You have seen the market rise, stumble and maybe fall in the area you want to buy in and you’ve been saving you pennies for a deposit. You may be a first home buyer, an investor or a rentvestor, but the fact is you are ready to jump. What now? Here are 4 tips to make the transaction go smoothly.
Get your financing in place first
With mortgage preapproval, you will know exactly what to look for and in which neighbourhood. Many first-time homebuyers are eligible to save money through a First Home Owner Grant scheme (“FHOG scheme”) or alternatively through the First Home Buyers assistance Scheme. Make sure to explore this with your lender.
Take legal advice
What is the difference between a conveyancing solicitor and a conveyancer? Many first-time buyers on a limited budget consider working with a conveyancer, who may charge a lower fee rather than a conveyancing solicitor. At the risk of sounding self-serving, this may not be wise for the property purchasing novice. A solicitor is professionally qualified to deal with any unforeseen legal issues that may arise. Once you own a home, you really should also be thinking in terms of a larger financial plan that might include a will and retirement planning. Working with a financial professional and an attorney to lay the groundwork early is better than playing catch up later on.
Choose a solicitor who is available to answer questions about cost, financing, inspections, timing and paper work. If an answer is not clear, do not be shy about asking again. Remember that your solicitor works for you.
Estimate your costs
Do your researchwhen it comes to making cost estimates. Ask your solicitor and real estate agentto provide detailed written cost estimates throughout the process. Expect the costs to change up until the day of settlement, but the margin of variation should narrow considerably. No one likes an eleventh-hour surprise.
Understand the five phases of a property transaction
Once you have your financing and your advisers and have located the property you want to buy, expect your transaction to go through five phases.
1) Exchange of contracts: The seller’s agent or solicitor generally drafts the contract of sale, and your solicitor will review it and negotiate changes if necessary.
2) Searches and inspection: Your solicitor will order and review the property searches, including a title search, zoning search, strata plan search and a historical search, as well as physical inspections for pests or other issues.
3) Pre-settlement: This is when costs are calculated. In addition to the purchase price, the total cost of the transaction may include mortgage fees, certificate fees charged by utilities and schools, adjustment for council and water rates, stamp duty and the GST.
4) Settlement: This is the big day, when ownership finally passes to you.
5) Post settlement: There is generally some clean-up work, usually done by the lending institution, involving notifying the relevant authorities of change in ownership and lodging Transfer documents.
Buying your first home should be an exciting milestone, and so with careful planning and preparation, you can celebrate stress-free, knowing that it is a well-deserved achievement.
It should be noted that the above is a general outline and every transaction has the potential to throw up circumstances that still surprise me to this very day, however, having the right team around you will mean that the impact of that surprise is minimalised.
Steve Purcell is located at our Head office and is the licensee of Launch Properties. He holds a PSBA License, is a licensed Auctioneer and holds a Master’s Degree in Business. Steve brings an extraordinary depth of hands on experience to the role, including twenty years in commercial and residential construction, followed by ten years in residential Real Estate sales and property development. This unique blend enables Steve to provide advice on selected developers, to ensure they are providing functional, quality assets with high quality finishes to mitigate potential sector risks to our clients. Become a client of Steve’s and get access to RP Data suburb reports, market valuations and advocacy options.
To speak with a property expert, call our team on (02) 9009 2428 or email: firstname.lastname@example.org