Our Buyers Guide
At Raine & Horne Mollymook Milton our team of 9 sales agents have helped thousands of buyers purchase their first home, investment property, upsize or downsize. Property is our life and our experience and national brand is your peace of mind that your purchase is in good hands. Below is some information for buyers that will help you along the way.
Choosing a Property
Buying a property requires a considerable amount of research, time, commitment and planning. The process outlined below suggests simple steps to consider before you start your property search.
How much can you afford?
First, determine how much you can afford and the area in which you wish to buy. Do not set your heart on something you can’t afford. Establish how much you can borrow and afford to repay to get a realistic idea of what you can buy. Researching recent sales and the price of properties currently on the market should give you a good indication of property values and an understanding of the market.
Identify what you want.
Select the location
Choosing the right location to buy is vital because you may be able to add value to the property over your ownership time. If you can’t afford the street you desire, consider neighbouring areas and be aware of any future development plans, which could affect the property’s value or your quality of life. It is important to consider proximity to transport, schools, local shopping, recreation, local facilities and other amenities important to you.
Type of property
A house is likely to be the most expensive type of property but for good reason. You are typically distanced from your neighbours and will generally have a garden. Semi-detached houses, terraces and townhouses usually have an outdoor area and a degree of privacy but they are likely to be noisier than a house due to their proximity to neighbours. Apartments are generally smaller and more likely to be noisier than houses but they tend to be more affordable and easier to maintain. Put together a shortlist of things that are important to you.
When buying a property to occupy, extreme care is needed to ensure your purchasing experience is stress free and risks are minimised.
- Why do you want the property? Does the property suit your needs now and into the future?
- Freestanding home, townhouse, villa or a unit? Or do you want to build?
- How many bedrooms and bathrooms? Will you need more bedrooms in the future?
- Do you want a new or established home? Do you want to renovate?
- If it's been renovated recently, check with the local council to ensure planning or building permits were approved.
- If you have young children or elderly people living with you, you might want to avoid stairs and prefer a level block.
- Is the garden too big or too small?
- Do you need the location close to schools, a hospital or within walking distance to shops?
- Parking is important make sure the property has its own allocated space. Even if you don’t need a car space this feature will add value in the resale of the property.
- If you are buying a villa, apartment or townhouse you might be sharing a common wall with your neighbours. It is advisable to check noise levels if possible.
- Consider trying to meet your neighbours, they might not share the same values as you.
Conveyancing & Inspections
Before you buy
If you want to buy a home or land, you will have to sign a contract. The legal work involved in preparing the sale contract, mortgage and other related documents, is called conveyancing.
Most people employ a conveyancer/settlement agent or solicitor to do legal work involved in purchasing a property such as preparing documents, giving legal advice on contracts and explaining the implications. The conveyancing process can involve the following steps:
- Examining a Contract For Sale.
- Examining a strata inspection report, if the property is part of a strata scheme.
- Arranging payment of stamp duties.
- Checking any outstanding arrears or land tax obligations.
- Finding out if any government authority has an interest in the land or if any planned development could affect the property.
- Finding out any information that might not have been previously disclosed, e.g. a fence dispute or illegal building work.
- Calculating adjustments for council and water rates for the property on settlement.
- Completing any final checks prior to settlement.
- Attending settlement.
- Arranging payment of stamp duties.
- Overseeing the change of title.
- Exchanging Contract For Sale and paying the deposit.
- Assisting with arranging finance, if necessary.
- Arranging building and pest inspections.
- Preparing and examining mortgage agreement.
Your agent can explain this process as it applies in your state or territory.
Before you commit to purchasing a property, several reports should be completed. The cost of a professional property inspection is minimal in comparison to the cost of buying a property requiring extensive and unforeseen repairs. The most common reports requested are building inspections and pest inspections. A strata or company title report is important for people purchasing home units, as is a copy of the most recent body corporate minutes.
A building inspection will give you an expert’s opinion on the property’s condition and detect and identify any significant building defects or problems. The consultant will inspect:
- Interior of the building
- Exterior of the building
- Roof space
- Under-floor space
- Roof exterior
If problems are identified you can get specialist advice, ask the vendor to have the problems repaired, or try to negotiate a lower price.
Pest inspection reports
A pest inspection will detect whether there is any termite activity, any other pests, old damage caused by pests and wood rot.
Strata and company title searches
If you are buying an apartment, townhouse, villa or any property managed by a company or body corporate it is important to arrange a strata or company title search. This search will show you the history of the property, identify any problems, list past repairs and proposed repairs to other units and common areas. This information is important as the cost of repairs to common property can be substantial and owners normally share the cost.
Sale & Settlement Contracts, Cooling Off Periods & More
Buying at auction
Before you bid at auction you must understand the process and satisfy yourself about all the details relating to the property. If you are the highest bidder and your bid is accepted, you are obliged to purchase the property.
If buying at auction you should have:
- Decided on a definite upper limit you are prepared to pay
- Conducted inspections
- Had legal documents checked by your solicitor/conveyancer
- Organised a bank cheque for the deposit
- Had finance pre-approved
As conditions of sale by auction might differ between state and territories our agent can explain the conditions applicable in our local area.
Bidding at auction
In NSW, prospective purchasers wanting to bid at an auction for residential and rural property must register by giving their particulars to the selling agent before they are permitted to bid. Bidders are issued with a bidder’s number, which must be displayed when making a bid.
The vendor or the auctioneer on the vendor’s behalf may make one bid which, must be accounted for during the auction. This is called a ‘vendor bid’.
If the property fails to reach the reserve price it is passed in. As a courtesy, the highest bidder is usually given the first opportunity after the auction to negotiate further with the vendor through the selling agent. If the highest bidder does not purchase at the reserve price the property will typically be put back on the market for sale by private treaty.
- Attend similar auctions in the month leading up to your auction to better understand the system.
- Get a feel for the bidding process before you start.
- Establish a limit of how much you’re willing to spend for the property.
- Know what’s happening around you. Don’t hide or the auctioneer might miss your bid.
- Bid with confidence. This shows people that you’re serious about buying.
- The auctioneer will set the bidding increments, depending on the price bracket of the property. Bid in these increments if you can and don’t raise the price unnecessarily.
- When the bidding slows or stops at a figure acceptable to the vendor, the auctioneer may announce that the property is to be sold. The auctioneer will repeat the price several times before the hammer comes down and the property is sold.
Before the auction the seller will nominate a reserve, which is the lowest they are willing to accept. The reserve price is not revealed to buyers.
If a property fails to reach the reserve price the property can be ‘passed in’ or withdrawn from auction. The agent will then negotiate with the highest bidder on behalf of the vendor. This may result in a sale.
Purchase at auction
If you are the successful bidder, you must sign the sale contract and pay the deposit immediately (usually 10%). A cooling-off period does not apply if you buy at auction so it is imperative you arrange finance prior to auction. Conditions of sale by auction differ from state to state. Our agent can explain the sale by auction conditions in our area.
Other Essential Information
Contract of Sale
A residential property cannot be sold until a contract has been drawn up. A contract for sale sets out the terms and conditions of the sale. A buyer can examine the contract at any time during the buying process, even before an offer is made.
Making an Offer
Deciding how much to offer can be difficult. You might wish to make your best offer up front or start with a lower offer and be prepared to negotiate up. However, other purchasers who make higher offers might secure the property without giving you the opportunity to increase yours.
- Offers should be made around the current market price. Offers well below market value will not be taken seriously and the vendor might even refuse to deal with you further.
- Ensure your finance has been approved. A vendor is only interested in serious offers that can be fulfilled.
- Put your offer in writing and give it to the real estate agent. The agent is obliged to forward formal offers to the vendor.
Once your offer has been accepted or you have purchased your new home at auction, contracts must be signed between you and the vendor. There will be two contracts – one for you and one for the vendor – that both parties must sign.
Exchange of contracts can be done in person or by post and is usually arranged by your solicitor or conveyancer. Our agent will explain how the process works in NSW.
When contracts are signed by both parties you will have to pay a deposit, usually 10% of the purchase price. This is paid to the seller’s real estate agent or solicitor who will put the money into a trust account ( non-interest earning ) until settlement when the balance is paid.
Cooling Off Period
In some states in Australia there is a cooling off period of 2-5 working days after the exchange of contracts during which you can withdraw from the sale. During the cooling off period it is common and permitted for buyers to organise inspections, e.g. pest or building inspections.
There may be a cost incurred for buyers who withdraw from the sale within the cooling off period. It is possible to waive, reduce or extend the cooling off period with the consent of the seller.
There is no cooling off period for sellers or buyers who have purchased at auction.
Our agent will explain the process and legal requirements applicable in NSW.
In some states the property is at the risk of the purchaser from the date of signing the contract. If this is the case in your state you should immediately arrange insurance. Your agent can explain this requirement to you.
The sale is finalised when the balance of the purchase price and other adjustments have been paid and the title and transfer documents have been exchanged. Settlement usually occurs five to six weeks after contracts have been signed by both parties. At settlement you become the legal owner.
Stamp Duty is a government tax that must be paid prior to settlement. It is calculated as a percentage of the sale price or the market value. Stamp duty exemptions may apply for first home owners or concession card holders. Our agent can explain the Stamp Duty payable in your NSW.
Organisation the Key to a Smooth Move
Before the Move
- Select removalist. Get two or three comprehensive quotes. Ensure you discuss insurance.
- Have a supply of notification cards – it’s the best way of informing people about your change of address.
- If renting, advise the owner or managing agent, giving the required notice in writing.
- Advise gas, electricity and water providers. Arrange final readings, the disconnection of each and then arrange for reconnections at the new address.
- Advise Australia Post and have your mail redirected to your new address.
- Advise telephone and internet providers for disconnection and reconnection of services at your new home.
- Advise the Australian Taxation office of your new address.
- Go through your wallet and look at your cards to see what other organisations you need to notify
- Advise the RMS - road authority for your registration/licence.
- Advise Medicare of your change of address.
- Advise banks, credit card institutions, credit unions and finance companies.
- Advise insurance companies (house, contents, life, income, health, car).
- Advise solicitors, stockbrokers and superannuation firms.
- Advise the Australian Electoral Commission.
- Establish which local council area you will be moving into and they will be able to inform you which day the garbage is collected in your area.
- Advise dentists, doctors and other health specialists. Establish the nearest medical centre to your property.
- Advise any publication subscriptions (newspapers, journals, magazines etc) of your change of postal address.
- Close or transfer club memberships, eg video, gym, sporting clubs.
- Why pay to move items you no longer want? Start afresh. It is amazing the number of things you will discover that you don’t need. Consider having a garage sale. Sell items online or donate the rest to charity.
- If you plan to do some or all of your own packing, start well before your moving date but not until after exchange of contracts. Start with seldom used articles. Make sure you label or colour code each box and nominate which room it should be placed in.
Last Week Before the Move
- Cancel all delivery services, such as the newspaper, fruit & vegetable or pharmaceutical deliveries.
- Tidy the garden, cut the lawns and remove any rubbish. It is wise to empty fuel from lawn mowers, lamps and fuel heaters. Also empty any gas bottles – they have been known to explode in removalist trucks and for this reason they will not relocate them.
- Collect/return anything outstanding, e.g. dry cleaning, items in for repair.
- Confirm arrival time with removalist.
- Arrange a permit for on-street parking (if required).
- Defrost fridge the night before your move.
- Don’t forget to say goodbye to your neighbours.
- Organise to have the carpet cleaned before you move.
- Keep valuable documents and keys handy.
- Make a final inspection to be sure nothing has been forgotten.
- Look through cupboards, garden sheds and the garage.
- Ensure everything is turned off and locked.
- Supervise placement of furniture and boxes.
- Check telephone, electricity and gas are all connected (in your new home).