For starters, if your budget limit is $600k, you’re looking at stuff advertised for $500k or less. Most estimated price ranges are about 10-20% under what they will likely sell at. You just have to accept that.
Best recommendation is do lots of market research. That can be as simple as trawling through all the real estate magazines and going to as many open houses as you can, even if you think the place is out of your reach. After a while you start to get a good read on what the market values are for different places and in different suburbs (“they want $900k for this? The one around the corner was heaps better and it went for $870 three weeks ago”). Check places on line as they often list previous sale prices and dates (They’re asking $600k, when it sold for $400k 12 months ago?).
List the things you want in a house (how many bedrooms, how much storage, garage vs carport, kitchen size, etc) and decide on how much work are you prepared to accept to get that house to where you want it (ie - does it need a new kitchen - if so - now, or in 5 years?). If you have kids, where do you want them to go to school? Primary and Secondary schools are pretty much all zoned now, so whatever is closest is where you kid will likely end up unless you fork out for private. If you don’t have kids this may not seem a consideration right now, but down the track it be a huge factor. Also, the new zoning requirements is having a massive impact on market prices in suburbs zoned to highly rated schools. Look at access to public transport and what your needs are. If you only go into the city to go to the footy on weekends, then look further out. The last place I sold was on a road that they subsequently announced will be a designated bypass road for the new Ring Road - Eastlink connection. Lucky for me we sold a couple of months before it came out. Dumb luck on my behalf.
Once you find a place you are keen on, get it checked. Check the title, boundaries, termites, building inspection, etc. You will pay extra, but it can save you in the long-run. If you can, try to find out why it is being sold. Sometimes it’s as simple as they got a new job somewhere, but it can also be giant rats keeping them awake at night. I bought my current house in Eltham, so was very mindful of getting a termite inspection (all clear!) as well as checking for any overlays on the block (I have a giant gumtree that the council would never let me cut down).
If the place you are keen on is going to auction, don’t be afraid to put in an offer before the auction. Remember, the seller is often as nervous as you and is terrified it won’t sell. A good offer before the auction may be accepted, depending on the interest being shown. Remember, the real estate agent is only interested in making the best profit and will always try to generate as much competition as possible.
If you go to auction, have a firm plan in place for how you will bid. SET A LIMIT AND DO NOT EXCEED IT. Do not let the emotion of the auction let you stretch beyond what you are comfortable paying. Remember that nothing the auctioneer/estate agent will tell you on the day should be anything to sway your decision - you should already know exactly what you are bidding for. When you set a limit, choose an offset number above a round number as people will often set their limit that way (ie - $613,500 instead of $610,000). There are plenty of websites that offer tips on bidding strategies, but generally try to get the bid increments down to small sizes (don’t let the auctioneer tell you he is only accepting $20k/$10k/$5k bids. If you want to offer $1k bids from the beginning, that’s your right), sound confident, match other bids straight away and don’t show if you are getting close to your limit. Once you’re at your limit, STOP. If you miss out at an auction, don’t stress, there will always be another house being sold that you will like. Don’t tell the real estate agent your limit (if during open houses they ask you, tell them you’re thinking “around the price range this place is at”, not “we can’t go past $600k or we’re broke”. If you tell them your limit and it’s above what he’s hoping for, guess which figure is most likely going to end up on the day?
Having bought and sold a few houses now (and still have a mortgage), I would recommend being conservative for your first place. Heaps of young couples/families over-reach in the excitement of a new house. You don’t need 6 bedrooms (“but what about when cousin Bob comes to visit from France?”), huge yards need mowing/maintenance, swimming pools are a total pain in the ■■■■ to maintain, and more likely than not you can get by with one bathroom for a while. Old kitchens may look ugly if they are in a lovely shade of 80’s beige with matching brown paisley tiles, but as long as the oven cooks ok, the fridge fits and you have a sink you will be able to make meals. Buying an older, but still easily liveable house, with an eye to renovate down the track is cheaper than buying something that has just had a facelift (plus if you’ve ever seen the home reno TV shows, you’ll know that most of them are fixed up cheap and then flipped for profit anyway). You also get to shape your home how you want it as well. The smaller your mortgage, the less stress you’ll have and the more options you’ll have down the track.
