Steps in Purchasing a Property

If you are a first home buyer or you have not purchased a property for some time here are some basic steps that will help in purchasing a property in Australia.

Home Loan Pre-approval

The first step is to organise a home loan pre-approval with your preferred bank or lender. If you are a first home buyer, check your eligibility for the first home owners grant. It is preferred to organise a pre approval as soon as possible so you can begin looking for a property knowing exactly how much you can borrow.

Finding The Right Property

Spend some time researching the property prices and the right suburbs. When you find the property that might be "the one", carefully conduct the inspection and look at all the positives and negatives.

Making an Offer

When you find a suitable property, it is time to make an offer. When making an offer, there are two things to keep in mind: don't get emotionally attached and be prepared to walk away. The negotiation process depends on the type of the property and the current market demand. If the demand is high, then the seller is less likely to move away from the asking price. Negotiate the price with the real estate agent and the seller.

Signing the Contract

When making an offer, the real estate agent will ask you to go though the contract and sign the required sections. First and foremost, read the contract slowly and carefully. Ask questions if you are unsure of anything in the contract. Choose a settlement date, this date can be negotiated with the real estate agent and the property owner, the date can be 30 days, 40 days or 50 days it is entirely up to you. you will also be required to arrange a finance date before the contract goes unconditional. The finance date can be 7 days, 14 days, 21 days or 30 days, the date is entirely up to you.

The Contract is Accepted

If the contract is accepted by the seller. The real estate agent will ask for a deposit. The deposit is negotiable but $1000 is usually acceptable. You will also be required to contact your Bank or other lender to proceed with finance. Organise a meeting with your loan manager and discuss your loan and interest rate. This will be the right time to arrange for home insurance of the property you are purchasing. Organise a conveyancer or a conveyancing solicitor (approx. $1200). Organise building and pest inspection (approx. $450). Your home loan lender will arrange for valuation of the property. If the property valuation is below what you agreed to pay, then your home loan lender might ask you to re-negotiate the contract with the seller or to make up the difference.

Contract is Unconditional

When your home loan lender approves your home loan and the building and pest control has passed then your contract becomes unconditional. Some real estate agents might ask for a secondary deposit that can be $10,000 or more when the contract is unconditional. Your conveyancer and the home loan lender will guide you through the rest of the process.

Good luck with your next property purchase.