Guide to Buying
So you are in the market for a new home or investment property? Here are a few tips and strategies on how to prepare for your purchase and ensure that the buying process is stress free.
When buying any property ensure all of the essential preparation has been completed. This includes securing the right finance. Talk to your bank or employ the services of a mortgage broker. You’ll need to know how much you can safely borrow as well as figure out the type of loan that best suits your needs. Take into account stamp duty, cost of conveyancing, possible moving expenses and the repayments, while also allowing for increases in home loan interest rates.
Finally, research the different levels of State Government financial assistance that may be available to you. Assistance is available for first home buyers. There are also differences in stamp duty rates for newly built homes and established homes.
Looking for your new home or investment property can be exciting. But rather than rush in, it pays to be prepared and do as much research as possible. What’s currently on the market? A Real Estate professional is willing to help so don’t be afraid to utilise their knowledge and register with an online email alert service. It’s also advantageous to spend some time researching the area in which you intend to buy. What are the local amenities? How convenient is public transport? And what have recent properties in that area sold for? Attending several auctions is also a great way to see what’s happening in the market place and set a realistic purchase price.
Once you find the property you want to buy, carrying out a building inspection is a must. A building inspection involves a thorough examination of all accessible areas of the house or apartment to determine its overall condition and pick up any defects. Each building inspection should be undertaken by an experienced professional to guarantee you have a detailed knowledge of the structural condition of the property. A comprehensive building report should also be provided after each inspection. The inspection and report will set you back a few hundred dollars but it’s money well spent and could save you thousands in the long run.
Finally, don’t forget to read the contract of sale, including the Section 32, which includes information about rates, local government building restrictions and easements (if any). You may even want to ask your conveyancer or lawyer to check the fine print.
In a private sale the property is advertised and offers are invited from prospective buyers. The sale is negotiated between the buyer and seller, usually with the assistance of an agent.
- The seller and buyer agree on a sale price through negotiation
- The contract can be conditional. With the seller’s approval, the buyer can make the sale subject to obtaining a loan, a satisfactory building inspection report, or other conditions
- For residential properties, the buyer has a three business day cooling-off period (with exceptions).
An auction is usually held at the property itself. Ensure you arrive early on the day so you can take one last look around the property. You’ll also feel more relaxed and level headed if you have time to spare. Attending other auctions in the lead up to yours is also a great way to become accustomed to their pace and procedure.
At the beginning of proceedings the auctioneer will describe the property and describe the contract. They will then begin taking bids. This is when the excitement really builds. Some buyers take along a friend of family member who bids for them if the task is a little daunting. As the action unfolds don’t be afraid to bid strongly and confidently, letting others know you mean business. If you are successful at the auction you’ll be asked to sign the contracts and pay the deposit, so don’t forget your cheque book!
Settlement is the date on which the balance of the purchase price is paid to the seller, and the title of the property is handed over to the buyer. The seller sets the date of settlement in the contract. The settlement period is usually between 30 and 90 days but a buyer may be able to negotiate an alternative settlement period with the seller prior to signing the contract.
Whether you are bidding on a property at auction or making an offer on a home that is privately listed, here is a final checklist:
- A pre-approval of finance (if required) from your bank or lending institution.
- You have selected a solicitor or conveyancer.
- Ask for a copy of the Vendors Statement (Section 32)
- Determine how you will be paying the 10% deposit and associated costs.
- Consider the level of stamp duty that will be payable.
- If eligible for a government grant – know its extent and conditions.
- An idea of settlement time required before you take possession.
Now it’s time to celebrate!