Buying your new home

Buying a home needn’t be stressful; you just need to be prepared. Here are some useful things you need to know, to be ready to purchase your dream property:

1. Shop around and obtain pre approval for a loan. Make sure that you are comfortable with the repayment amounts after you establish how much you can borrow. Just because you can afford it doesn’t mean you will be comfortable paying this amount and restricting your lifestyle. Your bank and mortgage broker will be able to provide you with pre approval once you have supplied the necessary paperwork.

2. Think about the things that are most important to you, in a home. You may like to consider:

a. The location, think about what suburbs you may wish to live in;
b. The size of the dwelling, do I need 3 bedrooms or would 2 be ok;
c. Proximity to transport, do I need to catch the train to work or not;
d. Condition, do I really want to renovate and do I have time to do it; and
e. Can I afford a property in this location that meets the above criteria.

3. Think about what conveyancer or solicitor you would like to use. If you don’t know one, ask your mum or dad, as they may have used someone in the past. Even a real estate agent may be able to recommend someone. You will need to appoint a conveyancer or solicitor, once you have found your dream property as they are required to do the legal work for you.

4. Get to know the real estate agents in the area you wish to live. You can sign up to their weekly reports and sometimes hear about properties that are coming to the market, before they hit the internet sites.

5. Once you have the above things in place, it is time to find the perfect home by attending open houses or making a time to look at the properties via a private inspection. You will quickly be able to determine if you can find a home you like, in the area you wish to live, at a price you can afford. Remember to be somewhat flexible as you may have to compromise on the location, for features and price you can’t or don’t want to change.

6. So you have found the perfect home, what now? Time to employ the professionals.

a. You will probably want to conduct a pest and building report, so that you know what needs to be fixed. Sometimes an owner/seller will have already had one completed, so check with the real estate agent before engaging an inspector. The pest and building reports are there to criticise the home and will point out any minor or major works that needs to be undertaken. Remember however, that all homes will have issues and most of the repair work can be done over time and not immediately. They will also indicate if there are any current or previous pest issues, such as termites.

b. You will also need to appoint a conveyancer/solicitor as they will need to review the Contract for Sale and discuss any changes, they would like with the sellers conveyancer/solicitor.

c. Your lender (bank or broker) will need to organise a valuation so that formal finance can be arranged and approval for your loan, given. You will also have to organise your 10% deposit and make arrangements for it to be delivered to the real estate agents office. The deposit, generally sits in the real estate agents trust account until settlement. The deposit forms part of the sale price and the balance of the purchase price is due on settlement. Sometimes the deposit can be 5%, but this must be agreed to, by the seller.

d. You can organise to sign the Contract for Sale with a five day cooling off period with the real estate agent, handling the sale. When you sign the Contract for Sale and put down a deposit of 0.5% of the sale price, this will secure the property. You will then have 5 days in which to confirm your finance, conduct the pest and building report and make sure that your solicitor talks to the other side about any changes to the Contract, they may like. By signing the Contract for Sale you are excluding any other buyers from seeing the property and making any higher offers. In other words, you can spend money on the property knowing that you have secured it and you won’t be gazumped. Once the seller has signed the Contract, they must sell to you. You can change your mind (within the 5 days) and not proceed with the sale but you will forfeit the 0.5% deposit, if you don’t proceed.

e. You can decide not to sign the Contract for Sale, with a 5 day cooling off period but the real estate agent is obliged to show the property to other prospective buyers, if requested. If you don’t sign with a 5 day cooling off, the real estate agents will do a sales advice, which will go to your conveyancer/solicitor and the seller’s conveyancer/solicitor and the conveyancer/solicitor will conduct the exchange with a 66w. A 66w waives any cooling off period and can only be supplied by a conveyancer/solicitor.

f. Once exchange is unconditional you normally have 42 days till ownership or settlement. During this period you should start packing and preparing for the move. Remember to notify all your utility providers, friends and family.

g. On the day of settlement you would normally do a final inspection, to confirm that the fixtures and fittings are still in the home and that all is ok for settlement to occur. You will need to then notify your conveyancer/solicitor that all is in order so that settlement proceeds. Once settlement has occurred, you should notify the real estate agent and they will make arrangements for you to collect the keys.

Congratulations you have now bought your new home!

 

Disclaimer

This information has been provided as an indicative guide only and you should make sure that you seek independent legal advice, so that you have a thorough understanding of your legal obligations before proceeding to purchase on a property.