After two and a half years of frustration, a couple finally bought their first home, but were surprised by the hidden rates.
For Toni and James, buying a property was an essential financial investment.
But in reality, the process was much more difficult and much more expensive than expected, discovering along the way a series of hidden tariffs of which no one had warned them.
“It took us about two and a half years to buy a property,” Toni told news.com.au.
“Our initial plan was to save for 12 months, but due to Covid and the rising housing market when we were about to buy, demand increased and supply went down.”
Despite trying to maintain a positive attitude and use the extra time to increase his deposit for his future home in the western suburbs of Adelaide, Toni said the wait was “almost counterproductive.”
“Housing prices continued to rise for much more than we saved. It always felt like we were in the same position, ”he said.
“Nobody Talks About It”: $ 15,000 shock
Just when the couple was about to surrender, they were finally lucky. They bought their first home for just under $ 400,000, with a $ 70,000 deposit and another $ 10,000 they had saved for moving expenses, such as furniture and removals.
Although they had been carefully saving the day they finally got a property, they were amazed at how much they had to spend on fees.
“When people say you need a 20 percent deposit, that doesn’t include fees such as stamp duty: they can be over $ 15,000,” Toni said.
I couldn’t understand why no one was talking about how much to pay in addition to a deposit.
While the couple was able to save money on their own by reducing social activities, they were also lucky enough to be able to live with James ’parents without rent after James made a change in the industry that made him return to work. as an apprentice. .
“We didn’t pay rent during that period, but we did have bills … and additional travel expenses for me,” Toni explained.
Thanks to about $ 2,000 in mortgage insurance fees from lenders who hadn’t budgeted, they were below their target of a 20 percent deposit, plus the deposit of fees. Still, they felt lucky to find a salesman who took pity on them.
“We were lucky we bought it from a fin that cut a section of the block and made money selling the land; they wanted the house to go to a young couple,” says Toni.
Abandon the runners
The couple began their journey seeking help from benches and brokers, Toni says they finally decided it was worth the extra effort to go there alone.
“I talked to three banks and two brokers that I didn’t find particularly useful or that weren’t the right ones,” he explained. “I decided to take the lead.”
“I did my own research to find the best bank and home loan for us,” he continued. “I looked at different government subsidies, compared South Australian stamp duty rates to other states; I even wrote a letter to the state treasurer asking for changes in stamp duty costs for first-time home buyers. SA to match other states (unsuccessfully). “
Eventually, his research paid off when he found a bank that not only helped guide the couple, but had the perfect loan and low interest rate specifically for first home buyers to meet their needs. needs.
“As stressful as it was, I learned a lot and since then I have advised many of our friends who wanted to enter the market,” he said.
However, finding the right home loan was just the beginning of the battle.
“The buying process was like having a full-time job, between out-of-market emails, countless phone calls, endless real estate trips, round-trip visits and negotiations,” he recalled.
“We started bidding just when the market was really starting to rise and we were in a competitive price range (between $ 400,000 and $ 550,000), in a competitive area.”
“We would go to auctions to see the bidding strategies, try to understand how the different agents in the area worked and really learn the language to take our best step forward so that the real estate agents would take us seriously. It can be very intimidating.”
‘Ready to give up’
After “countless” home inspections, a drastic change in expectations on their “non-negotiable list” and a search that expanded from five suburbs to more than 12, the couple was about to leave. .
“He got to a point where I was exhausted and he was willing to surrender,” Toni said. “At one point I stopped looking and just needed to take a break.”
“Interestingly that week, as usual on a Friday evening, I started scrolling through the real estate app and a house had just been added for an early opening the next day. Despite my attempt to pause, I decided attend: this was the house we bought “.
“I remember I went straight to the agent, looking him straight in the eye, and I said, ‘You’re going to sell me this house.’
After years of grueling travel, Toni and James discovered many things they wish they had known at the beginning of their journey, starting with how much money you really need to save for a deposit.
On top of that, they felt that doing their own research for the right bank and learning not to over-bid at auctions was key to their ultimate success.