10 Things to remember when buying a property in Parramatta
Western Sydney is an extremely attractive area of Sydney with its luscious green parks, diverse neighbourhoods, upcoming suburbs and new housing developments. All these things make Western Sydney an attractive place to buy a property however some buyers and investors alike get so wrapped up in the excitement of buying a property that they make a bad decision about the property they choose to purchase. Often they don’t even realise they have purchased the wrong property until they go to sell it or try to lease the property many years later. When buying real estate, there are anomalies to be aware of so, whether you are buying an investment property or your dream home or apartment, here are ten things to remember when buying a property in Western Sydney:
1) Do your research and choose your area carefully to fit your lifestyle.
Know what you’re really buying and what it’s really worth. Is it attractive to other buyers and tenants – close to work, leisure, schools, shops and transport? Will you have the lifestyle you want? Are you going to live there for a few years or a lifetime? Don’t buy the cheapest property in the cheapest area. Buy the right property that fits your lifestyle at the right price.
2) Get your loan pre-approval.
Sort out your finance before you start searching for property (even if it’s only a conditional loan approval) as this will determine how much you can borrow and ultimately how much you can afford to pay for a property. Also make sure you have an emergency cash buffer so you can meet your loan repayments if interest rates rise or pay for any unexpected repairs or renovations.
3) Consider factors that may affect the value of your home.
Busy road? Beside a school? Far from shops and schools? When you inspect a property just once or twice before buying, some of these factors may not be apparent. For example, a quiet road on a weekend may turn into a busy road during the week. A house beside a school may have constant parking and traffic flow during the week but be quiet on the weekend. The nearest shops or school may be a 20 minute drive each way. Make sure you do your research around the area and you take your time to consider all these factors when deciding on a property to buy.
4) Look at Neighbouring Properties.
Check out your street and see who your neighbours are so you get a feel of the type of neighbourhood you will be living in. Also check with the local council to ascertain whether there are any outstanding development applications on neighbouring properties or general development in the area. You don’t want to discover that your open space views are going to be blocked by the neighbours adding another storey to their house or that a child care centre is opening up next door.
5) Get Building, Pest & Strata Inspection Reports.
Get a Building and/or Pest Inspection done on the property before you make an offer on a property. Although these reports will cost you, the benefit will far outweigh the cost. These reports are very useful and allow you to negotiate the purchase price as they give you insight into the condition of a property from an expert’s perspective. If you are buying an apartment, you also need to do a strata search to ensure the financial health of the body corporate and the apartment complex. Strata Reports will also give you information the amount of strata levies you can expect to pay every quarter when purchasing within a strata complex.
6) Review the Contract.
Make sure you have the right solicitor or conveyancer review the contract before making an offer or attending an auction. Reviewing the contract prior to auction or the expiry of the cooling off period gives you the opportunity to negotiate with the vendors for things such as: the deposit (5% instead of standard 10%) and the timeframe of Review of the contract will also alert you to special conditions that may identify issues with the property.
7) Be prepared before attending Auctions.
As discussed above, before the auction have your solicitor review the contract, carry out the building and pest inspection and have your loan approval in place (and in writing!). If you are the winning bidder at an auction, you need to be aware that there is no cooling off period like there is when buying via private treaty. You also need to pay the deposit, usually 10% by either personal cheque or a deposit bond, immediately following the auction so make sure you have the deposit ready.
8) Factor in Stamp Duty.
Stamp duty is a tax that is payable by the buyer when purchasing a property. It is payable within three months from the date of your exchange of contracts or on settlement (whichever comes first). It is important to factor in stamp duty when you are calculating your budget as the higher the cost of the property, the higher your stamp duty. For example, the stamp duty on a $1,000,000 property in NSW is $40,490 which is a significant amount of money that you must factor into your costs. To calculate your stamp duty in NSW, visit the Office of State Revenue NSW website.
9) Consider Land Tax.
You may need to pay land tax if you own property in NSW that is not your principal place of residence i.e. you are planning on renting out the property. In this case you may be liable for land tax if the land value (not the property’s market value) exceeds the current dutiable land value threshold of $482,000 (2016). To see whether you are liable for land tax, visit the Office of State Revenue NSW website.
10) Renovations are Expensive.
Be aware that building and renovating anywhere in Sydney is expensive. It can still be an excellent option with profitable returns for buyers to buy a fixer-upper. However it is important to do your homework and know the approximate costs of renovating and or building and factor them into your purchase price. You don’t want to buy a renovator’s delight and then be surprised by the contractor and tradesmen quotes after it’s too late. For renovations, be prepared to pay $3,000 — $4,000 per square metre (sqm). Obviously you can pay more or less than this depending upon the quality of the workmanship and the finishes you select however consider it a guide when doing your initial calculations.
About Jhai Mitchell
Jhai is an award winning Internet Marketing Real Estate Agent for Elders Toongabbie and Kings Langley. After running his own internet marketing business he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to market themselves online. Jhai is now fixed on one goal. To teach real estate agents that they can market online so much better than they currently are.
Since then he has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. He is a regular guest blogger on TheHomePage.com.au, sharing his expertise of marketing aspects for the Real Estate Industry. His biggest passions are his wife, martial arts, dogs and most of all property.