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Do your homework before you make an offer – take the time to compile an accurate and detailed budget to ensure that you can service a mortgage and that you fully understand the impact a mortgage has on your current financial commitments.
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Pre-approval of your home loan – before you make an offer, make sure that you have been granted a pre-approval by your lender for your loan. Once an offer is made most vendors require a holding deposit and if you fail to get finance approval, you risk loosing your funds.
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Consider mortgage product alternatives and understand all the fees and charges – today there are more products to choose from then ever before and it’s important that you speak to your broker or lender to ensure that you have the best product to suit your needs, and that you understand the fees and charges associated with it.
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Employ a conveyancing solicitor – A conveyancing solicitor will help you with the legal documentation required to buy a house. It is important to have a conveyancing solicitor look over the property contract and advise you on any abnormalities or concerns before you make an offer.
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Make an offer – once you have inspected the house, found a house that you can turn into a home and have received feedback from your solicitor in relation to the contracts, you can then make an offer. Be prepared to negotiate. Don’t offer the highest amount you can afford at the first stage and be prepared for a counter offer. It is important to know that there could also be others making an offer at this stage. In some cases, the vendors may choose to hold an auction. If this is the case, speak to your solicitor about any financial or legal implications of buying this way.
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Your offer has been accepted, time to cool off – this will differ depending on your state. However, once your offer has been accepted, the next step is to sign the contract. This is the legal part of the process and is facilitated by the vendors’ real estate agent. In most states, except WA, there is a "cooling-off period" of up to five days but you can ask to have this period extended if needed. During this stage it is important to conduct full building and pest inspections and in some instances, a council inspection. Your solicitor can help to organise this and can assist you with any questions once the reports are received. You will also need to ensure that you have received full formal approval of your mortgage from your lender which will require documentation verification and a full valuation of the property. Do not proceed without this because it may mean that you risk loosing the 10% deposit required at formal contract exchange.
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Formal contract exchange – once the five-day cooling off period has come to an end, formal contract exchange is required. Your solicitor will prepare the necessary paper work. The important thing for you is to have ready the required 10% deposit which needs to be forwarded to your solicitor who will then complete the process.
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Settlement Period – This is typically a 30-90 day period from when you sign the contract to when you take legal possession of the property. The length of the settlement can be negotiated to a period that suits both you and the vendor, and your solicitor can assist with this negotiation. During this period, your solicitor will orchestrate all property searches and the transfer of title on the property.
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Stamp Duty - Your solicitor will coordinate the mortgage papers and will prepare the necessary documentation required for the settlement day. You solicitor will also require the payment of Stamp Duty to the Office of State Revenue. Stamp Duty typically must be paid on or before settlement and is calculated on a sliding scale based on the purchase price. If you are a First Home Buyer, you may be eligible for Stamp Duty exemptions. Speak to your lender to see if this applies to you.
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Take possession of your property and move in – Once settlement has taken place you can then move into your new home. Congratulations and enjoy!
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