Buying your property with us
Understanding the buying process
Purchasing a home is a big step for anyone and there are lots of things to consider before doing so. Here you will learn a strategically used buying process to give you a step by step guide when you are considering purchasing a home.
Sorting out your finances
Before buying a home you will need to have a deposit saved. Most vendors will require that you have a 20% deposit for your home loan eg. If the house you want to purchase is $400,000, you are required to have a $80,000 deposit. However most vendors have loan products to borrow up to 90% of the property value.
It is best to create a budget to specify what you are able to afford to spend on mortgage repayments.
Mortgage Calculator
Once you’ve sorted out your budget, you can then use a home loan repayment calculator to get an idea of what your mortgage repayments would be.
Pre-approved finances
Approach vendors to get finance pre-approval to know what price you can look at when it comes to buying your new home.
Doing your research
Start researching neighbourhoods that are suitable to your budget and needs. Researching online is a great way to understand the average sale prices of houses, land and units in an area.
How to make a formal offer
To avoid any confusion when making a formal offer, have the offer in writing. A sales consultant will present the contract to the sellers focusing on any conditions of sale.
After your offer is accepted
If your offer has been accepted and all parties have signed the contracts, you will then be asked to deposit which usually equates to 10% of the purchase price.
Selecting a solicitor or conveyancer
You will need to assign a solicitor to act on your behalf once your offer has been accepted.
Property purchase costs
Financial fees range greatly depending on such matters as what percentage of the property value that you will be borrowing, the amount of the loan, the amount of the purchase and which bank you will be borrowing funds from. Speak to your Makaidlan Financial Services representative to estimate costs for your particular circumstances.
Possible costs you may have are:
- Bank fees
- Solicitors/Conveyancing charges may include legal searches (please consult your solicitor)
- Home protection insurance
- costs (building inspections, removalists etc.)
Completing your purchase
Before settlement your solicitor/conveyancer will initiate the necessary searches with respect to the property and your financier will prepare the mortgage documentation.
On settlement your solicitor will exchange with the seller’s solicitor:
- Payment
- Transfer documentation
- Keys to the property
In the period of a few days of settlement, your solicitor or financier will register the necessary documentation and mortgage transfer with the Land Tiles Registry.
Ownership of the property tends to takes place on the settlement day although the seller and buyer can make an agreement to change the dates.
Makaidlan team member will
contact youto arrange a pre-settlement inspection date. This gives you an opportunity to make sure that everything is in working order and that the property is still in the same condition that it was when the contract was signed. If any issues were to arise during this inspection, contact your conveyancer immediately to postpone the settlement date until all your concerns have been addressed.
Buying your first home
Budget –
You should start by laying out a budget that is realistically in your range, once this has been done it is best to speak to a mortgage broker about what home loans on the market are suitable for your budget and whether it’s possible to get a home loan pre-approval. Pre-approval makes the lending process easier when it’s time to apply for a home loan.
Our mortgage brokers help you with secure financing and share with you different home loan products and interest rates to help find what is most fitting for you. Brokers work individually from lenders and don’t cost a thing because the fees are paid for by the lender so you can get financial advice at no cost.
Due Dilligence –
It’s important to do your due diligence before buying a home which means to inspect the property to see whether building and pest controls have been implemented. Both require a cost but it is worth seeing whether there is structural damage from termites etc. because it can cost you thousands more if you were to find out after purchasing a home.
Buying at auction –
Doing your due diligence is completely necessary before any procedure of sale. If interested in an auction sale, building and pest controls will need to be carried out before an auction even if you are not the successful bidder.
Additional costs –
Aside from deposits and mortgage repayments, there are also other costs you will need to be aware of such as:
- Lawyers/Conveyancing fees
It is a good idea to have a lawyer assess the contract of sale and mortgage documents before signing an agreement.
- Stamp Duty
Stamp duty can be borrowed as part of your home loan. Stamp duty costs depend on which state you’re purchasing your property in and some states also have first home buyers stamp duty concession.
- Home and contents insurance
Home insurance is essential when it comes to buying a home. Insuring your home is something that needs to be done even before moving into your property so make sure to thoroughly look for a premium that best fits your budget and needs.
- Building and pest control
It’s recommended to invest in a building and pest control check before you sign a contract to ensure your potential home structure is well and that it is pest free.
Buying at Auction
The auction process may seem intimidating but there are many advantages when attending one such as knowing the true market price, who your competition is on the day, being given a fair opportunity to buy, open negotiations, confident you are dealing with sellers that are ready to sell and at the fall of the hammer – you know your bid is successful and that there are no further negotiations.
Preparing for an auction
Once you have found a property that you’re interested in, you will need to have your finances organised by the auction date. This would also be the right time to sort out finalising the sale of your existing property and familiarising yourself with the auction documents.
If you haven’t been to an auction before, it would be a good idea to go to a few others before attending the one you are interested in buying just to familiarise yourself with how the auction will go down.
Inspect the property as much as possible and if necessary have a tradesman, plumber, electrician or whatever is needed to follow you.
Make sure to check the auction documents to make sure you understand all of the details of the document to avoid any miscommunications on the auction day.
Sorting out your finances
Buying a home through auction is different from other methods of sale so it is important to make sure that you have all your finances sorted before auction day. Set a clear budget for your bidding and make sure to stick with it because if you are a successful bidder on the auction day, the only thing left is to sign the contract. Be aware that at an auction, you will need 10% of the purchase price ready.
Doing your research
Once you’ve sorted out your finances, start to research the property and the neighbourhood that it is in. Have a look at recent sales to indicate what the market value of the housing in the area is. This will also help you set a bidding price once you are familiar with the pricing of houses/units etc in the area.
Inspecting properties
It is highly recommended to utilise the time of an open home to thoroughly inspect a property.
On auction day
Give the home a final inspection and ask questions before bidding begins.
Majority auctions are held “subject to a reserve price” – the price below which a property may not be sold. When this happens, the auctioneer will then announce that the property is for sale.
Consider that the bid you make over the reserve price could possibly be the one that buys the property.
‘Passed in’ is the term used when a property fails to reach the reserve price and negotiations between the highest bidder and the vendor do not result in a sale.
After being passed in, the property will then become open to the market and everyone will have an equal opportunity to submit an offer.
If successful on auction day, you will be asked to sign the sales agreement and pay a deposit which is normally 10% of the purchase price. Note that there is no cooling off period on the purchase of a property at an auction as there is for other methods of sale which is why it is essential to do your due diligence on the property before auction day.
Buyers checklist
When buying a home there are things you need to consider and you can often forget what to look out for when inspecting a property. Here is a list of what to focus on at an open home:
The dwelling structure
- Poor construction
- Damage from pets
- Wet spots on walls or ceilings
- Cracks in the foundation
The neighbours
- Are the neighbours yards neat and tidy?
- Do you have enough privacy?
- Are neighbours pets going to be an issue?
Location
- Is the property located on a busy road?
- Nearby to retail or commercial space?
- Is the property near a train line?
- Any powerlines over the property?
- Close to schools?
- Is the property on a flood plain?