Bathurst Blog

So you have decided to enter the property market. You float the net, browse the paper and there it is. You see the property of your dreams – but what’s the next step? On average from the time you make an offer on a property to the day you move in – around 8 weeks has turned over. But what happens in this time, and what should you be ready for?

Firstly sort your finances. See a bank or a broker and get preapproval in place so that you know your budget. Having an idea of your finances before you kick off house hunting can help you and your agent hone in on your dream home. Preapproved finance removes the risk of disappointment, and allows you to move forward on a property quickly.

With your finances in check, request a copy of the contract. An agency must have a contract to advertise a property – a contract is not confidential, and you can request it at any time.

Make your offer. Once you make your offer, negotiations will begin to take place. Negotiations between purchaser and vendor take place until they come to an agreement on price and that officially puts the property under contract.

From this step you will typically engage the services of a solicitor or conveyancer who will work through the contract process with you. This process is highly recommended. The contract is the nuts and bolts of what the property is; it details any easements or issues the property has. Uncharted territory for the average person, a solicitor will work through this with you and go over any inclusions or help negotiate any settlement periods.

From here, around 9/10 people will then organise a pest and building inspection. This is in no way compulsory for every sale, however you may find that some banks will request it as part of loan terms. An inspector will go through the property to inspect for leaky showers, termites or anything not noticed by you as a general consumer. The inspector/builder will produce a report based on this inspection. Don’t panic when you read it. These reports typically host an abundance of information, many of these disclaimers, which can be overwhelming at first view. Relax – your dream house isn’t falling down. Take your report to your solicitor/conveyancer and they will go through the details with you. Once you’re satisfied, you move on to unconditional approval.

This process happens mostly between the bank and your agent, where your bank will have a licenced valuer assess the property. This is performed so that the bank can resell the property in the event of a default. The process of securing unconditional finance usually takes place in the event of you borrowing over 80% of the mortgage amount. The process can take up to 3 weeks depending on your banks backlog. During this process your bank will require payslips, proof of ID, statements etc. So the message again here, is be prepared.

So here we are, 3 weeks in – you should be ready to exchange contracts. You have met with solicitor to go through the details; you have your unconditional finance and you are ready to sign.

Now we’re really cooking with gas. At this stage there are three major parties involved; you as the purchaser satisfied with pest and building inspection, the bank satisfied with your loan approval and the solicitor satisfied with the contact. We move now towards the final stages – exchange.

Once the deposit is paid and the contract is signed, the contracts are exchanged. Now you may have visions of a room of people shaking hands, tickertape parades and synchronised jet flybys – but in a very unromantic fashion this simply means that the purchasers solicitor and the vendors solicitor come together to sign and date the contract. Done. With this being the final step you are now locked in to buying the property. There is the possibility of the purchaser pulling the pin at this stage however if this happens, they run the risk of loosing their deposit - which is traditionally 10% of the payment. Up until exchange however, the deposit is refundable with no penalty on the purchaser.

On average, the time from exchange to the collecting the keys is 35 days/5 weeks. During this time very little takes place from a vendor/purchaser point of view - except for that little task of packing boxes. Settlement times can vary with either party opting for a quicker or delayed settlement, but this is predefined in contract negotiation. It again begs reiteration the importance of organisation. If you know you will need a delayed settlement, negotiate this at the start of your process – as from the vendors perspective this may mean an extra 3 months of mortgage payments.

The main thing to remember here is preparation. Know your budgets, be organised and work closely with an agent you trust. You aren’t expected to be an expert at this – but your agent is. They can provide you with a list of local finance, brokers, banks, solicitors and inspectors as well as being there every step of the way. Buying a home is an exciting time for anyone who’s in the market so make a list, make a call and start your search today.