It can be daunting as a first home buyer who’s decided to enter the market but is overwhelmed by the sheer numbers of keen competitors they see at open homes. Some of Auckland’s busiest agents selling to first home buyers were happy to share their top tips with Trade Me.
There are a few “don’ts” in the first instance. One agent implores: “Stop looking for the Instagram house and start being realistic.”
Chances are, you’re going to have to do some compromising along the way on things like location, the cosmetic look and possibly construction of the home, and the land it comes with, so start preparing yourself for that now.
Remember this isn’t your dream home, it’s your first home..
1. Look for the ugly ducklings
Harcourts’ Abbey Davis suggests looking for the property that’s not getting all the attention. You’ll have seen when a beautifully presented home with the wow factor comes on everyone goes a bit crazy and the competition is extremely hot. This is not the property for you.
“Ugly ducklings offer more opportunities,” says Ms Davis. Look for properties that aren’t well presented, check out how many views they’ve had on Trade Me (go to the very bottom of the listing), and take a close look at the homes that haven’t had as many views as the high profile ones.
“Buy something that others aren’t going for and make it beautiful,” she says.
Half the time, the property may not be getting the views because of presentation. It could just be a matter of ripping out old carpet and polishing the floorboards, she says. “It’s about putting your stamp on it.”
Buying your first home is just about getting in, it’s not about getting the perfect house. If it ticks half the boxes, you’re doing well, she says.
“I still don’t live in my dream house,” says Ms Davis.
Ray White agent, Jane Horgan, just helped her daughter to buy her first home and they ended up compromising and looking at plaster homes, which are less appealing to buyers. “We looked for something that there was less competition on,” she says. It wasn’t going to auction either which they also liked.
They ended up buying a four bedroom home which will give them lots of options if they want flatmates.
Buy something that may be off-putting to people, advises the agent.
“It might be the layout. It doesn’t need to be your dream home, it’s your first home and it could be your first rental property.”
2. Have a great team supporting you
One of the first things to do as a new buyer is getting a really good team behind you, says Anne Duncan agent, Emma Duncan, who’s marketing ‘a fall in love with’ cottage in a great Mt Albert street.
4 Fowler Avenue, Mount Albert, Auckland
This means finding a good agent to work with who can help you with pricing and information on recent sales. They can also give you tips for how to compete in a multiple offer situation, she says.
Working with a recommended mortgage adviser who can help you with your loan pre-approval is vital to listing agents taking you seriously. A lot of those supposedly serious buyers you see cluttering up open homes don’t necessarily have their finance all organised.
Also, listen to your family, says Bayleys agent, Trent Quinton, particularly if they’re helping you buy. “They have experience in the big bad world of property,” he says. And another key member of your team will be your solicitor who you’ll be asking to check LIM reports for you as well as other property information, and of course preparing your offers.
Another quick tip, get on with your due diligence as fast as you can. Send the building inspection to the solicitor as quickly as possible if you find a good possibility, says Unlimited Potential (UP) agent Hayley Kirk-Smith.
3. Be as active in the market as you can be
With this support behind you, go out and try to be as active in the market as you can. This means going to open homes and going to auctions even if you’re not participating, says Ms Duncan. The more you do this, the easier it’ll be when it’s your turn.
“I welcome people asking me questions all the time if they see something they like. Get out there and start meeting people,” adds Ms Duncan.
4. Look in a number of areas
Bayleys’ Trent Quinton who’s marketing a tempting property in Eden Terrace, urges you to be open to living in a number of different areas. By getting to know a number of different parts of your city, they will probably start to appeal more. Do your homework on the schools, in all these areas, if upgrades are planned on train lines, learn about anything that might add value to a suburb’s appeal in the years ahead.
22/8 Basque Road, Eden Terrace, Auckland
5. Get to know the listing agent of your chosen home
Your relationship with the listing agent of your chosen home is very important. You want them to take you seriously and for them to think of you if the deal falls through with another buyer.
Be upfront that you’re interested, there’s no reason to be coy, says Ray White’s Todd Sherley, currently marketing a first buyer’s dream home in Remuera. Call up after an open home and ask more questions.
13A Rotomahana Terrace, Remuera, Auckland
“If they’re showing they’re keen then we know that they’re interested and we’ll send out information. We want to help them because that fast tracks the sale, says Mr Sherley.
“The best thing is for them to say they are all pre-approved, they’re ready to bid at auction, they’ve missed out on two or three, it means they’re ready to go. Those are the kind of people we are close with,” says the Remuera agent
Ms Kirk-Smith agrees. “I think the people who have missed out are the ones that really understand the market, “says the Mt Eden agent. They’ve been too timid at an auction perhaps and they are more determined to do better next time.
Once an agent has gotten to know you well, they may let you in early on properties coming to the market or even homes that will never come to the market properly, says Ms Duncan.
6. Be prepared to feel like you’ve paid too much
You have to know that you’ll pay more than you’re comfortable with, but if you want a house that will have good resale prospects, you should be absolutely pushing to pay as much as you possibly can, says Ms Kirk-Smith. She’s currently marketing a Mt Eden home appealing to buyers who are in the market for the first time by themselves.
26 Springwood Place, Mount Eden, Auckland
7. What to consider when putting your offer together
If you’re going into a multiple offer situation and your due diligence shows there aren’t any big repairs to do, don’t factor in what you plan to spend on the home in the coming years, to your offer, warns the UP agent.
“You may want to update the bathroom and so on but you can’t do that unless you own it,” she says.
Factoring in the cost of making things to your own taste will not work in this scenario.
“You have to spend or you will miss out in this market,” says Ms Kirk-Smith.
“All I know is that once you buy a house, suddenly the mortgage doesn’t feel as bad a year in.”
Meanwhile if you’re bidding at an auction, Ms Duncan recommends that before you go, calculate how much more an aggressive offer will cost you a week in repayments. Doing the maths on that before will give you a real idea of what you’re bidding on and the limit you can go to. You don’t want to be doing these calculations during the auction, she says.
8. Start a fighting fund
When she’s house hunting, Harcourts’ Abbey Davis always has what she calls a fighting fund, a little bit of extra money tucked away somewhere that might win her the home she has set her heart on. This will come in handy if you’re fighting to the death at auction, for instance.
“I’ve always paid over and above what I was intending but I’ve never regretted it,” she says.
9. Think about the future
And while you may not want to live in this house for the rest of your life, bear in mind that this may turn into an investment property for you, and provide the equity to buy your next home, says Mr Quinton. So bear that in mind when you’re choosing a property for your first home.
Always try and keep hold of property if possible, he recommends.