June 5, 2023 • 29 mins
Buying a home is a huge commitment, and while you can't foresee every challenge, there are definitely things you can avoid…if you're prepared. Today, Victoria Devine joins Jessica Ricci to share the top five mistakes homebuyers make and how you can avoid them.
Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.
The advice shared on The Property Playbook is general in nature and does not consider your individual circumstances. The property Playbook exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and The Property Playbook are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 451289.
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Episode Transcript
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Speaker 1 (00:00):
The Property Playbook would like to acknowledge the traditional custodians
of the lands of where this podcast is recorded. There
were wondry people of the cooler nations acknowledging the culture,
the history, and the connection to the lands of what
we call home. Let's get into it.
Speaker 2 (00:27):
Hello, and welcome back to The Property Playbook, the podcast
where we take you from A to V of all
things property. My name is Jessica Ricky, and hopefully one
day I will own my first home, but until then
I'm speaking to all kinds of experts along the way
to help me get there. Today, I have maybe my
favorite expert, Victoria Divine.
Speaker 3 (00:46):
Hello. I feel like you are biased because I have
you on payroll, which is fine. I would like you
to continue to shower me in all of the compliments.
I'm excited, though, because I feel like today's episode is
going to be like us is the word sneak you're
using punchy? Yeah, it's gonna be real punchy, because what
have we got coming up?
Speaker 2 (01:04):
We have the top five mistakes that first home buyers make,
which seems like something that you would think I would
know about because I see next to Victoria all the
time and sometimes I make.
Speaker 3 (01:14):
A lot of mistakes and then you do too. Is
that what you were going to say?
Speaker 2 (01:17):
No, I say things and you go, jess what are
you doing? And I was like, Okay, maybe that should
be a podcast episode.
Speaker 3 (01:22):
Well, making mistakes is part of human nature, right Like,
every single person makes mistakes. It's how we learn, it's
how we grow. I don't think it's bad to make mistakes,
but the property playbook literally exists, so I can teach you,
and we can teach you as much as we possibly can.
So the amount of mistakes you guys are making a
next to none, right Like, if I've made them before,
(01:42):
learn from me. Use me as your guinea pig. And
I feel like, given the property market is literally ever changing,
one of the best ways to get ahead is to
always be I guess, thumb on the on the pulse
or finger on the pulse? Is that the term? Anyway?
I feel like that is why we want to talk
about the five most common that you and I are.
I see, especially in our business right because we've got
Zella Money, which is actually a mortgage breaking business, so
(02:04):
we get people into properties literally every single day of
the week. So I feel like I'm the right person
to be having this conversation because you know who's the
queen of the group chat about talking about what's going
on you?
Speaker 2 (02:16):
It's me, Fan goes off. Who's it going to be? Victoria?
But when I call her does she pick up? No?
Speaker 3 (02:20):
Why would I do that? You probably just want to
talk about what mac is order you want.
Speaker 2 (02:23):
It's true love, a good nuggy. Let's start at a start.
What is the first and maybe the biggest mistake that
you see people making.
Speaker 3 (02:30):
Ah, so this one is going to come as absolutely
no surprise to anyone, But it's not understanding your own
financial position. So it is crazy how many people just
assume that because they have a deposit they are ready
to buy, or they assume that because mum and dad
have said, oh go Garren tore, or you actually feel ready,
(02:50):
they assume that's enough. Yeah, but you need to understand
your financial position so so deeply, because if you don't,
you're going to find yourself in a little bit of
a pickle. And this is where the thing in the
entire world to do is actually talk to a mortgage broker.
A mortgage broker is going to grab your hand and
make sure that you have every single tool and resource
in your junk kit so that you can actually thrive.
(03:11):
And it's one of those things where a lot of
us just make grand assumptions about whether we are or
aren't financially ready. And do you know how many people
that we talk to and I think that the Shees
on the money community are really good at this, and
the property blaybook community as well, are reaching out before
they're ready, because do you know how many people we
talk to that go, oh, like a similar position to
do you, Jess, where you go, Oh, I might be ready,
(03:31):
but I might be ready in like six or twelve months.
And we go, well, actually, have you seen X, Y
or Z, because you can get into this scheme or
you can actually put yourself in this position, or because
of the career you have, Jess, we can actually get
your five percent loan. And it's just so good to
be able to talk to someone who knows your position.
But also, if you are in a position where you
(03:52):
don't know your financial circumstances to the nth degree, you
might end up biting off more than you can chew.
Speaker 2 (03:58):
Yeah, I was gonna say as well, I feel like
it's almost helpful to have that really super thorough understanding
because even once you've purchased, we've seen that things can change.
Over the last twelve months.
Speaker 3 (04:09):
Why we have gone back to basics and been like,
all right, scrap what we did, because at the end
of the day, the entire markets changed, and you guys
deserve a complete upgrade. You deserve everything that is going
on right here and right now. And at the end
of the day. It's not as straightforward as going, Okay, Jess,
you've got a fifty thousand dollars deposit. You want a
five hundred thousand dollars alone. That equals a five hundred
and fifty thousand dollars property. There are so many other
(04:31):
costs that you really need to consider, from you know,
property inspections to lm I solicitors, fees, stamp duty, you know,
even moving costs that you need to take into consideration.
And a good broker is going to help you with that.
But bigger than that, bigger than the property conversation. You
might go to the mortgage broker right and sit down
with them and they might go, oh, Jess, how much
(04:51):
do you want to borrow? Like what's the plan? You know, well,
how much can I borrow? And the broker might go, oh, Jess,
you can have up to seven hundred grand. You're like,
that's great. I love that. And you look at your
budget and you go, that's a bit of a squeeze,
but I want to make it happen. And so you
go through the process and you get that done. Right,
What if we haven't taken into consideration your other life goals.
What if the plan that you had was to get
(05:14):
married twelve months after moving in, and maybe you wanted
a baby, What does your financial circumstances look like, and
what are your financial goals looking like? Because I know
if you want to have a baby, that's a big
cost as well. That's an entirely other dependent person that
is going to be looking to you to look after them.
How's the mortgage going to get Paidess? How's that going
(05:35):
to work? So it's not just understanding just how many
dollars do you have in your bank account. It's understanding
your financial position and all of your other financial goals
that might come into play, because the worst thing is
going buying that seven hundred thousand dollar property because today
you can afford it, and in the future you can't.
Because your goals just changed and it might be worth going, Oh, well, Jess,
(05:55):
let's have a little bit of a chat. Your broker
is going to be really good at this conversation, I promise.
What does the next twelve to twenty four months look like? Jess?
You might say, oh, well, I'm going to do this, this,
and this. Knowing Jess her plan would be travel, not
a baby, it would be travel, And they might go, well, Jess,
do you realize how much of an impact is morre
you're just going to have on you. Maybe we worrow
six fifty or maybe we borrow six hundred and look
(06:17):
in a different kind of price bracket so that your
entire situation is taken into consideration and you can still
have that lifestyle that you want to deserve.
Speaker 2 (06:24):
Yeah, looking at things really holistically, I think is something
that we've had a lot of conversations about and about
the impact that the purchase has on you after you
make that purchase. And I feel like that kind of
leads into mistake number two that I definitely made, which
is looking at properties that are outside of your budget.
Speaker 3 (06:41):
You still do this all the time, but it makes
me sad. I'm throwing you straight under the bus. You
always do it, and it makes sense because it's so
aspirational and it's so fun. But if you have a budget,
let's say of five hundred thousand dollars, that's what we're
looking for. Yeah, I don't want you looking at properties
that are outside your budget. Do you know how many
times I have this conversation with Kate all the time.
(07:01):
We're like, you know, let's pretend it's just it's not
just doesn't do this, but Jess might send me a
link to a property that she's looking at. And when
you work with a broker often you do have that
back and forward relationship. It's not just you go to
get your loan right, Jess, Like you talk to Kate
all the time. You might send her a link to
a property and be like, hey, I'm looking at this one.
What would it look like if I lent XYZ? Like,
(07:22):
there's a back and forward relationship there. So the amount
of times where get sent properties from clients who have
a budget of five hundred thousand dollars and the property
is five hundred and fifty, you're like, hey, like, I
know there's a five on the start of that, but
you don't have five fifty. Like we can't look at
this property and they're like, oh, but maybe I might
just maybe I'll go to the inspection and see like
(07:43):
it might get passed in. It's twenty twenty three. It's
not going to get passed in and go for fifty
thousand dollars less than what it's advertised as unless there's
a significant issue, in which case it's probably going to
cost you more than fifty thousand dollars to fix. YEA,
So I think it's worth really just staying in your
lane when it comes to purchasing properties. Obviously, it's relatively
(08:05):
hard to on real estate dot com, dot a U
in like domain to actually filter byprice because some of them,
as you would know jest, just don't have the price
on them, and you actually have to click into the
statement of information and you have to see what's going on.
But where possible look inside your budget, because it could
be super disenheartening to actually look at what the budget
(08:25):
is and then be going out of it because you
just you're never going to find the property of your
dreams if you keep aspiring to something more but you
don't have that more to play with, right.
Speaker 2 (08:34):
Yeah, that's like when I looked at display homes, and
I went around and I thought I was doing the
right thing by just seeing display homes on mass and
I ended up finding that the homes that were within
my price range seemed really disappointing after looking at the
homes that we're out, and I didn't going into look
at these homes. I didn't really look into it too deeply.
I didn't go, oh, these displays are within my budget
(08:55):
and these aren't.
Speaker 3 (08:56):
I know, you just go to the long line of
ye that they had in your door to door to
do it. It's a good way of working out what
type of wardrobe you want. Oh, this feature is so cool.
I get caught up on all of the small details
when I'm in that circumstan and it's exciting to look
like a way to spend a week. Hend I did
it either when you're not buying, like, I'll come with you.
Let me know. I can I be that friend.
Speaker 2 (09:14):
Absolutely you can. But I feel like I really I
had that experience and I would see things I'd be like,
oh my god, this is beautiful. This is exactly what
I want, and it's two hundred thousand dollars more than
I can afford. And then by the time I got
to what I could afford.
Speaker 3 (09:25):
It seems to work, doesn't.
Speaker 2 (09:26):
Yeah, exactly, even though it wasn't. It was totally fine,
but because I was comparing it to something way above
my range, it just kind of put a little damp
and on it.
Speaker 3 (09:34):
Which is that The best thing that you can actually
do when you're on your home buying journey is sit
down with your partner and go onto real estate dot
Com or domain or whatever platform you're using to look
for property and click on the sold tab and then
click your budget so that you can see if your
budget's five hundred grand, pop that in as the MAXI
amount of sold, and see what in the area you're
(09:55):
looking for actually sold for the budget that you have,
and sit down with your partner, go through it and go, oh, yes,
would you buy this house five hundred grand? You might
go no, it's not north facing. Okay, well maybe that's
one of our non negotiables. And we can kind of
create a list of what our dream property within our
actual budget means. Because it's so nice to go through
what's for current sale because in our minds we're like,
(10:17):
we could have that one, we could have it. But
if we look at what's sold. Pragmatically, I'm not saying, hey, Jess,
would you buy this property? I'm saying, what are the
features and benefits of this property that are within your
budget that you would accept, and what compromises do we
actually need to make, because that will put you more
in a realistic mind of what you can and can't afford,
instead of consistently looking on to main We're all we
(10:40):
are all guilty of it. Right, the amount of times
when I was looking for property I'd put in my
budget a little bit higher. Don't put the buffer in
my fans. It just makes you sad and frustrated, and
it puts you in a position where you're not in
control anymore. So if you do that with maybe fifteen
or twenty properties in your dream look, you'll very quickly
(11:01):
work out what your potential actual home will look like
in terms of you know, bedrooms and bathrooms, and you
know access to public transport, and what kind of compromises
people are making for those features. Right, So you might go, oh, V,
I really wanted a three bedroom house in this location
with good access to public transport and X, Y and z.
(11:22):
But you might find that within that budget you actually
have to settle for a two bedroom house, but you
have all the other features and benefits that you said
you wanted. Yeah, so it's more about how do we
make it super realistic instead of getting ahead of ourselves,
which I'm so good at.
Speaker 2 (11:37):
Yeah, Like, which of those things do we prioritize and
which do we kind of be one hundred percent? Okay, well,
let's head to a really quick break, and when we
come back, I want to run through the next three
top mistakes that we see people making. Don't go anywhere, guys,
Welcome back everybody. Today I'm chatting with finance Queen Victoria Divine.
We're talking all about the top five mistakes that we
see first home buyers making. We've done two, We've got
(12:00):
three to go, Victoria, what is next on your list?
Speaker 3 (12:02):
All right? So the next on our list is when
buyers do not factor in additional costs. We touched on
this before when I said at the start of the episode,
oh my gosh, there's so many more costs to take
into consideration. But let's go through what I see to
be the top costs that you need to be budgeting for.
I'm the biggest fan of mortgage brokers, right like I
keep talking about them. But your mortgage broker will do
(12:25):
this for you if you don't want to do it yourself,
which is absolutely fantastic. They're also going to be far
more accurate than you can be down to like basically
the dollar, which is a dream. So there's obviously no
way around getting your deposit. Your deposit is so hard
to get, Jess. I know how hard you have been saving,
the compromises you've been making, but that's not where it ends.
I am so sorry. No, once you've saved enough, you
(12:48):
then hit with a whole heap of other upfront costs
and here are, in really short form ten that you
need to factor in. So first things first, depending on
where you are in Australia, whether you're a first home
buyer or a second home buyer, stamp duty, outside of
the deposit, this is going to be your second biggest
upfront cost. Stamp duty is going to you know, vary
(13:09):
depending on state or territory, but it tends to be
a fair chunk of your deposit. The next is a
transfer fee. So this is a fee that is levied
by the government to cover the cost of transferring the title.
This is not stamp duty sounds like stamp duty, but
it's actually the transfer fee. And again there's a very
big disparity between different states and territories, so please look
(13:33):
at what happens in your state. So, for instance, the
transfer fee in the Northern Territory it's one hundred and
thirty seven bucks. That's all right, so that's easy to
budget for, right, But if we go down to South Australia,
it's twenty nine hundred and one dollars. Yes, slight different,
So when I say discrepancy, I mean big discrepancy to
be South Australian exactly. The next is your mortgage registration fee.
(13:55):
So that's a fee that all states and territories have,
but then it depends on where you are as to
what it costs. So for example, in your South Wales
it's one hundred and seven bucks, in the Northern Territory
it's one hundred and eighty nine dollars. So like, not
the biggest difference, especially in comparison to our mortgage registration fee,
but definitely worth taking into consideration. If you don't have
(14:16):
a broker, you need to make sure that you're aware
that some mortgages actually have application fees on them. So
that could be a once off fee for them to
set it all up for you and do essentially all
the admin for you because it is a lot of work.
Most of the time when you work with a mortgage broker,
this is waved, and it's waved because basically the bank
knows that that mortgage broker knows what they're doing in
(14:36):
the bank's not having to do extra work. Another one
which we've spoken about on the podcast before is LMI
or lenders mortgage insurance. Home Buyers with a smaller deposit
are very likely to be in for paying LMI, so
this only gets put into force if you have less
than a twenty percent deposit and you don't actually meet
the criteria for any schemes or exemptions. The next get
(15:00):
I feel like I'm really in them all off. But
it's so yes inspection fees, So this is not just
to go and have a look at the property. We
need to make sure that we're getting our building in
pest inspections. You might be tempted to skip a pest infection,
but to make sure that you don't please get a
building in pest inspection. They can range anywhere between two
hundred and i'd say, five hundred dollars to get it done.
(15:22):
But if you had termites, Yes, right, you bought a property,
you skipped the pest inspection. Naughty noughty seven to ten
thousand dollars to get rid of the termites.
Speaker 2 (15:29):
Oh, it's worth spending the fun.
Speaker 3 (15:32):
Like that's a lot of money, and like you can't
put that on the loan. Yeah, you've got to cough
that up, hold hard cash because you're not renting anymore.
Can't call a landlord. Ah sucks, all right, another deep breath. Yes,
we have home building and contents insurance, so this is
not actually one of those things that is you know, oh,
maybe you get it, maybe you don't. To get a mortgage,
(15:52):
you have to have that insurance otherwise the company isn't
going to let you have it. Really, Yes, Actually, to
get a mortgage, the bank wants you to prove that
you've ensured the property so that they're in a really cushy,
nice position.
Speaker 2 (16:04):
Yeah, protect their investments, so to speak.
Speaker 3 (16:06):
Yeah, so you have to get a policy. And when
I have gotten my mortgages, I've actually had to send
a copy of the policy to the bank for the
funds to be released.
Speaker 2 (16:15):
Wow.
Speaker 3 (16:15):
Wow, So I mean, you could choose not to continue
that later down the track. I didn't say that, but
you need to factor that in. If you have a mortgage,
it's compulsory. Premiums are again get a various state by state,
depending on where you live and the type of property
that you're trying to ensure. But I would budget around
one thousand dollars a year for home insurance on about
a four hundred thousand dollar home, and around like five
(16:38):
hundred bucks each and every single year for contents is
where I'd see the averages falling. Now there's two more
Oh my god, we're not done. Sit down, Sit down.
There's one more moving charges. So we covered that. So
these can vary massively depending on I guess what you
have and what you move. I remember when I moved
out of my first sharehouse, everything I owned fit in
my car.
Speaker 2 (16:58):
Oh my god, I had the exact same isser.
Speaker 3 (17:00):
I was like, I don't own anything. Yeah, I think
my dad came up with his bigger car to get
the mattress for my double bed to move that queen behavior,
Yeah exactly. That was it. Moving my house that I
lived in with my partner for seven years.
Speaker 2 (17:15):
Very expensive.
Speaker 3 (17:15):
It was like nearly two grand or something ridiculous to
move from our rental because then we owned everything in
the rental because it was just my husband and I.
Yea into the property that we're buying. I was like,
oh my gosh, like everything is just adding up that
cost us like two grand and we were in the
same suburb.
Speaker 2 (17:30):
Jests, it's more than just your cups and play.
Speaker 3 (17:32):
It was wrought. And that included me trying to be
frugal and moving a lot of things in my car
before moving day because I didn't want them to break,
or I just wanted to drop them off, or I
was super excited to move in. So I would be
budgeting anywhere depending on how much stuff you have, between
like five hundred bucks all the way up to thirty
five hundred dollars for that. So that and I would
(17:55):
make sure that if you're going to do a removalist,
shop around a bit, get a few quotes, and don't
leave it to the last minute, because they know if
you've left it to the last minute, and they'll charge
your premium.
Speaker 2 (18:04):
Ah okay, great tip there.
Speaker 3 (18:06):
Now we have the last one. I'm ready for this,
as probably you are too. It's just connecting your gas,
electricity and phone and internet and.
Speaker 2 (18:15):
All of that, and turning off your old one as well. Yes,
that happened when we moved. I didn't expect a fee
to turn off our old electricity. Yes, are you not
just flicking a switch?
Speaker 3 (18:22):
It's usually like one hundred bucks to have it turned off. Yeah,
which is wild. But making sure that the new tenants
in your old house don't end up using your stuff
and you get builled for it very important to do.
But then also just making sure that you negotiate with
your vendor when you buy your house so that the
power can stay on while you're moving in and you're
not actually hit with any reconnecting fees could be a
(18:44):
good idea. So talk to the vendor, talk to your
real estate agent and be like, hey, can we have
it left on? Because also, there's nothing worse than having
to wait a few days for your power to go
on when you've just moved in.
Speaker 2 (18:55):
Oh, that happened to me. I moved in the middle
of summer. It was like a forty day no air con,
no fan, no nothing. It sucked, all right. We spoke
before about looking at properties and envisioning yourself in them.
I suppose looking at those really nice ones, feeling really
good about them, mistake num before that, we see a
(19:16):
lot of people making is becoming too emotionally invested in properties,
which is really hard to avoid. Can I just.
Speaker 3 (19:23):
Say, it's really hard, really hard, It's so hard. I
have some pragmatic advice, but also this is as I say,
not as I do, because I feel in love with
our house. Yeah, like, oh my gosh, I saw it
and I was like, Steve, if we don't get this,
I'm going to fall into depression.
Speaker 2 (19:41):
But it's the end.
Speaker 3 (19:42):
I am now depression Anyway. I get it because the
amount of people we've spoken to, Jess who have been
through this circumstance where they've been to like ten twenty
auctions and lost, Like, it's so hard, but it's so
important to remain not emotionally attached until we've signed a contract.
And when I say until we've signed a contract, even
when the offer's in, we're not celebrating yet, haven't done
(20:04):
your building in person inspection, not celebrating yet. What if
something comes up and you have to leave that relationship
between you and your house. I think it's really important
to make sure that when a lot of money is
at stake. We are making sure that we have really
clear feelings. We're not having conflicting feelings. It's not you
buying a property and my partner not really being that
(20:25):
into it. It's about making sure that you are absolutely
on it when we're purchasing, because honestly, too many times
people are listening to their heart about a property and
then finding themselves in a little bit of a pickle.
So even if the property you walk in and you're
just like, I know, I'm going to bring my babies
home to this house, we're not just skipping all of
(20:47):
the important steps. We're not going, oh, just get it done,
get it done, and we're skipping all of the important
things like building and best and checking the suburb and
the location with your broker to make sure it will
be serviced, and checking the value of the property. The
property value isn't as important when it goes to auction
because obviously in auctions a public process, and if it
goes for five hundred thousand dollars, there was competition in
(21:08):
that marketplace, and the bank's going to go well, if
it went for five hundred dollars, that's what it's worth.
But if you're privately negotiating and they say, well, just
so want five point fifty. Go back to your broker
and say, hey, before I agree to this five point fifty,
if you can afford it, obviously, can you just check
with the bank what the bank valuation on that property is.
Because we have had it before where literally a buyas
(21:31):
advocate who wasn't that experienced in buying and selling properties
for clients, we didn't have anything to do with them,
don't worry, had said to a client, oh my gosh,
it's definitely worth that beautiful home, and then they had
to cough up an extra fifty thousand dollars that they
had to find from friends and family because the bank
wouldn't give them that extra fifty grand because it wasn't
all the property was worth on paper.
Speaker 2 (21:52):
Nightmare situation. And I spoke earlier in the season to
a sales agent Monique for that, and we were talking
about preparing your property for sale, which is right when
you're on the other side of things. But in that
episode we spoke about all of the little tricks that people,
sales agents vendors use to make that home feel inviting,
to make you have that emotional attachment.
Speaker 3 (22:12):
Yeah, they're trying their hardest.
Speaker 2 (22:13):
On the other side, know that they're working really hard
to get you invested in that property. And our job
as potential buyers is to be like no blinkers on
not looking, not thinking, not smelling, just being neutral, which
is hard.
Speaker 3 (22:26):
Also, also, if you can't be neutral, have the pessimistic
view that I have, which is assume that every property
is trying to gaslight you.
Speaker 2 (22:35):
Is that like every approach with menas It's.
Speaker 3 (22:38):
How I got married. Turns out Steve's not a gas lighter,
so I married him. But assume that every single property
is trying to gaslight you. Why do I love this kitchen?
It feels too good to be true. Oh, you're right,
the lighting's pretty good in here. Oh they have recently
baked cookies. It does feel very homely. Have a think
about all those little things. I know that's very negative,
(22:58):
but Jess, I'm not the type of person and that
just goes in. It's like, oh my gosh, I'm just gonna,
you know, be real neutral on this. No, I need
to find the floor. Yeah, I need to work it out.
Assume that the property is gas lighting you, because I
promise you I'm sorry to all of my real estate
agent friends. I promise you they're trying.
Speaker 2 (23:14):
Yeah, there's something in there that they're trying. They're trying. You.
Speaker 3 (23:16):
You get fresh flowers, you make the house smell like cookies.
You change all the beds to double beds instead of
queen or king beds so the bedrooms look bigger. Yes,
you put the bed bases closer to the ground so
that the rooms look taller. They're on it. There's lots
of little sharing the properties trying to gaslight you.
Speaker 2 (23:33):
That is genius. All right. One last little mistake that
we see people making which kind of rolls off the
back of not getting emotionally attached, and that is people
who purchase properties without doing their due deligence.
Speaker 3 (23:46):
Yes, it's really really hard. So first things first, if
you go to the consumer dot viktorc gov dot AU website,
a mouthful, but you will understand it, they actually have
a due diligence checklist GUS and you know it's from
Consumer uamer Affairs, so you know that it's not like
a real estate agent being like, hey, only look this way. Yeah,
so that checklist is going to go through a whole
(24:07):
heap of things that you need to look into before
making a property decision. We obviously are going to have
our own version, which is absolutely more comprehensive. This is
just like the bare minimum, but this is where you
would start. So making sure if you're moving into inner city,
what actually high density living looks like. Are you going
to be able to get a parking permit in the city?
(24:27):
Are you actually going to be able to park your car?
You might be fine with on street parking because in
your head you've gone, oh, yes, it's a two bedroom,
one bathroom property, but it doesn't have a car spot.
You don't worry. I love the property, Yeah, I'll just
park on street happy to nightmare? When was your building built?
Speaker 1 (24:41):
Yeah?
Speaker 3 (24:42):
Are you actually going to get that parking permit? Is
the property subject to an owner's corporation fee?
Speaker 1 (24:47):
Also?
Speaker 2 (24:47):
Nightmare?
Speaker 3 (24:48):
How much is that? Are their growth areas? Are you
moving into an area where there's going to be a
whole heap of infrastructure contribution going on? Are you happy
to live in an area where there's a whole heap
of building going on around you planned that could actually
be really good for property growth. So it goes both ways.
Rural properties, you're moving to the country, what type of
(25:08):
bush fire risk is there, What type of flood risk
is there?
Speaker 2 (25:11):
Not even just rural. I saw that property in it
somewhere in the suburbs, and I was challenged Kate, and
she's like, just so you know, there's a flood yea
something in place, And I was like, ah, well, I'm
looking in suburbia exactly.
Speaker 3 (25:22):
But like when I moved into our property, we actually
have like a caveat over the property that says, oh,
you're on this type of area. Our insurance is more
expensive because of it. Yeah, please do your due diligence. Again,
talking to a good solicitor is going to help you
through this. And that is why we always say, when
putting in an offer on a property that's not going
to auction, make sure it is subject to building and
(25:45):
pest inspections and finance to give yourself the ultimate get
out of jail free clause, because I don't want you
putting your deposit down and then your solicitor coming back
and being like, hey, did you realise this a caveat
over the property and you're not actually allowed to build
something taller than one story.
Speaker 2 (26:00):
Yeah, so good luck building the extension that you had planned.
Speaker 3 (26:02):
On Yeah, Like, good luck making the most of that
three hundred square meter block. Like, there's so much that
could happen, So please do your due diligence. Make sure
that you know if there are any building permits or
buyers rights or things that you need to understand, you do.
It's all going to be in the contract, but it
doesn't mean that you're necessarily able to interpret it. I
would assume, Jess, I'm a relatively intelligent person, or I've
(26:24):
grown up to believe i am, because my mum has
always pumped me up. Right, I didn't understand a lot
of what was in my property contract, and that's okay
because they had the right team behind me. Yeah, and
they told me and they said, this is what this means,
Like you're fine here and here just be aware of
x am. I happy with that, yeap, no worries. Let's
move forward with this. So please do your due diligence
and make sure that you understand absolutely everything that is
(26:47):
involved in purchasing that particular property, because even if you're
looking at next door, it might be different.
Speaker 2 (26:53):
Yeah. We've spoken so much I think on the due
diligence thing, and I feel like it's one of those
pieces where no matter how many times we say it,
it's not enough, it is the most important thing that
you can do to protect yourself and your investment.
Speaker 3 (27:04):
One hundred percent. Because all of those five things that
we've talked about today, they all kind of like sandwich
in together, So like, not understanding your financial position then
means that you might be looking at properties that are
outside of your budget, which means you haven't factored in
any additional costs because you didn't know your financial position,
and then you became emotionally attached to a property, so
you just did the wrong thing. And how many people
have done that?
Speaker 2 (27:25):
Yeah, it's like a little flow chart if that does.
Speaker 3 (27:28):
That's why we picked those five because they all kind
of match together to say, please just make sure you
do the right thing. To listen to the Property Playbook.
Speaker 2 (27:33):
Do the right thing and listen to the Party Playbook.
We've got so many episodes that you can go back
to you and have a listen, and if you want
more information, you want more help, definitely head to is
the Property Playbook Facebook group. We have people in there
sharing tips and tricks and eighties all of the time.
Speaker 3 (27:46):
There's thirty thousand of them now, yes, so many. While
there are thirty thousand people that want to talk about property.
Speaker 2 (27:52):
Yay, thirty thousand people that are on this journey with me.
I feel so supported and loved. And then we also have,
of course the Property Playbook Instagram, where at Property Playbook
AUF we're gonna have a nice little diagram of these
five mistakes that you can save it, print it, put
it up on your wall. Make sure that you're not
one of those people. And if you do want to
talk to a mortgage broker, we'll have a link for
Zella in the show notes there who I'm using their
(28:12):
fabulous And to be honest, it's just nice to have
someone that you can pestart a million times a.
Speaker 3 (28:16):
Week with questions I'm not gonna lie. It's also kind
of nice knowing And obviously this is very biased because
I half phone Zella money, but also they're just like us,
Like if you like listening to the podcast, you're probably
going to like talking to our team because it's us.
Speaker 2 (28:28):
Hi. Just before we head off, let's quickly wrap the
boring but important stuff. The advice shared on the Property
Playbook is generally in nature and does not consider your
individual circumstances. The Property Playbook exists purely for educational purposes
and should not be relied upon to make an investment
or a financial decision. I hope you guys enjoyed today.
Leave us a review, if you had some fun, if
you learned something new, We would so appreciated.
Speaker 3 (28:50):
Due diligence for our podcast.
Speaker 2 (28:51):
Yes, but only positive due diligence please.
Speaker 3 (28:54):
Yeah, thank you.
Speaker 2 (28:56):
That's it, guys. I'll see you with the next episode.
Speaker 3 (28:58):
See you later, guys.
Speaker 2 (28:59):
Hi oo
The Property Playbook would like to acknowledge the traditional custodians
of the lands of where this podcast is recorded. There
were wondry people of the cooler nations acknowledging the culture,
the history, and the connection to the lands of what
we call home. Let's get into it.
Speaker 2 (00:27):
Hello, and welcome back to The Property Playbook, the podcast
where we take you from A to V of all
things property. My name is Jessica Ricky, and hopefully one
day I will own my first home, but until then
I'm speaking to all kinds of experts along the way
to help me get there. Today, I have maybe my
favorite expert, Victoria Divine.
Speaker 3 (00:46):
Hello. I feel like you are biased because I have
you on payroll, which is fine. I would like you
to continue to shower me in all of the compliments.
I'm excited, though, because I feel like today's episode is
going to be like us is the word sneak you're
using punchy? Yeah, it's gonna be real punchy, because what
have we got coming up?
Speaker 2 (01:04):
We have the top five mistakes that first home buyers make,
which seems like something that you would think I would
know about because I see next to Victoria all the
time and sometimes I make.
Speaker 3 (01:14):
A lot of mistakes and then you do too. Is
that what you were going to say?
Speaker 2 (01:17):
No, I say things and you go, jess what are
you doing? And I was like, Okay, maybe that should
be a podcast episode.
Speaker 3 (01:22):
Well, making mistakes is part of human nature, right Like,
every single person makes mistakes. It's how we learn, it's
how we grow. I don't think it's bad to make mistakes,
but the property playbook literally exists, so I can teach you,
and we can teach you as much as we possibly can.
So the amount of mistakes you guys are making a
next to none, right Like, if I've made them before,
(01:42):
learn from me. Use me as your guinea pig. And
I feel like, given the property market is literally ever changing,
one of the best ways to get ahead is to
always be I guess, thumb on the on the pulse
or finger on the pulse? Is that the term? Anyway?
I feel like that is why we want to talk
about the five most common that you and I are.
I see, especially in our business right because we've got
Zella Money, which is actually a mortgage breaking business, so
(02:04):
we get people into properties literally every single day of
the week. So I feel like I'm the right person
to be having this conversation because you know who's the
queen of the group chat about talking about what's going
on you?
Speaker 2 (02:16):
It's me, Fan goes off. Who's it going to be? Victoria?
But when I call her does she pick up? No?
Speaker 3 (02:20):
Why would I do that? You probably just want to
talk about what mac is order you want.
Speaker 2 (02:23):
It's true love, a good nuggy. Let's start at a start.
What is the first and maybe the biggest mistake that
you see people making.
Speaker 3 (02:30):
Ah, so this one is going to come as absolutely
no surprise to anyone, But it's not understanding your own
financial position. So it is crazy how many people just
assume that because they have a deposit they are ready
to buy, or they assume that because mum and dad
have said, oh go Garren tore, or you actually feel ready,
(02:50):
they assume that's enough. Yeah, but you need to understand
your financial position so so deeply, because if you don't,
you're going to find yourself in a little bit of
a pickle. And this is where the thing in the
entire world to do is actually talk to a mortgage broker.
A mortgage broker is going to grab your hand and
make sure that you have every single tool and resource
in your junk kit so that you can actually thrive.
(03:11):
And it's one of those things where a lot of
us just make grand assumptions about whether we are or
aren't financially ready. And do you know how many people
that we talk to and I think that the Shees
on the money community are really good at this, and
the property blaybook community as well, are reaching out before
they're ready, because do you know how many people we
talk to that go, oh, like a similar position to
do you, Jess, where you go, Oh, I might be ready,
(03:31):
but I might be ready in like six or twelve months.
And we go, well, actually, have you seen X, Y
or Z, because you can get into this scheme or
you can actually put yourself in this position, or because
of the career you have, Jess, we can actually get
your five percent loan. And it's just so good to
be able to talk to someone who knows your position.
But also, if you are in a position where you
(03:52):
don't know your financial circumstances to the nth degree, you
might end up biting off more than you can chew.
Speaker 2 (03:58):
Yeah, I was gonna say as well, I feel like
it's almost helpful to have that really super thorough understanding
because even once you've purchased, we've seen that things can change.
Over the last twelve months.
Speaker 3 (04:09):
Why we have gone back to basics and been like,
all right, scrap what we did, because at the end
of the day, the entire markets changed, and you guys
deserve a complete upgrade. You deserve everything that is going
on right here and right now. And at the end
of the day. It's not as straightforward as going, Okay, Jess,
you've got a fifty thousand dollars deposit. You want a
five hundred thousand dollars alone. That equals a five hundred
and fifty thousand dollars property. There are so many other
(04:31):
costs that you really need to consider, from you know,
property inspections to lm I solicitors, fees, stamp duty, you know,
even moving costs that you need to take into consideration.
And a good broker is going to help you with that.
But bigger than that, bigger than the property conversation. You
might go to the mortgage broker right and sit down
with them and they might go, oh, Jess, how much
(04:51):
do you want to borrow? Like what's the plan? You know, well,
how much can I borrow? And the broker might go, oh, Jess,
you can have up to seven hundred grand. You're like,
that's great. I love that. And you look at your
budget and you go, that's a bit of a squeeze,
but I want to make it happen. And so you
go through the process and you get that done. Right,
What if we haven't taken into consideration your other life goals.
What if the plan that you had was to get
(05:14):
married twelve months after moving in, and maybe you wanted
a baby, What does your financial circumstances look like, and
what are your financial goals looking like? Because I know
if you want to have a baby, that's a big
cost as well. That's an entirely other dependent person that
is going to be looking to you to look after them.
How's the mortgage going to get Paidess? How's that going
(05:35):
to work? So it's not just understanding just how many
dollars do you have in your bank account. It's understanding
your financial position and all of your other financial goals
that might come into play, because the worst thing is
going buying that seven hundred thousand dollar property because today
you can afford it, and in the future you can't.
Because your goals just changed and it might be worth going, Oh, well, Jess,
(05:55):
let's have a little bit of a chat. Your broker
is going to be really good at this conversation, I promise.
What does the next twelve to twenty four months look like? Jess?
You might say, oh, well, I'm going to do this, this,
and this. Knowing Jess her plan would be travel, not
a baby, it would be travel, And they might go, well, Jess,
do you realize how much of an impact is morre
you're just going to have on you. Maybe we worrow
six fifty or maybe we borrow six hundred and look
(06:17):
in a different kind of price bracket so that your
entire situation is taken into consideration and you can still
have that lifestyle that you want to deserve.
Speaker 2 (06:24):
Yeah, looking at things really holistically, I think is something
that we've had a lot of conversations about and about
the impact that the purchase has on you after you
make that purchase. And I feel like that kind of
leads into mistake number two that I definitely made, which
is looking at properties that are outside of your budget.
Speaker 3 (06:41):
You still do this all the time, but it makes
me sad. I'm throwing you straight under the bus. You
always do it, and it makes sense because it's so
aspirational and it's so fun. But if you have a budget,
let's say of five hundred thousand dollars, that's what we're
looking for. Yeah, I don't want you looking at properties
that are outside your budget. Do you know how many
times I have this conversation with Kate all the time.
(07:01):
We're like, you know, let's pretend it's just it's not
just doesn't do this, but Jess might send me a
link to a property that she's looking at. And when
you work with a broker often you do have that
back and forward relationship. It's not just you go to
get your loan right, Jess, Like you talk to Kate
all the time. You might send her a link to
a property and be like, hey, I'm looking at this one.
What would it look like if I lent XYZ? Like,
(07:22):
there's a back and forward relationship there. So the amount
of times where get sent properties from clients who have
a budget of five hundred thousand dollars and the property
is five hundred and fifty, you're like, hey, like, I
know there's a five on the start of that, but
you don't have five fifty. Like we can't look at
this property and they're like, oh, but maybe I might
just maybe I'll go to the inspection and see like
(07:43):
it might get passed in. It's twenty twenty three. It's
not going to get passed in and go for fifty
thousand dollars less than what it's advertised as unless there's
a significant issue, in which case it's probably going to
cost you more than fifty thousand dollars to fix. YEA,
So I think it's worth really just staying in your
lane when it comes to purchasing properties. Obviously, it's relatively
(08:05):
hard to on real estate dot com, dot a U
in like domain to actually filter byprice because some of them,
as you would know jest, just don't have the price
on them, and you actually have to click into the
statement of information and you have to see what's going on.
But where possible look inside your budget, because it could
be super disenheartening to actually look at what the budget
(08:25):
is and then be going out of it because you
just you're never going to find the property of your
dreams if you keep aspiring to something more but you
don't have that more to play with, right.
Speaker 2 (08:34):
Yeah, that's like when I looked at display homes, and
I went around and I thought I was doing the
right thing by just seeing display homes on mass and
I ended up finding that the homes that were within
my price range seemed really disappointing after looking at the
homes that we're out, and I didn't going into look
at these homes. I didn't really look into it too deeply.
I didn't go, oh, these displays are within my budget
(08:55):
and these aren't.
Speaker 3 (08:56):
I know, you just go to the long line of
ye that they had in your door to door to
do it. It's a good way of working out what
type of wardrobe you want. Oh, this feature is so cool.
I get caught up on all of the small details
when I'm in that circumstan and it's exciting to look
like a way to spend a week. Hend I did
it either when you're not buying, like, I'll come with you.
Let me know. I can I be that friend.
Speaker 2 (09:14):
Absolutely you can. But I feel like I really I
had that experience and I would see things I'd be like,
oh my god, this is beautiful. This is exactly what
I want, and it's two hundred thousand dollars more than
I can afford. And then by the time I got
to what I could afford.
Speaker 3 (09:25):
It seems to work, doesn't.
Speaker 2 (09:26):
Yeah, exactly, even though it wasn't. It was totally fine,
but because I was comparing it to something way above
my range, it just kind of put a little damp
and on it.
Speaker 3 (09:34):
Which is that The best thing that you can actually
do when you're on your home buying journey is sit
down with your partner and go onto real estate dot
Com or domain or whatever platform you're using to look
for property and click on the sold tab and then
click your budget so that you can see if your
budget's five hundred grand, pop that in as the MAXI
amount of sold, and see what in the area you're
(09:55):
looking for actually sold for the budget that you have,
and sit down with your partner, go through it and go, oh, yes,
would you buy this house five hundred grand? You might
go no, it's not north facing. Okay, well maybe that's
one of our non negotiables. And we can kind of
create a list of what our dream property within our
actual budget means. Because it's so nice to go through
what's for current sale because in our minds we're like,
(10:17):
we could have that one, we could have it. But
if we look at what's sold. Pragmatically, I'm not saying, hey, Jess,
would you buy this property? I'm saying, what are the
features and benefits of this property that are within your
budget that you would accept, and what compromises do we
actually need to make, because that will put you more
in a realistic mind of what you can and can't afford,
instead of consistently looking on to main We're all we
(10:40):
are all guilty of it. Right, the amount of times
when I was looking for property I'd put in my
budget a little bit higher. Don't put the buffer in
my fans. It just makes you sad and frustrated, and
it puts you in a position where you're not in
control anymore. So if you do that with maybe fifteen
or twenty properties in your dream look, you'll very quickly
(11:01):
work out what your potential actual home will look like
in terms of you know, bedrooms and bathrooms, and you
know access to public transport, and what kind of compromises
people are making for those features. Right, So you might go, oh, V,
I really wanted a three bedroom house in this location
with good access to public transport and X, Y and z.
(11:22):
But you might find that within that budget you actually
have to settle for a two bedroom house, but you
have all the other features and benefits that you said
you wanted. Yeah, so it's more about how do we
make it super realistic instead of getting ahead of ourselves,
which I'm so good at.
Speaker 2 (11:37):
Yeah, Like, which of those things do we prioritize and
which do we kind of be one hundred percent? Okay, well,
let's head to a really quick break, and when we
come back, I want to run through the next three
top mistakes that we see people making. Don't go anywhere, guys,
Welcome back everybody. Today I'm chatting with finance Queen Victoria Divine.
We're talking all about the top five mistakes that we
see first home buyers making. We've done two, We've got
(12:00):
three to go, Victoria, what is next on your list?
Speaker 3 (12:02):
All right? So the next on our list is when
buyers do not factor in additional costs. We touched on
this before when I said at the start of the episode,
oh my gosh, there's so many more costs to take
into consideration. But let's go through what I see to
be the top costs that you need to be budgeting for.
I'm the biggest fan of mortgage brokers, right like I
keep talking about them. But your mortgage broker will do
(12:25):
this for you if you don't want to do it yourself,
which is absolutely fantastic. They're also going to be far
more accurate than you can be down to like basically
the dollar, which is a dream. So there's obviously no
way around getting your deposit. Your deposit is so hard
to get, Jess. I know how hard you have been saving,
the compromises you've been making, but that's not where it ends.
I am so sorry. No, once you've saved enough, you
(12:48):
then hit with a whole heap of other upfront costs
and here are, in really short form ten that you
need to factor in. So first things first, depending on
where you are in Australia, whether you're a first home
buyer or a second home buyer, stamp duty, outside of
the deposit, this is going to be your second biggest
upfront cost. Stamp duty is going to you know, vary
(13:09):
depending on state or territory, but it tends to be
a fair chunk of your deposit. The next is a
transfer fee. So this is a fee that is levied
by the government to cover the cost of transferring the title.
This is not stamp duty sounds like stamp duty, but
it's actually the transfer fee. And again there's a very
big disparity between different states and territories, so please look
(13:33):
at what happens in your state. So, for instance, the
transfer fee in the Northern Territory it's one hundred and
thirty seven bucks. That's all right, so that's easy to
budget for, right, But if we go down to South Australia,
it's twenty nine hundred and one dollars. Yes, slight different,
So when I say discrepancy, I mean big discrepancy to
be South Australian exactly. The next is your mortgage registration fee.
(13:55):
So that's a fee that all states and territories have,
but then it depends on where you are as to
what it costs. So for example, in your South Wales
it's one hundred and seven bucks, in the Northern Territory
it's one hundred and eighty nine dollars. So like, not
the biggest difference, especially in comparison to our mortgage registration fee,
but definitely worth taking into consideration. If you don't have
(14:16):
a broker, you need to make sure that you're aware
that some mortgages actually have application fees on them. So
that could be a once off fee for them to
set it all up for you and do essentially all
the admin for you because it is a lot of work.
Most of the time when you work with a mortgage broker,
this is waved, and it's waved because basically the bank
knows that that mortgage broker knows what they're doing in
(14:36):
the bank's not having to do extra work. Another one
which we've spoken about on the podcast before is LMI
or lenders mortgage insurance. Home Buyers with a smaller deposit
are very likely to be in for paying LMI, so
this only gets put into force if you have less
than a twenty percent deposit and you don't actually meet
the criteria for any schemes or exemptions. The next get
(15:00):
I feel like I'm really in them all off. But
it's so yes inspection fees, So this is not just
to go and have a look at the property. We
need to make sure that we're getting our building in
pest inspections. You might be tempted to skip a pest infection,
but to make sure that you don't please get a
building in pest inspection. They can range anywhere between two
hundred and i'd say, five hundred dollars to get it done.
(15:22):
But if you had termites, Yes, right, you bought a property,
you skipped the pest inspection. Naughty noughty seven to ten
thousand dollars to get rid of the termites.
Speaker 2 (15:29):
Oh, it's worth spending the fun.
Speaker 3 (15:32):
Like that's a lot of money, and like you can't
put that on the loan. Yeah, you've got to cough
that up, hold hard cash because you're not renting anymore.
Can't call a landlord. Ah sucks, all right, another deep breath. Yes,
we have home building and contents insurance, so this is
not actually one of those things that is you know, oh,
maybe you get it, maybe you don't. To get a mortgage,
(15:52):
you have to have that insurance otherwise the company isn't
going to let you have it. Really, Yes, Actually, to
get a mortgage, the bank wants you to prove that
you've ensured the property so that they're in a really cushy,
nice position.
Speaker 2 (16:04):
Yeah, protect their investments, so to speak.
Speaker 3 (16:06):
Yeah, so you have to get a policy. And when
I have gotten my mortgages, I've actually had to send
a copy of the policy to the bank for the
funds to be released.
Speaker 2 (16:15):
Wow.
Speaker 3 (16:15):
Wow, So I mean, you could choose not to continue
that later down the track. I didn't say that, but
you need to factor that in. If you have a mortgage,
it's compulsory. Premiums are again get a various state by state,
depending on where you live and the type of property
that you're trying to ensure. But I would budget around
one thousand dollars a year for home insurance on about
a four hundred thousand dollar home, and around like five
(16:38):
hundred bucks each and every single year for contents is
where I'd see the averages falling. Now there's two more
Oh my god, we're not done. Sit down, Sit down.
There's one more moving charges. So we covered that. So
these can vary massively depending on I guess what you
have and what you move. I remember when I moved
out of my first sharehouse, everything I owned fit in
my car.
Speaker 2 (16:58):
Oh my god, I had the exact same isser.
Speaker 3 (17:00):
I was like, I don't own anything. Yeah, I think
my dad came up with his bigger car to get
the mattress for my double bed to move that queen behavior,
Yeah exactly. That was it. Moving my house that I
lived in with my partner for seven years.
Speaker 2 (17:15):
Very expensive.
Speaker 3 (17:15):
It was like nearly two grand or something ridiculous to
move from our rental because then we owned everything in
the rental because it was just my husband and I.
Yea into the property that we're buying. I was like,
oh my gosh, like everything is just adding up that
cost us like two grand and we were in the
same suburb.
Speaker 2 (17:30):
Jests, it's more than just your cups and play.
Speaker 3 (17:32):
It was wrought. And that included me trying to be
frugal and moving a lot of things in my car
before moving day because I didn't want them to break,
or I just wanted to drop them off, or I
was super excited to move in. So I would be
budgeting anywhere depending on how much stuff you have, between
like five hundred bucks all the way up to thirty
five hundred dollars for that. So that and I would
(17:55):
make sure that if you're going to do a removalist,
shop around a bit, get a few quotes, and don't
leave it to the last minute, because they know if
you've left it to the last minute, and they'll charge
your premium.
Speaker 2 (18:04):
Ah okay, great tip there.
Speaker 3 (18:06):
Now we have the last one. I'm ready for this,
as probably you are too. It's just connecting your gas,
electricity and phone and internet and.
Speaker 2 (18:15):
All of that, and turning off your old one as well. Yes,
that happened when we moved. I didn't expect a fee
to turn off our old electricity. Yes, are you not
just flicking a switch?
Speaker 3 (18:22):
It's usually like one hundred bucks to have it turned off. Yeah,
which is wild. But making sure that the new tenants
in your old house don't end up using your stuff
and you get builled for it very important to do.
But then also just making sure that you negotiate with
your vendor when you buy your house so that the
power can stay on while you're moving in and you're
not actually hit with any reconnecting fees could be a
(18:44):
good idea. So talk to the vendor, talk to your
real estate agent and be like, hey, can we have
it left on? Because also, there's nothing worse than having
to wait a few days for your power to go
on when you've just moved in.
Speaker 2 (18:55):
Oh, that happened to me. I moved in the middle
of summer. It was like a forty day no air con,
no fan, no nothing. It sucked, all right. We spoke
before about looking at properties and envisioning yourself in them.
I suppose looking at those really nice ones, feeling really
good about them, mistake num before that, we see a
(19:16):
lot of people making is becoming too emotionally invested in properties,
which is really hard to avoid. Can I just.
Speaker 3 (19:23):
Say, it's really hard, really hard, It's so hard. I
have some pragmatic advice, but also this is as I say,
not as I do, because I feel in love with
our house. Yeah, like, oh my gosh, I saw it
and I was like, Steve, if we don't get this,
I'm going to fall into depression.
Speaker 2 (19:41):
But it's the end.
Speaker 3 (19:42):
I am now depression Anyway. I get it because the
amount of people we've spoken to, Jess who have been
through this circumstance where they've been to like ten twenty
auctions and lost, Like, it's so hard, but it's so
important to remain not emotionally attached until we've signed a contract.
And when I say until we've signed a contract, even
when the offer's in, we're not celebrating yet, haven't done
(20:04):
your building in person inspection, not celebrating yet. What if
something comes up and you have to leave that relationship
between you and your house. I think it's really important
to make sure that when a lot of money is
at stake. We are making sure that we have really
clear feelings. We're not having conflicting feelings. It's not you
buying a property and my partner not really being that
(20:25):
into it. It's about making sure that you are absolutely
on it when we're purchasing, because honestly, too many times
people are listening to their heart about a property and
then finding themselves in a little bit of a pickle.
So even if the property you walk in and you're
just like, I know, I'm going to bring my babies
home to this house, we're not just skipping all of
(20:47):
the important steps. We're not going, oh, just get it done,
get it done, and we're skipping all of the important
things like building and best and checking the suburb and
the location with your broker to make sure it will
be serviced, and checking the value of the property. The
property value isn't as important when it goes to auction
because obviously in auctions a public process, and if it
goes for five hundred thousand dollars, there was competition in
(21:08):
that marketplace, and the bank's going to go well, if
it went for five hundred dollars, that's what it's worth.
But if you're privately negotiating and they say, well, just
so want five point fifty. Go back to your broker
and say, hey, before I agree to this five point fifty,
if you can afford it, obviously, can you just check
with the bank what the bank valuation on that property is.
Because we have had it before where literally a buyas
(21:31):
advocate who wasn't that experienced in buying and selling properties
for clients, we didn't have anything to do with them,
don't worry, had said to a client, oh my gosh,
it's definitely worth that beautiful home, and then they had
to cough up an extra fifty thousand dollars that they
had to find from friends and family because the bank
wouldn't give them that extra fifty grand because it wasn't
all the property was worth on paper.
Speaker 2 (21:52):
Nightmare situation. And I spoke earlier in the season to
a sales agent Monique for that, and we were talking
about preparing your property for sale, which is right when
you're on the other side of things. But in that
episode we spoke about all of the little tricks that people,
sales agents vendors use to make that home feel inviting,
to make you have that emotional attachment.
Speaker 3 (22:12):
Yeah, they're trying their hardest.
Speaker 2 (22:13):
On the other side, know that they're working really hard
to get you invested in that property. And our job
as potential buyers is to be like no blinkers on
not looking, not thinking, not smelling, just being neutral, which
is hard.
Speaker 3 (22:26):
Also, also, if you can't be neutral, have the pessimistic
view that I have, which is assume that every property
is trying to gaslight you.
Speaker 2 (22:35):
Is that like every approach with menas It's.
Speaker 3 (22:38):
How I got married. Turns out Steve's not a gas lighter,
so I married him. But assume that every single property
is trying to gaslight you. Why do I love this kitchen?
It feels too good to be true. Oh, you're right,
the lighting's pretty good in here. Oh they have recently
baked cookies. It does feel very homely. Have a think
about all those little things. I know that's very negative,
(22:58):
but Jess, I'm not the type of person and that
just goes in. It's like, oh my gosh, I'm just gonna,
you know, be real neutral on this. No, I need
to find the floor. Yeah, I need to work it out.
Assume that the property is gas lighting you, because I
promise you I'm sorry to all of my real estate
agent friends. I promise you they're trying.
Speaker 2 (23:14):
Yeah, there's something in there that they're trying. They're trying. You.
Speaker 3 (23:16):
You get fresh flowers, you make the house smell like cookies.
You change all the beds to double beds instead of
queen or king beds so the bedrooms look bigger. Yes,
you put the bed bases closer to the ground so
that the rooms look taller. They're on it. There's lots
of little sharing the properties trying to gaslight you.
Speaker 2 (23:33):
That is genius. All right. One last little mistake that
we see people making which kind of rolls off the
back of not getting emotionally attached, and that is people
who purchase properties without doing their due deligence.
Speaker 3 (23:46):
Yes, it's really really hard. So first things first, if
you go to the consumer dot viktorc gov dot AU website,
a mouthful, but you will understand it, they actually have
a due diligence checklist GUS and you know it's from
Consumer uamer Affairs, so you know that it's not like
a real estate agent being like, hey, only look this way. Yeah,
so that checklist is going to go through a whole
(24:07):
heap of things that you need to look into before
making a property decision. We obviously are going to have
our own version, which is absolutely more comprehensive. This is
just like the bare minimum, but this is where you
would start. So making sure if you're moving into inner city,
what actually high density living looks like. Are you going
to be able to get a parking permit in the city?
(24:27):
Are you actually going to be able to park your car?
You might be fine with on street parking because in
your head you've gone, oh, yes, it's a two bedroom,
one bathroom property, but it doesn't have a car spot.
You don't worry. I love the property, Yeah, I'll just
park on street happy to nightmare? When was your building built?
Speaker 1 (24:41):
Yeah?
Speaker 3 (24:42):
Are you actually going to get that parking permit? Is
the property subject to an owner's corporation fee?
Speaker 1 (24:47):
Also?
Speaker 2 (24:47):
Nightmare?
Speaker 3 (24:48):
How much is that? Are their growth areas? Are you
moving into an area where there's going to be a
whole heap of infrastructure contribution going on? Are you happy
to live in an area where there's a whole heap
of building going on around you planned that could actually
be really good for property growth. So it goes both ways.
Rural properties, you're moving to the country, what type of
(25:08):
bush fire risk is there, What type of flood risk
is there?
Speaker 2 (25:11):
Not even just rural. I saw that property in it
somewhere in the suburbs, and I was challenged Kate, and
she's like, just so you know, there's a flood yea
something in place, And I was like, ah, well, I'm
looking in suburbia exactly.
Speaker 3 (25:22):
But like when I moved into our property, we actually
have like a caveat over the property that says, oh,
you're on this type of area. Our insurance is more
expensive because of it. Yeah, please do your due diligence. Again,
talking to a good solicitor is going to help you
through this. And that is why we always say, when
putting in an offer on a property that's not going
to auction, make sure it is subject to building and
(25:45):
pest inspections and finance to give yourself the ultimate get
out of jail free clause, because I don't want you
putting your deposit down and then your solicitor coming back
and being like, hey, did you realise this a caveat
over the property and you're not actually allowed to build
something taller than one story.
Speaker 2 (26:00):
Yeah, so good luck building the extension that you had planned.
Speaker 3 (26:02):
On Yeah, Like, good luck making the most of that
three hundred square meter block. Like, there's so much that
could happen, So please do your due diligence. Make sure
that you know if there are any building permits or
buyers rights or things that you need to understand, you do.
It's all going to be in the contract, but it
doesn't mean that you're necessarily able to interpret it. I
would assume, Jess, I'm a relatively intelligent person, or I've
(26:24):
grown up to believe i am, because my mum has
always pumped me up. Right, I didn't understand a lot
of what was in my property contract, and that's okay
because they had the right team behind me. Yeah, and
they told me and they said, this is what this means,
Like you're fine here and here just be aware of
x am. I happy with that, yeap, no worries. Let's
move forward with this. So please do your due diligence
and make sure that you understand absolutely everything that is
(26:47):
involved in purchasing that particular property, because even if you're
looking at next door, it might be different.
Speaker 2 (26:53):
Yeah. We've spoken so much I think on the due
diligence thing, and I feel like it's one of those
pieces where no matter how many times we say it,
it's not enough, it is the most important thing that
you can do to protect yourself and your investment.
Speaker 3 (27:04):
One hundred percent. Because all of those five things that
we've talked about today, they all kind of like sandwich
in together, So like, not understanding your financial position then
means that you might be looking at properties that are
outside of your budget, which means you haven't factored in
any additional costs because you didn't know your financial position,
and then you became emotionally attached to a property, so
you just did the wrong thing. And how many people
have done that?
Speaker 2 (27:25):
Yeah, it's like a little flow chart if that does.
Speaker 3 (27:28):
That's why we picked those five because they all kind
of match together to say, please just make sure you
do the right thing. To listen to the Property Playbook.
Speaker 2 (27:33):
Do the right thing and listen to the Party Playbook.
We've got so many episodes that you can go back
to you and have a listen, and if you want
more information, you want more help, definitely head to is
the Property Playbook Facebook group. We have people in there
sharing tips and tricks and eighties all of the time.
Speaker 3 (27:46):
There's thirty thousand of them now, yes, so many. While
there are thirty thousand people that want to talk about property.
Speaker 2 (27:52):
Yay, thirty thousand people that are on this journey with me.
I feel so supported and loved. And then we also have,
of course the Property Playbook Instagram, where at Property Playbook
AUF we're gonna have a nice little diagram of these
five mistakes that you can save it, print it, put
it up on your wall. Make sure that you're not
one of those people. And if you do want to
talk to a mortgage broker, we'll have a link for
Zella in the show notes there who I'm using their
(28:12):
fabulous And to be honest, it's just nice to have
someone that you can pestart a million times a.
Speaker 3 (28:16):
Week with questions I'm not gonna lie. It's also kind
of nice knowing And obviously this is very biased because
I half phone Zella money, but also they're just like us,
Like if you like listening to the podcast, you're probably
going to like talking to our team because it's us.
Speaker 2 (28:28):
Hi. Just before we head off, let's quickly wrap the
boring but important stuff. The advice shared on the Property
Playbook is generally in nature and does not consider your
individual circumstances. The Property Playbook exists purely for educational purposes
and should not be relied upon to make an investment
or a financial decision. I hope you guys enjoyed today.
Leave us a review, if you had some fun, if
you learned something new, We would so appreciated.
Speaker 3 (28:50):
Due diligence for our podcast.
Speaker 2 (28:51):
Yes, but only positive due diligence please.
Speaker 3 (28:54):
Yeah, thank you.
Speaker 2 (28:56):
That's it, guys. I'll see you with the next episode.
Speaker 3 (28:58):
See you later, guys.
Speaker 2 (28:59):
Hi oo
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