29 May The 16 Steps that you will take to Buy your New Home
Whether you are a first home buyer or this purchase is one of many, there is a process that you will go through to get you to Settlement Day. I very often find when chatting to Buyers at Open Homes that there is some confusion about the Buying process and I thought that I might put some of the uncertainty to bed today.
Here is an easy guide of what to expect:
1. Research Finance Providers
There are so many banks, building societies and mortgage brokers out there,, so my recommendation would be to ask for testimonials or referrals from family and friends. If you have an Agent that you work with and trust ask their opinion as they deal with people every day that are using finance organisations and have a general idea of who is working best at the time.
Mortgage brokers are great as they take you to a range of places that will offer you a great deal at a low interest rate. In saying that, never discount the bank you do your everyday banking with because they will likely want to keep your business as well.
2. Apply for Finance
Don’t wait until you find the perfect property to apply for your finance. It is essential that you get your finance in place before you start looking. Know exactly how much deposit you will need, how much you can spend on a house and how much it is going to cost you for the loan.
3. Pre Approved Finance
Once you have pre approved finance you are ready to go. When making an offer your offer is much more favourable now in the eyes of the Agent and more importantly the Seller. When a Seller considers offers made to them, a Contract with conditions that include finance that is pre approved has more weight than one without.
4. Research – What do properties actually sell for?
It is essential that you learn what properties actually sell for in the area you wish to buy in rather than what they were on the market for. Using a property data company or asking your Agent for sales reports will help with this. This will help you determine what you should offer when you find your perfect property.
I usually give to my clients access to PriceFinder which I use to compare the market. If you are really nice to me I will give some to you too.
5. Learn about the local markets – Listing Portals
Begin your shopping for the perfect property online. Know what it is that you are looking for?
What suburb or suburbs would you like to live in? How many bedrooms, bathrooms and garages is a start. So is the size of the land?
6. Go to as many Open Homes or inspections as possible
Collect a list of the properties that you have shortlisted. You can favourite them in the listing portal or go old school and grab a notebook and pen and list away.
Make note of all of the open for inspection times and if there isn’t any contact the Agent directly for a private inspection.
If there is no price displayed on these properties you can also contact the Agent via phone or email to ask them for a price guide. This should help.
Have a look at this article for advice on your inspection. http://www.krissyjenkinsproperty.com/look-out-for-these-5-things-at-open-houses/
7. Find the perfect house
Yay! You have had a look at all of the properties that you want to look at and one stands out for you. Now it is time to make a move. My advice is once you have decided throw your hat in the ring so that you don’t miss out.
8. Make an offer
Speak to the Agent as soon as you have made your decision. The Agent will get you to complete and Expression of Interest form or they will get you to go straight to a written Contract.
An Expression of Interest form is literally your name and address etc, how much you are willing to pay for the property, how much deposit you can give and any other conditions of sale that you need to include.
It is very usual to include a finance clause and a pest and building clause as well. Discuss this with the Agent. Keep in mind the cleaner a contract the more favourable it is.
If you are required to complete a Contract the Agent will prepare it generally including all of the details that are on the Expression of Interest form. You will be asked to provide the name of a solicitor at this point. If you do not already have one most Agents can recommend one for your area that is excellent and who works well with their clients.
In regards to how much you should offer. I know that people think that going in with a low offer is the best practice and then negotiating up but I find this can be counter-productive. Discuss with your Agent a likely outcome and put your best offer and conditions forward and go from there. This usually produces the best results especially if there is a multiple offer situation.
9. Sign Contracts
This is such an exciting time. Usually the Agent will get together with you and run through the Contracts and answer any questions for you. He or She will also witness them.
Sometimes if you can not all get together you may receive them in the mail or by email. In this case, you will need to have someone over the age of 18 that can witness your signature for you .
The Contracts are then signed by the Sellers and dated on that date. Then the real work begins.
10. Complete Pest and Building Inspections
As I said earlier a usual condition in the Contract is the pest and building inspection clause. This gives you the opportunity to have the house thoroughly inspected by a Pest and Building Inspector of your choice. This is at your cost.
It is a usual occurance for you to attend at this inspection so that you can talk to the Inspector on the spot as to any findings. They will also provide you with a written report which you can look at in your own time.
If you are happy with the inspection, that is there is nothing unexpected with the property that needs attention and you wish to go ahead with the contract you let your solicitor know and they can make this pest and building clause unconditional.
If there are some problems with the property that come up you may need to discuss this with the Agent and your Solicitor as what to do next. It may mean a price renegotiation or you may choose to pull out of the Contract altogether.
11. Bank Valuation is completed
Once you have the fully signed Contract you will need to provide this to your Bank of choice so that they can start your official application. Make sure you talk to the Bank as soon as possible so they can go through the process with you.
Part of the final Finance Approval is the bank valuation. The Bank will send a Valuer to inspect the property to ensure that it is worth what your Contract suggests it is. The Valuer will usually attend the property with your Agent. There is no need for you to attend at this inspection as it usually just a fact finding mission which is over very quickly. Most of the Valuer’s work is when they get back to the office and they are able to compare your property to other’s that have recently sold.
12. Get final finance approval
The Bank will give you written notice if your final finance application for this property is approved. You will need to provide this letter as soon as possible to your Solicitor so that they can make the Finance clause of the Contract unconditional.
In the event that your Finance is not approved by your Bank provide the letter to your Solicitor. At this point you can choose to let the Contract come to an end or you may like to seek finance elsewhere. Your Agent may know just the person to talk to that can help you.
13. Organise removalists and Organise your Utilities
Yay you have finally got an unconditional Contract and you know that very soon you will be moving house!
As soon as you know dates let your removalist know so they can ensure they can move you on the day you want.
You will also want to organise your electricity, gas, phone and internet to be turned on for moving day. The more time you give the more likely you are going to be ready to move in on Settlement Day or close to it.
14. Pre Settlement Inspection
This inspection is usually carried out a day or two before Settlement with your Agent. It is a quick going over the property to ensure that everything is as it was on the day of inspection and as stated in the Contract.
Check that all included items such as dishwasher and window furnishings, etc are there and once the inspection is finished and satisfactory let your Agent know as well as the Solicitor so that Settlement can go ahead.
If there is any concern make sure you talk to your Agent and your Solicitor and seek their advice.
15. Settlement and handover of keys
Today is Settlement Day at last and your car is packed to the roof full of your favourite things and now you just have to wait for Settlement. Unfortunately, it is not all that exciting a process that you get to see. The Solicitors will meet at a set time and essentially hand over cheques (yes cheques ) and then the deed will be done and you will receive a phone call.
Head to the Agent and pick up your keys and hopefully a nice basket of goodies and the hard work starts of unpacking!
16. Move In!