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10 Crucial Steps to buying a home

If you’re a first-home buyer, congratulations! Now the fun begins!

It’s perfectly normal to feel a little intimidated by buying your first home. That’s why you need to assemble a team of experts to help you including your mortgage broker, a lawyer or conveyancer and local agents.

It can also help to have a roadmap ahead of you so you know what to expect. So below are the critical steps that you’ll be taking on your journey towards homeownership once you’ve obtained pre-approval for your loan. Thousands of people have done this before you, and many thousands will follow. So there’s no need for any anxiety.

1. Property hunting

In all likelihood, you won’t have gone through this entire process without having some idea of what and where you want to buy. Scour real estate websites, sign up to receive alerts when new properties list and talk to agents about pricing trends in your desired area to get a good idea of how far your budget will stretch and how hard you can bargain. Great agents will be a huge help but remember they work for the seller, not you. You can also buy research to validate your assessment

2. Warm up your legal team

As you house-hunt, contact a solicitor or conveyancer to let them know you’ll require their services. It’s best to talk to them early in the process as they can be tremendously insightful. Their role is to help you navigate all the legal documentation, title searches and tax requirements. Don’t do the legal work yourself unless you’re qualified. It’s not worth the drama and risk. A conveyancer will charge around $2000 while a solicitor might be 50% to 75% more. Be aware DIY conveyancing kits are available and while they’re thorough, you’ll be up for every legal error.

3. Property in your sights

Your first actions once you find a property is to ask the agent for a Contract of Sale and seek a building inspection. Check the electrics and for pests, too. Get your legal team onto challenges such as a land or property survey (for a house) or a strata inspection (for an apartment), and hand them the Contract of Sale to examine it for conditions that you may wish to negotiate upon.

4. Start talking money

If everything is in order, feel free to make an offer. The agent must pass it on to the vendor. You can do this if the sale is by private treaty or auction. Don’t insult the vendor. Go in at around 5-10 per cent below the asking price and see what comes back. If the property has been on the market for a long time, feel free to go in a little harder. The vendor may be desperate to sell. If the home is going to auction, you might be able to pre-empt that with a decent bid. Otherwise, you’ll have the stress of bidding against others.

5. Putting down a deposit

When a bid is accepted, or you win the auction, it’s time to pay the deposit. This usually goes to the agent, and your solicitor or conveyancer will ensure it’s held in a trust account, where it will earn interest while the transaction proceeds.

There is an alternative form of payment called a Deposit Bond, which is a guarantee of funds. Effectively, no cash changes hands. But watch out – agents and vendors don’t usually like them. The Contract of Sale might specifically refuse to accept them. Your solicitor will be able to advise you. If you’re using a Deposit Bond, let the agent know in advance. It can get ugly at an auction if a Deposit Bond is refused, as your bid is legally binding and you’ll have to find the cash.

6. Lender Checks Your Choice At this stage, your lenders will inspect the property to make sure you’re not paying too much. If you are, then they’ll not have the security (your prospective purchase) against which they’ll cover the loan amount. This is a real watch-out and where your early research pays dividends.

7. Contracts exchange Your legal team should be completely happy with the content of the contracts, and they will oversee this exchange. There should be no turning back at this point.

8. Legal Eagles Swoop

With contracts in hand, a full investigation of the property will now commence by your conveyancer or solicitor. They will look for any easements on the property, a heritage listing or any other issues related to council compliance orders that the vendor has not stated upfront. This can take weeks and is a little stressful but there’s not much you can do at this point. Actually, there is one thing.

9. Get the property insured

You should get insurance for your new home from the day you own it. The moment ownership of the property is yours, the vendor’s insurance will lapse. So, get that organised beforehand.

10. Pop the champagne

Settlement means that your legal team will pay the vendor and the title of ownership will revert to you. You won’t be able to frame it because the bank will hold it. Your solicitor or conveyancer will notify various authorities so the sale is lodged correctly. You’re officially the owner of a new home!


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