real estate newsletter

Buying your first home can be daunting, but it can also be incredibly exciting. One of our team has taken the time to jot down her experiences and share what lessons she learned as she purchased her first property.

A few years ago, my partner and I purchased our first home.

To set the scene, we had decided to finally throw caution to the wind and move overseas for a few years to work, adventure, travel and have new experiences.

Unfortunately, we decided to do this right at the peak of a rental crisis in Sydney. At that time, our friends were spending all their Saturday mornings in long lines, waiting for a real estate agent to let a horde of people trudge through yet another house they were unlikely to be approved to rent. There were just so many renters, so much demand, and so little supply.

With that in mind, and no sign it would ease, we were worried we'd be restricted to outer-suburb rentals when we returned, and daily travel of many hours just to get to work.

In honesty, our decision to buy was slightly based on panic. We're big into being prepared and looking forward, and we wanted to come back to some relative stability. So we started hunting for a home.

We knew we needed to live in the house for at least six months before we could take on renters, so we were facing a race against time to find something suitable. Long story short, we hunted around for approximately a month, dashing from open-to-open, watching bidding exceed our limits straight away at auction, and becoming a little disillusioned with the whole thing.

Just over a month in, an agent called us to let us know they'd were listing a great apartment in an up-and-coming suburb, in a modern and large unit block that was less than seven years old. Of course, our first reaction was there was no way we could afford it. We'd quickly learned, once we started looking around, that our limit was about $100,000 below what we would actually need for even a half-falling down house.

The agent informed us that the apartment was marked for quick sale because the owner could no longer afford the mortgage and wanted to invest elsewhere. We viewed the apartment and had our parents view it. Then we viewed it again.

Being from the country, I hated it — I could appreciate it was nice as far as apartments go, but to me it was one of many, it was stark and white and cold. But it was only just above our limit and practically new. The owner needed it sold and we felt we needed to buy. So we went in low, and we purchased our first home.

Here's what I learned:

Try as you might, emotion and time get the better of you

When we first purchased our place, as said, I didn't love it. For most people, it's the fact that they love a property too much, that they fall in love with it, that pushes them over the edge and causes them to settle or put down more money than they'd planned.

For us, it was other emotions that won out. We were driven by uncertainty and a need for stability, and in all honesty, we were SO tired of going to open houses and auctions. If I had to watch one more man swing a gavel around....

In saying all of that, now we have been overseas, returned a few years later and settled into our home, I love it, and I can't imagine living anywhere else. We made the place our own, filled in all the white with some colour and personality, and really made a home.

Letting your emotions get the better of you is almost inevitable, buying is a difficult and sometimes long process. It's exhausting and draining and often disappointing. But it's ok to be emotional, as long as you apply the mandatory logic the situation requires. As long as you know what you're real limit is and don't get in over your head, you've considered aspects that will affect resale, and you've negotiated and achieved the best price possible, listening to your emotions is absolutely fine.

Right now, I'm glad we let our emotions get the better of us, I love our home.

It costs more than you think

Maybe we were naive — we came from a real estate background, but it's different when it's your first time buying. It's personal.

Before we got started, we visited our bank manager and chatted through everything, spoke to our financial advisor and of course lapped up all the knowledge our parents, who have both purchased property, were willing to share with us. We thought we had it down.

In the end, our purchase ended up costing us more than we thought.

Firstly, we underestimated how much and how rapidly the level of demand in the city would increase, and how this would affect prices. What was a reasonable limit, quickly became too little to afford even remotely what we wanted.

Secondly, we came close with other places before we found ours, so we had several reports and valuations completed, which all cost money. On top of that, some of the legal side of things ended up being more complicated because of the position of the previous owner, so our solicitor expenses were a little higher than we expected.

The final unexpected cost was mortgage insurance. We had hoped to be able to use a guarantor, but our bank doesn't support guarantors and we needed mortgage insurance, which added almost $10,000 onto our costs.

If we're being really serious about cost, we should also consider the time and petrol spent running to opens and auctions every weekend. Ultimately, our purchase costed more than we thought, but was well worth it.

It also costs less than you think

This probably seems like a strange heading after reading the last section, but it's true.

Like a lot of people, we got really caught up in the price tag on our property, and when comparing it to our parent's first property purchase at $60,000, we made ourselves believe buying real estate was impossible. But what we didn't consider was that we were in a better position than they were, these days, many of us are paid a lot better than our parents were at our age.

In addition, interest rates make a huge difference. Sure, it was really tough to get our deposit together, we ended up selling our car and bussing it for a while so we could make up those last few thousand, but once we had the keys, we were surprised at how manageable our repayments were.

Compared to our Sydney rent, we were only spending a little bit more, and we had super low interest rates to thank for that. Our parents had told us how lucky we were compared to them, when it came to interest rates, and we didn't really understand that until we calculated how much our repayments would have been at their first interest rate, compared to ours.

Knowing how to negotiate is important

Still important if you're buying at auction, understanding negotiation, and how an agent runs a sale is really crucial to retaining some control. This was one area we were really blessed in because we both have experience with sales, and we have relatives who also helped out.

We had a lovely, but relatively controlling agent. She was desperate to sell this apartment before she lost her exclusive and because of that, she was possibly a lot more forceful than she would usually be. She used 'time limits' and apparent 'competition' to apply unnecessary pressure, and to make us feel like we had to scoop this up now or would lose the opportunity.

With a little counselling, we managed to take more control, slow the process down slightly, and ensure each member of our team, (building and pest, solicitors, financial advisers, our parents) could do their part before we made a commitment. Don't be pushed, own your sale.

It is worth it!

As mentioned, we are now really happy in our home, despite some of the compromises we had to make. We know we are blessed, we know not everyone can do what we did, but we also know we didn't do it easy. We scrimped and saved, made huge sacrifices, had no life for a while, added hours to our work journey when we sold our car, and finally, we were able to make up our deposit (just!). We got lucky and found an apartment selling below value (they are out there), and we got in before the property market pricing peak.

Regardless of the good and the bad, it was all worth it... and now we've started the long save towards property number two.

Using Sale Ezy

Obviously we're biased when it comes to Sale Ezy, but after going through the buying process, we can honestly say that the most complicating factor in the whole purchase was the myriad of other people we had to have involved. People, especially the agent, made things more confusing, made our voice less heard and left us with less control.

If we had it over (and hopefully one day we will!), we'd look forward to using something like Sale Ezy — we're comfortable with online purchasing due to retail purchases, we know there are real people behind it, and most of all, we know we can have the control we really wanted to have the first time around.