Finding a Property You Like
Congratulations! After all your hard work and perseverance you have found a property that you want to make your home. There are still a few steps to go through before it finally becomes your home so it’s important that you read more about what is involved in this section.
You might want to consider utilising the services of a solicitor/conveyancer at this stage.
Get the Contract of Sale Checked
Once you have found the property you want to buy, ask the agent or owner for the contract of sale and you should have your solicitor or conveyancer check the document. Your solicitor or conveyancer will explain the contract to you.
He or she may recommend a change to the contract. If you need to find a solicitor or conveyancer you could ask your acquaintances and colleagues if they can recommend someone, or refer to the Yellow Pages.
Professional Property Inspections
Once the contract of sale is deemed acceptable, you may want to have a professional property inspector check the property you intend to buy to provide you with peace of mind. Don’t be tempted to skip the inspections if you’re worried about the cost.
Check that the companies you choose are fully licensed and insured. Depending on the type of property you are buying, consider making the following inspections:
- building inspection (at a separate cost to you)
- pest inspection (at a separate cost to you)
- electrical inspection (at a separate cost to you)
- land survey (the vendor may already have a copy of this and, if so, it is not essential for the purchaser to obtain this survey) – discuss with your solicitor/conveyancer how to arrange this
If you discover problems with the property (e.g. rising damp, white ants, sinking foundations) and you are still interested in buying the property you can ask for a reduced price, or ask that the problems be rectified. Alternatively, you may decide not to purchase the property because of the extra hassle and cost of fixing the problems.
A qualified building inspector will check the interior and exterior of the building, including the roof, subfloor (if accessible), fences and garages. Some of the things he/she will be looking for are:
- cracks in interior and exterior walls
- structural defects
- presence of asbestos
- electrical or plumbing faults
- ventilation, damp
- drainage problems
- condition of windows, carpets, walls, fittings etc.
But remember that a building inspector, no matter how good they are, won’t find all the potential faults with a property especially if they cannot access certain areas.
A pest inspector will check the property for signs of damage by borers and termites, and assess the extent of the damage. There may be evidence of live termites/borers or past damage. The inspector may be able to give you advice on how to get rid of the pests and the cost, as well as any other ongoing problems that it may present.
This inspection will check such things as the size of the land, orientation, boundaries and compare it with what is in the contract. It will also check the gradient of the land, assess water drainage issues, and identify any easements etc.
Buying a House
How do you make an offer on a property that you’d like to buy? When should you pay a deposit? What is the difference between an auction and a private treaty sale?
This section focuses on some of the things you need to consider when you are ready to show a genuine expression of interest in a property. You’ll need to liaise with a few people at this stage, such as your home loan provider to make sure your finances are in order, the real estate agent selling the property and your solicitor/conveyancer.
Buying a House Through Private Treaty
Private treaty sales are the most common way for property to change hands. This involves a real estate agent, or with property for sale by owner, the owner themselves, setting an asking price.
The property is put on the market and a buyer is sought. The price is often negotiable.
When you have found a house to buy or bid on, you may want to notify your bank/broker and solicitor or conveyancer first to make sure everything is in order and they are on hand to help you once you successfully make an offer.
How to Make an Offer
If you wish to buy a property, you make an offer to the real estate agent, who then talks to the property owners. There is usually some negotiating of price, and if both parties are happy with a price, a contract of sale is signed by both the vendor and the purchaser.
This is called exchanging contracts and this is when you put down a deposit.
With private treaty sales there is a legislative cooling-off period after the contracts have been exchanged (unless the period has been waived at the election of the buyer). This means that the purchaser can change their mind and decide not to go ahead with the purchase.
The purchaser must inform the seller in writing, and the deposit will be returned. However, the vendor may be entitled to retain 0.25% of the purchaser’s price. This may vary depending on the type of purchase, the contract and the state/territory you are in.
Buying a House at Auction
An auction is when prospective buyers come together and bid on a property, with the highest bidder being successful, subject to the bid exceeding the seller’s reserve price. Auctions can be very emotional, and it is important not to get swept away by the exciting atmosphere and offer more than you can afford.
In some states, to bid at auction you must first register with the agent selling the property and obtain a bidder’s number. You will need to show some form of identification e.g. a driver’s license.
When the auction begins, you must display your bidder number each time you make a bid.
How the Auction Starts
The auction will begin at the allocated time with the auctioneer welcoming people, and announcing that he or she will start the auction. Some details about the property will be read out such as the address and some of the key features of the property. The auctioneer will then ask for an opening bid. The vendor may make a vendor bid to get the ball rolling.
How to Bid at Auction
Once the auction is in progress you can make a bid at any time, either verbally or non-verbally, by raising your hand or nodding your head (and displaying your bidder number). The auctioneer normally informs people of the increments that you can bid on. At the beginning it’s not unusual for bidding to be made in $10,000, or sometimes $20,000 increments.
When you feel like slowing the increments down, you can offer an increase of $5,000 or less (e.g. $1,000). However, the agent can ask that bids be kept at $5,000 increments, but if bidding stalls, they may accept $1,000 and even $500 increments.
What Happens When Bidding Stalls?
When bidding stalls, the auctioneer consults with the vendor to ask if the reserve price has been reached. The auctioneer will then announce either that the property is now on the market or that it has not reached its reserve.
If it is on the market, bidding continues until it stalls. The auctioneer will then solicit final bids, repeating the highest bid. If there are no further bids he or she will say Going, going, gone or Going once, going twice, going three times, sold! And, bring down his or her hammer (or hand) on the word gone or sold. The property is then sold to the highest bidder. When bidding does not reach the owner’s reserve price the property is not sold. The house is then considered to be ”passed in”. If the house is passed in, the highest bidder usually has first opportunity to negotiate with the seller and the agent.
What Happens If Your Bid Is Successful?
As the successful bidder, you will be required to sign the contract and pay a deposit on the spot, usually 10 percent (however, you can negotiate with the seller to put down a smaller deposit prior to the auction). So don’t forget to take along a cheque book, deposit bond or some other means of payment. It’s best to check with the real estate agent before you attend an auction as to what form of payment is required on the day.
Auctions automatically waive any cooling-off period. Be aware that once you sign the contract, if you do not continue with the purchase, you will lose your deposit. You may also be liable to the vendor for the deficit realised on the sale of the property within 12 months of the auction and reasonable costs associated with that sale, or you may be sued by the vendor for breach of contract.
Once you have exchanged contracts you can breathe a sigh of relief and congratulate yourself on your new purchase! Conveyancing is the next step in the buying process – which is the process where a property is transferred from one party to another. This is usually done via a solicitor or conveyancer.
How Long Does Settlement Take?
The length of time between exchange of contracts and settlement varies. It normally ranges from four to six weeks. Settlement time is normally dictated by the seller and the banks providing the mortgages, but is negotiated with the buyer.
Final Property Inspection (Before Settlement)
Normally, a day prior to settlement, the buyer should visit the property for a final property inspection to make sure that it is clean and that all fixtures and fittings that were sold as part of the sale are still there e.g. dishwasher, TV antenna etc.
If it’s not in the contract of sale, don’t assume it will be there when you move in! If there are any issues with the state of the house on final inspection, your solicitor or conveyancer may be able to help you resolve your issues.
What If There Are Problems?
If at any stage you experience problems with the buying process, you may want to contact your solicitor or conveyancer who might be able to answer your questions or guide you in the right direction.
Your Lender May Require Insurance
Some lenders won’t lend you money unless the building is insured. Depending on the arrangements with your lender, you may not have the loan monies advanced to you until the building is insured. You are not obliged to put insurance into effect until the date of settlement, however, your lender may require evidence of insurance prior to settlement.
Finally, settlement day will come, when you or your representative will discuss adjustments to rates and other payments involved in switching property ownership and will hand over a cheque (or series of cheques based on the required disbursements) in return for the title of ownership. Relevant authorities will be notified about the change in ownership by either your solicitor or conveyancer.
Conveyancing is an important step in the buying process. It is the process of transferring a property from one party to another. This is usually done via a solicitor or a conveyancer. Solicitors are usually the more expensive option, but can provide you with a wide range of legal advice in relation to property, wills etc. It is a good idea to research solicitors and/or conveyancers in the local area and call for a quote.
Planning Your Move
The contracts have been signed and the property you have purchased is about to become your home. Now you`re ready to move from one home to the other. This section looks at how you can find a removalist, or what to consider if you decide to move yourself. You will also read about the option of insuring your possessions during your move and most importantly, letting people know your new address!
Moving to a new home is a huge logistical exercise, but with proper planning you can reduce some of the stress involved. Once you have exchanged contracts you should start planning the logistics of the move.
The best way of finding a good removalist is to get a referral. Failing that, you can find a removalist via the internet or the Yellow Pages. Using the internet is a very quick and efficient way to research the range of services offered by each company. Most removalists have a free online quote service, where all you have to do is enter all your details, and a quote will be emailed to you within 24 to 48 hours. You might want to get between three and four quotes before choosing a removalist.
Moving Home On Your Own
If you have friends or relatives that are willing to help you move, you could hire a van or truck and do the move yourself. You`ll need to work out how many cubic feet of non-boxable and boxable possessions you need to move so you know what size truck to book. Don`t book open trucks, it`s bound to rain!
Hiring a truck is relatively simple. You might want to get three or four quotes from different truck hire companies and compare the benefits and costs. Source boxes as well, often truck rental companies can help here. You will need to know how to manoeuvre and lift heavy items and have the right equipment e.g. trolleys, caster wheels, blankets, ropes, etc. If you need to hire moving equipment to help you move large items (e.g. trolleys, blankets, ropes and pads) you can find various companies listed on the internet (search for moving equipment). If you need to organise storage, source quotes and select a company.
Consider whether you need to take out insurance for your furniture and other household items while they are in transit from your old property to your new property. If using a removalist, ask about the level of coverage that you will receive and the cost. Insurance normally covers the cost of any damage or destruction of your property during the moving process, although you should carefully read the insurance policy to find out exactly what is covered. You may also want to check that it covers theft.
Australia Post can redirect mail from your old address to your new address for a specified period of time. Simply complete and lodge an application to redirect mail in person at any Australia Post outlet. Then when you receive your redirected mail you will be reminded as to which companies you still need to notify about your address change.
If you’re moving house – connectnow is a free, easy to use service that helps you to find suppliers in your area and arrange them all in the one spot. This service extends to connections for: electricity, gas, internet, phone, pay TV, and water. They can also get quotes on bottled gas, a removalist, car and truck hire, cleaning and more. You can click on this link http://www.connectnow.com.au/ or call them on 1300 554 323.