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First Home Buyers Guide
If you’ve been considering buying your first home and have been working hard to save up your deposit, now could be the perfect time to take the plunge! We’ve put together this guide to help you consider your options and take your exciting first steps towards home ownership.
Although the world is a little crazy right now, it could definitely be in your favour to take advantage of the current state of the market and consider purchasing land (or a Dennis Family Homes Home and Land Package) for your first home.
Why is now the time for first home buyers?
Cheaper titled land
If you’ve already got your deposit saved, then now could be the perfect opportunity to purchase land and take advantage of some of the fantastic deals that are being offered. In the current economic climate, changes in market conditions, rising unemployment and tighter financing and investment conditions may result in landowners choosing to sell their land rather than build a new home. This means there are opportunities to potentially pick up vacant land at more affordable prices.
If you’ve been wanting to design and build your dream home from the ground up, then you may be able to take advantage of this situation and get a great deal!
Less investors to compete with
At the moment, given the supposed lack of confidence in the market and the recently introduced eviction moratorium, some investors have stepped back, meaning there is potentially less competition for first-home buyers in purchasing the property they want.
Typically, investors and first home buyers are looking to buy in similar areas, so with the current conditions causing investing to cool off, there could be a better chance for first home buyers to purchase land in the location they want at more affordable prices.
More government support
The Federal and State governments are implementing measures to encourage first home buyers to buy and build a new home at this time. Additional benefits, grants and rebates on top of the usual First Home Owners Grant Scheme announced or proposed include:
- Commencing 1 January 2020, the Federal Government released the First Home Loan Deposit Scheme. Under this Scheme, eligible first home buyers on lower and middle incomes may purchase a home with a deposit as low as 5%, with the government guaranteeing the remaining 15%. Practically, this means eligible first home buyers may no longer need to pay Lenders Mortgage Insurance when taking out their first home loan; and
Usually, first home buyers approved for the First Home Loan Deposit Scheme have 90 days to find a property that they wish to purchase. As the current economic climate has made this difficult, the National Housing Finance and Investment Corporation (the government body in charge of the scheme) has given participating lenders the ability to extend the timeframe for successful applicants by another 90 days to 180 days in total
- On 4 June 2020, the Federal Government also announced the Homebuilder Program under which eligible owner occupiers (not limited to first home owners) may receive a grant of $25,000 to build a new home or substantially renovate an existing home.
This means buyers can relax a little and have more freedom and time to choose their perfect plot of land (and decide on the right home builder to go with).
Government grants, benefits and assistance schemes are subject to strict eligibility requirements and may not be available to all buyers and may be subject to caps on the number of participants. You should carefully check your eligibility for the relevant scheme before making a decision to buy.
Step-by-step guide to your first home in Victoria
If you’ve already decided on a budget and have saved up the necessary deposit, here are the next steps to owning your own plot of land to build your dream home on.
1. Research your ideal location
Where your home will be is just as important as what your home will look like. You may also consider a home and land package to simplify the process and ensure you can focus on the really important details – like what kind of kitchen or bathroom you’d like, or how you’re going to landscape your garden!
When researching your ideal location, it’s important to know whether private sales are most common in your area or if you’ll have to bid at auction. This way, you can be prepared for either and know your rights and responsibilities under each buying method. If you’re purchasing greenfield land (undeveloped land), it will usually be sold privately through a developer.
2. Choose your service providers
There are a number of different service providers that you’ll need to work with when purchasing land or a home and land package, so you’ll need to start researching and making decisions on:
- The buyer’s agent, mortgage broker or financial advisor you’ll use
- Which loan to get, including the rates and lenders fees (if these are included)
- Which solicitor or conveyancer to use
- Which home builder to use if you’re buying titled land
3. Prepare your paperwork
Once you’ve chosen a plot of land or a home and land package, you’ll need to start getting your paperwork in order to ensure a successful sale. In general, this will include:
- Gathering the documentation required to apply for a home loan and apply for pre-approval. This will include proof of identity, payslips or a tax return to demonstrate your ability to pay your mortgage, savings account statements, and evidence of the deposit you’ve saved.
- Arranging a pre-approved loan if you’re planning to buy at auction. You cannot make the contract of sale subject to finance without the vendor’s agreement if you buy at auction.
- Making sure your deposit is available and then also understanding your cooling-off rights.
Your conveyancer or financial advisor will be able to give you advice on this, based on your individual circumstances, and help guide you through this complex process.
4. Buy your land
Offers are generally made in writing to the agent, just to eliminate any confusion around what the offer and conditions were.
This may vary depending on the land you are purchasing. As we’ve mentioned before in this article, most buyers purchasing greenfield land would generally go through direct sale, however if it’s vacant land in an existing neighbourhood or a home has been knocked down (for example), going through auction may still be a possibility. It’s important to be prepared for either to ensure you get the best result.
To finalise negotiations on your plot of land, you’ll need to read the contracts carefully and get your legal practitioner or conveyancer to check the section 32 vendor’s statement, the contract of sale and any other documentation.
- Arrange payment of the deposit on exchange of contracts.
- Negotiate a settlement period that suits both you and the current land owner.
- Gather all the required documentation.
After this, you’ll need to:
- Provide your deposit.
- Finalise the full home loan contract with your lender.
- Get mortgage insurance (if required).
- Consider income protection insurance to protect yourself if you get ill or lose your job and aren’t able to continue making your repayments.
- Give notice with your current landlord if you’re renting.
Everyone’s circumstances are different, so it’s always best to speak with your Financial Advisor or Conveyancer to ensure you’re getting the right information for your own circumstances.
5. Complete your settlement
Now, you’ll finally be ready to complete your settlement and start building your dream home in your perfect location!
In general, the final steps are:
- Paying stamp duty and land transfer fees
- Finalising your property settlement
- Signing your full home loan contract with your vendor
- Receiving the transferred title deeds and documents
Why build with Dennis Family Homes?
Here at Dennis Family Homes, we know that you never get a second chance at buying your first home – and that’s why we’re committed to making sure your experience is as simple, seamless and stress-free as possible. Our Sales Consultants are here to help you through the entire home building process, from start to finish!
As well as our fabulous architecturally-designed homes, suited to a range of block sizes and profiles, we have a collection of impressive house and land packages that make the process even simpler. With so many options to choose from, we’re bound to have the right one for you.
Call 1800 336 647 to discuss your home building dreams today, or visit us at one of our Display Homes – yes, we’re open!