I thought I’d share a few things I’ve learned when looking for a new house. Feel free to share any of your tips in the comments.

1/. It’s important to check out the neigbourhood at different times of the day and week

Days, nights, weekdays, and weekends. In particular Friday and Saturday nights. Check the recycling bins on collection day and talk to the neighbours. What you are trying to find out is the safety and noise level of the neighbourhood. Buying a house is a huge purchase to find out later that you live next door to gangs or unruly citizens. Sure, neighbours can change over the term of your ownership, but at least give yourself every chance to start off right. There is nothing like a neighbor from hell or pesky street light that shines directly into your house to ruin even the best house.

2/. Try and find out if some of the houses in close proximity are rented or owned

If rented, people tend to change more frequently, and there is not as much pride in the property or neighbourhood.

3/. Be prepared to compromise on your wants in order to fulfill your needs

Due to stage of life, you won’t be able to spend too much on your first house. Because of this there may be a few things on your wish list you cannot get. That is fine, just make sure you get your must haves. For example, sacrificing a new kitchen in order to live in your desired neigbourhood. You can always do work to the house, but you can’t change its location. Likewise, it’s much easier to change a paint or carpet colour than it is to change the insulation and structure.

4/. Keep an eye out for proximity to fire stations, barking dogs, and airplane routes

May seem small at first, but the noise can be annoying late at night and early morning. Will make for a harder resale too.

5/. Keep an eye out for fresh paint

Can be nothing, but often is used as a cover up for mould or cracks.

6/. Always have a building inspection report conducted at your expense before buying

Your offer should be conditional on the result of the report. Some sellers may try and give you their report, but it is biased. Other times the real estate agent who has an interest in selling will recommend someone too. Do not use their recommendations. You need someone independent. Make sure that your inspector will get on the roof and under the house. It’s unbelievable the number of cowboys that do not do this. You need someone thorough, even if it means more expensive. If there are any major issues, you can withdraw your conditional offer, require the seller to fix the issues, or negotiate for a lower price.

7/. Always get a LIM report for the property before buying

This will inform you things about the property that the council holds on file. Such as sinking land, flooding, high wind zone, rates information, sewerage information, modifications to the house, future zoning plans, and anything else the council deems relevant. I lived in a house with a high wind zone and it was unpleasant to say the least.

8/. Check the house sales history

There are many websites now with historical house information. If you see the house has been sold several times in a short time frame, then there is likely something wrong with either the house or the neigbourhood. The house I mentioned with the high wind zone, had been sold 3 times in 4 years when I bought. That should have been a warning sign. We only lived there for two years before we had enough. A real estate agents job is to know as little about the property as possible, so they do not get sued for not disclosing something. The onus to find out is on you.

9/. Get pre approved for a loan so you know exactly the maximum you can spend

So you can make a quick offer if you find a place you like.

10/. Try and find a house below your pre approved amount

There are often many surprise expenses when you first purchase a home due to things that have been covered up, or not disclosed, by the seller.

11/. Negotiate with several banks for the mortgage

Get more than one pre approval. Then you can go to the bank with the best mortgage rate. Play them off against one another. Use a mortgage broker if you aren’t comfortable negotiating. A good mortgage broker will also be able to help with the correct structure of your loan. Brokers are currently free. They are paid by the banks for bringing them business. A good broker will compare at least 3 or 4 options for you.

12/. Don’t buy a house with less than a 20% deposit

You will be subject to increased bank fees and you will not be able to get as good a mortgage rate.

13/. If you can look past ugly paint and carpet, you can often get a good deal if the house fits your other criteria.

Many people can’t see past that, so that means more opportunity for you to get a good price. Just don’t take on more upgrades and repairs than you can handle.

14/. Don’t rush into a purchase

Ever. You are making such a big decision. Sellers will pressure you always. Telling you how other people are interested. They may be telling the truth, they may not. Regardless, don’t rush into the deal until you have done all your homework. Sellers are generally under more pressure than buyers. You can walk away, generally they can’t.

15/. Keep an eye out for how long a house has been on the sales market for

The longer a house has been for sale, the more distressed the seller will become. This means they will be much more willing to lower the asking price. This is the time for a cheeky offer. A long sale could also be a sign of building defects, LIM report issues, or a bad neigbourhood.

16/. Find out the real reason the seller is selling

By finding their motivation you can determine how desperate to sell they are. One of my purchases, I found out the seller had already bought another place and they were desperate to sell. This allowed us to put forward a very cheeky offer well under the asking price.

17/. Don’t buy a house with friends or family

18/. Don’t fall into the dream house trap

You will see a house that you fall in love with and must have. This is dangerous thinking as it means you will pay too much for the house, as your emotions have got in the way. It’s easy to think this is the only house for you, but trust me, there will be many more dream houses that come on the market.

19/. Don’t forget to consider all the costs of home ownership, not just the mortgage

This includes rates, insurance, maintenance, repairs and upgrades. A general rule of thumb for non-mortgage costs on a per annum basis is 2% of the purchase price. Things break all the time. Do not underestimate this.

20/. Visit as many open homes as you can

As you visit more, you will get much better at knowing what to look for, what you like, what you don’t like, and how much houses are worth.

21/. Check the water pressure on cold and hot, and how long it takes to get warm

No one likes a cold, low pressured shower. Also check the toilets and sinks drain OK.

22/. Check for signs of ventilation, condensation and mould

A cold and unhealthy house is not worth it. Dead giveaways are discoloured walls and ceilings, peeling paint, mould behind the curtains and in wardrobes or cupboards, lack of windows, lack of sun, a damp and musty smell, and too many dehumidifiers or deodorizers. Walking around the house barefoot can also help find any dampness underfoot.

23/. As a rule of thumb, don’t spend more than 30% of your take home income on housing costs

Run the numbers before buying. Buying the biggest house you can afford is terrible advice.

24/. Whatever today’s mortgage interest rate is, add 3% to it

Mortgage rates can and do increase over time, and this will help determine how well you financially cope under mortgage stress.

25/. A good way to help with your mortgage is to rent out a room

If that is the case, then consider buying in a location with strong rental demand. A house with a room separated from the rest of the house would be ideal.

26/. Don’t buy extra insurance products from your bank

Mortgage protection and home insurance are generally cheaper from non banks. Use an independent insurance broker.

The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here