Buying advice

Make a list of:

• your preferred areas
• essential features — the ones you will not compromise on
• your wish list of non-essential features.

Knowing what you want will help you avoid buying a property that does not meet your needs. It also narrows the list of properties you look at through open homes or private appointments, which is the difference between a focused month of searching and an exhausting year of it.

Carefully assess your financial situation and your desired standard of living when deciding how much you can afford to borrow and repay. Take into account:

• your circumstances and existing financial commitments
• any future plans — starting a family, for example, could mean a drop in income
• other possible changes, such as interest rate rises or a period out of work.

You can put rough numbers on the repayment side with our repayment and duty calculators.

Consider the costs of buying a property, including:

• legal and conveyancing fees
• loan establishment fees
• land transfer duty (still widely called stamp duty) — see the State Revenue Office
• GST, where it applies — it generally does not on established residential property, but it can on new homes and on commercial property. The ATO sets out when
• building and pest inspection fees
• moving costs.

Also consider the ongoing costs of owning the property:

• council rates
• building and contents insurance
• the Emergency Services and Volunteers Fund levy, which is collected with your council rates
• owners corporation fees, if the property has one
• land tax, if the property is not your home.

Do not overlook a concession you are entitled to — several of them change the duty figure substantially, and most buyers qualify for at least one. They include:

• the first home owner grant, for buyers of new homes
• first home buyer duty exemptions and concessions
• the principal place of residence concession
• off-the-plan concessions
• pensioner and concession card exemptions.

Eligibility for each has its own test. The State Revenue Office publishes the current rules and is the authority — no calculator, ours included, can tell you which of these you qualify for.

When arranging a home loan:

• you do not have to take the full amount a lender offers. Work out the amount you need and feel comfortable borrowing, which is often less
• use a repayment calculator to see how the amount, the term and the repayment frequency change how long you carry the debt
• ask directly about fees and charges
• read the fine print on contracts, brochures and printed material
• understand how any broker you use is paid, and by whom.

It is far better to meet your preferred lender and get pre-approval before making an offer. An offer you cannot fund is worse than no offer at all, and in a competitive market a pre-approved buyer is the one a vendor takes seriously.

The Federal Government's MoneySmart has independent budget tools and home loan guidance, and sells nothing.

Learn as much as you can about the buying and selling process and about the services offered by estate agents, legal practitioners, conveyancers and lenders. Shop around and compare.

Researching what a property is worth

• attend auctions and open homes in your preferred areas — several, before you are ready to buy
• watch what comparable properties actually sell for, not what they were advertised at
• speak with local agents about recent results
• read the sold results for the suburbs you are looking at — ours are on recently sold, and each suburb profile carries the local median.

Consumer Affairs Victoria publishes a due diligence checklist that every Victorian buyer should read before signing a contract. It covers the things that are expensive to discover afterwards: planning overlays, easements, flood and bushfire risk, building permits, and whether the property is connected to services you assume it is.

In the Dandenong Ranges and the Yarra Valley the bushfire and overlay questions are not theoretical — bushfire management overlays, unsewered lots and unsealed-road access are ordinary features of properties here. Ask about them early.

CAV's buying and selling property guidance is the independent reference behind much of the advice on this page.