suburbs by median house and unit prices. As well as researching online, get out and attend some auctions, especially in the locations you’re interested in.
It’s also worth narrowing down your needs and wants for a property. Most of us need to compromise somewhat given the cost of housing, so be realistic, but also be clear on what is a must – do you need a certain number of rooms, a backyard, parking spaces, etc? Are you able to buy a fixer upper and renovate or do you need move-in-ready?
Look into what government initiatives are available to you as a buyer, such as the Regional First Home Buyers Support Scheme or the First Home Buyer Scheme. State Government websites (such as revenue.nsw.gov.au) contain helpful information on the current schemes and grants.
Planning to sell
If you have an existing property, prepare a plan for selling. You will need to give yourself time to spruce up the property if needed, style it, have photos taken and put it on the market. Again, this is a good time to research the market as well to see what similar properties in your location are selling for.
If you didn’t buy the home of your dreams this year, try not to get discouraged, but also be realistic. As there have been significant increases in the cash rate which have flowed onto interest rates, it might be a time to re-evaluate where and what type of property you can now reasonably afford. Whatever your financial situation, we can help you start the process to prepare to buy in the future.