Buying tips

1.                  Speak to your bank or finance broker to seek approval in principal for your loan.  This will help you determine what your budget will be and also strengthen any offers you may make on that dream property

2.                  Organise a solicitor to do your conveyancing so that once your offer has been accepted, things can begin to move quite quickly

3.                  Make a list of what you require in your property.  This will help you narrow the field when you’re searching through hundreds of possible property listings

4.                  Know your budget.  There’s no point in wasting your time viewing properties that are out of your reach when you could be spending that time looking at more suitable properties

5.                  Know the area/s that you want to buy in. Do some research on the internet or drive around the area to get a feel for the location

6.                  If you are genuinely interested in the property, try and inspect the property more than once if possible.  Often you will pick up things you didn’t see the first time around

7.                  Check what is included with the sale of the property – for example is the dishwasher part of the sale?  If there is a pool, does the pool equipment come with the property?  This sometimes can affect the offer you might make on the property, and can save you from unnecessary anguish later on

8.                  Plan your weekends. If you have say 10 properties you want to view on the same day, it is best to write a list of the properties addresses and times of the exhibitions to best make use of your day.

9.                  Make notes as you walk through each property. It is very easy to forget things about each particular property when you have seen a few in the same day.  Take a brochure from each property if you can to try and jog your memory

10.              If you can, go through as many other properties in the area that you can to get an idea on realistic prices. Also, use the internet to research recent comparable sales to give you an indication of where to make offers

11.              Use your ‘gut instinct’. Try and picture yourself living in the property. First impressions are usually right, so if you don’t like the property when you first view it, chances are it’s not the right property for you.  On the flip side, however, be prepared to make a good offer on the property if you feel it is the home for you.

12.              Speak to an agent who can work toward finding the right property for you. Maloney’s have a fantastic database full of qualified buyers. Before a property hits the market, Maloney’s contact our database of buyers to advise them of a new listing should it suit their requirements, and more often than not, these buyers get the first opportunity to view the home through our VIP inspections.

13.              Review the contract of sale thoroughly.  If you decide you would like to make an offer on a property, be sure to ask the agent for a copy of the draft contract.  In the ACT, this contract will contain a building and pest report¹ (for houses and class B units) for you to review, as well as the conditions of the sale.  For some units and townhouses, the contract will also include information on the body corporate such as past minutes from meetings and current financial status.  For NSW properties, you would need to obtain your own building and pest inspection.

What happens once an offer has been accepted?

1.                  Often some agents will ask you to pay a ‘holding’ deposit. Usually this is $1,000 is basically a sign of good faith from the buyer.  This deposit does not guarantee you the sole rights to purchase the property and is fully refundable if the sale does not proceed.

2.                  The sales agent will draw up a ‘sales advice’ which includes all the details of the vendors, the buyers, the sale price and conditions of sale, and the solicitors’ details.  This advice is sent to the solicitors as well as a copy to both the vendor and the buyer for their records.

3.                  The vendor’s solicitor will then prepare the original contracts with the buyer’s details and price, and ensure any conditions of sale are included, and one copy is then sent to the buyer’s solicitor.

4.                  If the buyer is using finance to purchase the property they will need to ensure that the loan has been fully approved before proceeding with the sale.  If they are using a broker, they will liaise with the banks on the buyer’s behalf, however if the buyer is dealing directly with a bank, then they need to be sure to keep on top of things as banks can quite often delay the process.

5.                  The buyer will then need to arrange a time to see their solicitor to go over the contract before signing it. Generally at the same time, the buyer will give a cheque to their solicitor equal to 10% of the purchase price.² If the buyer has any concerns or questions before they sign the contract, they should bring them up with their solicitor.

6.                  If the buyer is a first homebuyer, they should ensure their solicitor is aware of this.  The buyer’s financier will generally ask them this question when they are arranging their finance, and will help the buyer complete the application form. However, their solicitor can also assist with this if necessary

7.                  Likewise, if the buyer is eligible for a stamp duty concession, they should also ensure they advise their solicitor of this as application forms will need to be completed, and there may be some stamp duty to be paid.

8.                  The vendor will also arrange to sign their contract.  Once this is done, the contracts are literally swapped between solicitors, hence contracts are now ‘exchanged’.  Generally, from this point forward the sale will proceed to settlement.³ If the buyer defaults on the contract (ie withdraws from the sale) they normally forfeit their 10% deposit. If less than 10% was paid at exchange, then usually this amount is still at risk.

9.                  Now that the property has exchanged, the buyer will need to remain on top of the banks and sign any necessary loan documentation to enable funding to be made available at settlement.  The vendor’s solicitor will advise the buyer’s solicitor of cheque directions (ie the amounts of any cheques and who they are to be made to – for example if the vendor is discharging their mortgage, some of the funds will need to be made out to their bank).

10.              The buyer should arrange with the agent to do a ‘pre-settlement’ inspection.  This gives the buyer one last opportunity to view the property to ensure it is satisfactory and that everything that is part of the purchase is in good working order.

11.              On the day of settlement, both solicitors attend the settlement rooms where the title is transferred from one person to the next, and money exchanged.  Once this is done, the home now becomes the property of the buyer.

12.              The buyer is now entitled to collect the keys and access their property.⁴  Depending on the situation, the keys can be collected from the buyer’s solicitor’s office or from the agent. It is best to discuss this with both parties beforehand.

¹ Please note that in the ACT, upon completion of sale (settlement), the buyer must reimburse the vendor for the cost of the building and pest inspection report where applicable.

² Properties can exchange on any amount of money as agreed to by the vendor and the buyer. Typically the amount is 10% of the purchase price.  The way in which this deposit is paid can also vary, and this will depend on your financial status.  Please contact your financial advisor/bank/broker to discuss your options.

³ Cooling off periods apply in both the ACT and NSW.  Please contact your solicitor for further information.

⁴ Should the property be tenanted, please refer to the tenancy agreement and the Residential Tenancies Act 1997 (ACT) or the Residential Tenancies Act 1987 (NSW) with regard to access.