Many first homebuyers have trouble knowing where to begin when it comes to purchasing property. To put yourself on the right track from the beginning it’s always good to know what you’re in for. You should head into the property purchase process with a clear idea of what is expected of you. I have put together eight simple steps to assist potential home buyers understand the who, what, when and where, of successfully entering the property market:
Step 1: Know how much money you are willing/able to contribute You first need to work out how much money you have available to contribute to the deposit and purchase costs on your potential new property. On top of that, you will likely need additional funds after the purchase is complete to cover other costs associated with home ownership such as land tax, strata fees, council rates, water consumption, insurances, maintenance and any possible moving costs.
Step 2: Investigate how much can you borrow Visit your local mortgage broker to research how much money you can potentially borrow from a range of different lenders. This will also give you the opportunity to find out about the different types of loans available to you, and which ones will be suitable to your financial needs. Many people also apply for pre-approval of a loan, which can help you get a better idea of your financial limits before you start hunting for your ideal property.
Step 3: Property hunt with the right price in mind Once you know how much money you will have available for the purchase, you can start researching the market for suitable properties. Real estate agents, property advisors and reputable property websites can assist you in thoroughly researching what you can get for your money.
Step 4: Once you’ve found the right property, know what’s next At this point, it might be best to engage a legal adviser (solicitor/conveyancer/settlement agent), who can assist you through the legal aspects of the purchase process. Your adviser can also look over the contract of sale for any possible issues. You may also have building and pest inspections done on the property to check for serious defects, before making an offer/bidding.
Step 5: Place a bid You now need to organise to be able to place a bid at the auction, or if it is a private sale, negotiate directly with the seller or through their real estate agent to make an educated offer on the property. Before doing so, you may want to arrange an independent property valuation beforehand to ensure you are aware of the property’s market value.
Step 6: Sign on the dotted line If purchasing at auction, the contract is immediately signed and the deposit is paid (which is typically 10% of the purchase price, but can often be negotiated with the seller and their agent). With a private sale, you need to wait for the seller to accept your offer, and then you will be expected to sign the contract and pay the agreed deposit amount. If money isn’t readily available for the deposit, your mortgage broker may help you organise a deposit bond. Once the contract has been signed, your legal adviser will liaise with the seller’s adviser and the lender to meet and satisfy all the legal requirements. Once the process is complete, you should send a copy of the contract of sale to your mortgage broker.
Step 7: Time to make things final If you haven’t yet obtained unconditional loan approval, now is the time to do so. Keep in mind that the lender will often wish to value to property before they decide what loan amount they are prepared to provide against the property. Step 8: Settle into your new home Finally, the contracts have been signed, the remaining funds are paid over and the property is yours!
For more information contact Richard Windeyer on 1800 01 LOAN or click here to "Book a Meeting"