This guide contains all the information you need to know when it comes to buying Real Estate. All procedures such as how to best look for a home, how contracts work, and what you need to know to settle quickly are discussed as well as helpful advice worth noting.
Looking to Buy
It is important to identify the reasons you are in the property market. Are you an investor looking to make a solid return over a certain time period? Are you looking to buy your first home? Or are you wanting to purchase a house that will be your family home for years to come? Whatever you’re looking for, we can help. Contact one of our team members to provide a brief of what you are looking for, and we’ll find it without any cost to you.
Once you have decided the type of house that would be best suited, you should start doing some research. Prepare a shortlist of particular suburbs that suit your lifestyle and facilities that you require. Find out general housing prices in the area and match that with your own financial circumstance. Find out how much time it will take for you to commute to work.
It is important to calculate budgets in order to find out what house you can afford. Loan pre-approval is of great importance. This will save time and give you confidence in negotiations. You should also consider how your mortgage will be structured. How long do you want the term of your mortgage?
Do you want fixed or variable interest rates? How will repayments have an impact on your budget?
Contact one of our Partners to help you with your needs.
Are you happy with the layout? Is there adequate parking?
Is one bathroom enough for your family? Is there enough storage space?
Will your furniture fit into the bedrooms? Are there any obvious defects?
And remember to ask questions and take notes about what you do like and don’t like about the property. The most important question to ask after an inspection is “Can I see myself living here?”.
If you decide to buy at auction, there are certain ways of protecting yourself and getting a great bargain.
Information given at an auction may not be accurate. The agents are acting on the behalf of the vendor, and will do anything to make a sale.
At auction, agents typically under-quote the selling price of a property by up to 20 percent. If a property is being listed at $350 000, the price is likely to be around $420 000.
Don’t let the agent know your intentions
Be as vague as possible. Use expressions such as “maybe” and “perhaps”. Don’t allow yourself to be pressured into revealing your future plans for the auction.
Know the value of the home
Do your research and obtain sales figures from similar homes in the area. You can then use this to guide your decisions on how much the property will be worth.
Obtain legal advice
Consultation with a lawyer may be an expense, but well worth the money when compared to the price of a home you are purchasing. Good lawyers can speak to agents on your behalf or accompany you to auctions.
Don’t bid too soon
Until the property reaches its reserve price, there is no need to bid. This only increases momentum for the price. There is also the case of dummy bidding and vendor bidding. Both practices are used to increase the selling price and make you want to increase your bidding.
Once the reserve price is met, you will know the lowest price at which the vendor is willing to sell their property. Bid only once the property is on the market.
Keep your highest price a secret
You are more than likely going to be the highest bidder before you reach your highest price. Don’t let anyone know your highest price and you can save thousands by waiting for all other bidders to reveal their highest prices.
(Adapted from “Real Estate Mistakes” by Neil Jenman )
Buying Your Home
It is important to put your best foot forward when making an offer. Make a firm offer to avoid confusion. If an agent says that there are other offers on the property, there typically is. This doesn’t mean you shouldn’t make an offer yourself – in fact, the property remains on the market until the vendor considers all offers.
Once you have inspected a property and have decided that you want to purchase it, Clark Real Estate will prepare a contract for you to sign. This contract will include information about the terms and conditions of the loan, the deposit required, and any items to remain on the property such as air conditioner units or antique light fittings.
Once the contract has been signed, you will have a set time period to pay the deposit. The contract will also stipulate the amount of the deposit to be paid. This amount can be as much as 10 percent, but will vary depending on the contract. The vendor should never be paid directly, or have access to the deposit until the house has been sold.
It is important to have these inspections carried out to provide peace of mind that when your new property is settled, there won’t be any surprises. The building component will determine the structural soundness of the building, any significant defects to both interior and exterior, and condition of any improvements. The pest inspection covers all areas of the property including the roof void and sub-floor.
As soon as the contract has been signed, the risk associated with the house is your responsibility. In fact, the contract will state that “the property is at the Buyer’s risk from 5pm on the first Business Day after the Contract date.” So it is important that you have insurance for your property at this point to cover any potential damage.
As part of the conditions of the contract, the sale can be subject to a finance clause. The buyer can specify the time period (typically 14 days) required to obtain approval on a loan for the required finance amount and notify the vendor or their solicitor. Loan pre-approval can make this a smoother process. It’s important to remember that there can be delays and this is part of the process.
Special conditions clauses can also be added to the contract by either you or the seller. These conditions can be anything about the property. It could be as simple as the contract being subject to you obtaining finance, or conditional to a tenancy.
You are entitled to conduct a final inspection before you take possession of the property. This allows you to check that nothing has been changed or damaged in the property, other than the normal wear and tear.
Settlement is the date when you pay the remaining balance of the purchase price and take possession of the property. The keys and the deeds are handed over. Your solicitor or conveyancer will arrange this process and also inform the lender that the property has settled. If cash has been paid, you will receive the deed, or the bank will hold the deed until fully paid if you have a loan.
Conveyancing is the legal process of transferring the property’s title from the vendor to the buyer. This can be either done by a solicitor, or you can do it yourself. Clark Real Estate recommends that buyers use a solicitor as experience has shown that doing it yourself can lead to errors and/or mistakes. Using a conveyancer protects you from the potential of wasting time and money.