Buying a Property

Buying a property requires a considerable amount of research, time and commitment and planning.  The first thing you should do before you start researching a property is determine how much you can afford and the area in which you wish to buy. 

Researching recent sales and the price of the properties on the market should give a good indication of property values and an understanding of the market in the area which you are looking to buy.

 

Purchasing your property

• Making an offer

Deciding how much to offer can be difficult.  You might want to make your best offer and be prepared to negotiate. 

• Contract of sale

A residential property cannot be put on the market until a contract can be drawn up.  A contrct of sale sets out the terms and conditions of the sale.  A buyer can be examine the contract at anytime during the buying process, even before an offet is made.

• Contract exchange

Once your offer has been accepted or you have purchased your new home at auction, contracts must be signed between you and the vendor.  Most people employ a concoyance/settelment agent or solicitor to do legal work involved in purchasing a property such ad a perparing documents, giving legal advice on contracts and explanining and implications. 

• The deposit 

When contracts are exchanges you will be required to pay a deposit, usually 10% of the purchase price.  The deposit is payed to seller's real estate agent or solicitors who will put the money into a trust account until settlement, when the balance of the purchase price is paid. 

• Cooling-off period 

In some states in Australia, there is an cooling-off period of three to five days following the exchange of contracts, during which you can withdraw from the sale.  During the cooling-off period it is common and permitted for buyers and/or building inspections. 

There is no cooling-off period for sellers and there is no cooling-off period for buyers who have purchased at auction.

• Settlement

The sale is finalised when the balance of the purchase price and the other adjustments have been paid anf ther title and transder documents have been exchanged. Settlement usually takes place between 2-6 errks after contracts have been signed by both parties.  At settlement you can explain the tax payable in your State or Territory. 

 

Buying at Auction 

Before you bid at auction you must understand exactly what you are doing and have satisfied yourself about all details of the property.  If you are the sucessful bidder and the property is sold to you under the hammer, you are obligated to purchase the property.

• Reserve price

Before auction the seller will nominate a 'reserve' price to their agent, which is the lowest price the seller is willing to accept.  The reserve is not revealed to buyers.

• Passed in

If a property fails to reach the reserve price the property can be 'passed in' or withdrawn from auction.  The agent may then negotiate with the highest bidder on behalf on the vendor.  This may result in a sale. 

• Dummy bidding

It is illegal to make 'dummy' bids at an auction.  If you make 'dummy' bifs for the seller you may be prosecuted and incure a substantial fine.

• Purchase at auction

If the property is sold at auction the successful bidder is required to sign the contract of sale and pay a deposit (usually 10%) immediately

 

Choosing a Home Loan

There are a variety of home loans available, each offering different rates and features. Lenders will provide information on the types of leans they offer.

When selecting a loan you shoulf look for a competitive rate of interest, sufficient repayment time, favourable condition and options that suit yout needs. 

There are two basic home loan types; variable loans and fixed loans. Each has advantanges and disadvantages.

 

Property Inspections

Before you commit to purchase a property, several reports should be completed.  The cost of a professional property inspection is minimal compared to the cost of buying a property that requires extensive and unforeseen repairs. 

• Building inpection 

A building inspection will give you an expert's opinion on the consition of the property you're intrested in buying.  The report should detect any significant building defects or problems.

• Pest inspection repoerts

A pest inspection will identify whether there is terimite activity or other pests that might exist in the property. 

• Strata and company title searches

A strata or company title repoet and a copy of the most recent body corporate minutes is important for people buying an apartment, townhouse, villa or any property manages by a company or body corprate. 

This search will show you the history of the property, identify any problems the property has and list past and proposed repairs to other units and the common areas.