First Home Buyers on a Mission to live within 8km of the City…

A fabulous couple recently engaged Cate’s services to help find a home which would not only enable them to keep living in Melbourne’s inner west, but would bode well as a possible investment property in the years to come if and when they upgrade.

The brief was simple. Three bedrooms, a lock up garage, no renovation work required, ideally no body corporate, and to remain in the inner west community within 8km of the CBD. As simple as this may sound, the task was not an easy one. They were first home buyers and were well aware that the stamp duty savings on offer from the State Government are only applicable up to a purchase price of $600,000.

One cent over this price will trigger a full stamp duty calculation on the land – a price tag of around $13,000 for any first home buyer who dares to spend over the government’s limit.

We carefully profiled their criteria list. Separating must-haves and nice-to-haves is integral for any sensible search – and our pragmatic pair were easy to work with in this regard. They accepted that the likelihood of a suitable property in the sub-$600,000 price band being on its own title and devoid of an Owners’ Corporation was slim, but we were hopeful that we could find a free-standing, subdivided property on its own title with a bit of careful searching. Our search band was isolated to West Footscray, Footscray, Maidstone, Kingsville, Newport and South Kingsville. We deliberately targeted areas where we knew a sub-$600,000 budget could deliver a 3BR home with lock up garage.

When our couple inspected 68 Norfolk Street in Maidstone, the excited text message was met with concern.

Had we sent them to a property that could reach $600,000? Possibly. On closer inspection, this little house was street-fronting, did not have any body corporate and had a fantastic floor plan which met every must-have criteria on their list. It was tenanted though, and while in our target location, the property was dated back into the 90’s and wasn’t every buyer’s dream. The question to of whether to chance it and go to auction, vs establish a fair price with the vendor and buy it prior is always a critical one. Had we chosen to go to auction, we were not only reliant on other first home buyers not seeing the value in this property, but we were placing ourselves in a position of jeopardy if an investor saw value. Investors not only have low interest rates fueling their success, but in a sea of first home-buyers, investors often have the last laugh when the hammer falls on the property for $600,500.

Many a sales result can be spotted for $601,000 or $600,500.

The limit that the state government has placed on the first home buyer stamp duty concession has arguably distorted the market, particularly in the $550,000-$600,000 region.

It was a sensible decision to move swiftly, decisively and clearly on this property. Our proud owners have secured their dream, the vendors have a sure-thing and the chance of heartbreak was averted. Trusting agent relationships are key to pre-auction purchases, and in this case we are very grateful that we had a fantastic line of communication all the way along.