Buyers Guide

Buying a Property

Owning your own home is still one of the great Australian dreams. Whether you are a first time property buyer or a veteran of several properties, the excitement of finding the right home and making that successful offer or bid never wanes.

It’s important to first organise your finances to work out how much you can afford before you start looking at properties. You can make the buying process a lot easier by becoming pre-approved with a lending institution. You’ll then know at what price range to start looking.

Shop around for the best mortgage. Look at more than just the interest rate, redraw facilities and the ability to make extra repayments can save you money.

Costs when Purchasing

Apart from your mortgage repayments, there are other costs to consider in purchasing a property:

• Loan application / establishment fees / Stamp duty on the mortgage.
• Your Lender will advise the deposit you will require.
• Building and pest inspection fees.
• Stamp duty on purchase. www.osr.nsw.gov.au
• Legal / conveyancing fees / Transfer and registration fees.
• Insurance.

Do you qualify for the First Home Owners Grant?

Visit NSW First Home Buyers – www.osr.nsw.gov.au/firsthome to find out eligibility requirements.

Decide What You Want

• What area or suburb do you want to buy in?
• Do you want a house, apartment or townhouse?
• Do you want a yard, courtyard or balcony?
• How many bedrooms and bathrooms do you require?
• How much storage space, car parking and or garage do you need?
• Do you need to be near public transport, schools, childcare and work?
• Are you prepared to renovate if the property requires it?
• How to Source Suitable Properties for Sale

Now that you’ve worked out your finances and property requirements, it’s time to start the search. The best way of sourcing suitable properties is through property internet sites and local newspapers. Start your property search on www.russellproperty.com.au

Before Making an Offer

When you have located a property you would like to buy, ask to view the contract. The contract includes the title documents, drainage diagram, zoning certificate, council restrictions on the property, and items included or excluded from the sale. Your solicitor or conveyancer should thoroughly check the contract to ensure everything is in order.

It’s important for you to know the following

• You will submit your offer to the agent, who is legally bound to pass on all offers to the seller.
• The property remains on the market while the seller considers all offers.
• You can make your offer conditional on certain items (subject to Building & Pest Inspection or Finance Approval ) any special conditions must be written into the contract.
• Your offer is not legally binding until the contract has been signed by both you and the seller, and deposit paid (usually, 10% of the purchase price).

Conveyancing

Inexperienced buyers should seek professional help and advice on the conveyancing process. A conveyancer or solicitor is skilled at handling the paperwork associated with the property purchase.

Inspecting a Property

With most contracts, it’s up to the purchaser to check the building. When you consider the amount of money that you’ll pay for the property, a few hundred dollars spent obtaining professional building and pest inspections, will giving peace of mind.

• Check for rising damp, waterproofing, gutters and leaks.
• Check the structural integrity and condition of the floors, walls, ceilings, doors, windows, cladding and roof.
• Check all services including electrical, water, sewer and drainage.
• Check for timber pests including termites, borers, timber decay and fungal damage.
• Should the contract be approved and building inspections passed, you can now progress the purchase.

Exchange

Once you and the seller have agreed on all issues, the agent will require you and the seller to sign the sale contracts. There are 2 copies, one for you and one for the seller. Only when you have both signed the contract, exchanged copies, and the deposit paid, do you both become bound by the contract. The deposit will likely be held in trust by the agent. You are now committed to buying the property subject to the ‘cooling-off period’, if agreed.

Cooling-Off Period

As a buyer of residential property, you may be granted a “cooling-off period”. This period commences on the day of exchange and ends 5 business days later at 5pm. During this time, you can withdraw from the contract, however if you do so, you will forfeit 0.25 percent of the purchase price (taken from the deposit paid). If you’ve not already conducted your pest and building inspections, you now have 5 days to do it! It’s vital that you have written confirmation of your loan approval before the expiration of the cooling-off period.

Settlement

The period of time between the exchange of contracts and settlement is usually 4 – 6 weeks. Settlement day is a pre-arranged date when the exchange of contracts will be formalised. This is typical of what happens on settlement day:

• Your lender authorises payment of the loan money and payment is made to the seller.
• Your solicitor/conveyancer authorises the payment of the deposit money held in trust to the seller.
• Your solicitor/conveyancer allows for adjustments on taxes, council and water rates.
• You receive a signed transfer of the title deed, and the Registrar General will register the transfer and the loan.
• The title deeds and mortgage are held by your lender until the property is fully paid.
• You have the keys and the property is legally yours.