Home Buying Process
So,you are considering becoming home owners? Congratulations! At Mortgage Empire, we want to make sure we take the hassle out of the whole process – as owning your home can seem like a daunting exercise at first. Here are the 20 main steps to buying a house.
1. Decide To Buy +
- There are many advantages in buying, as there are with renting a property. So, first you need to decide whether you like to continue to rent or you are ready to buy. We can guide and help you to make this decision.
2. Understand Cost Associated With Buying A Property +
- There are significant costs associated with buying a property such as legal cost, bank fees and charges, stamp duty, insurance cost etc. Mortgage Empire Loan Expert will work with you and will explain all associated costs in advance, so you are fully aware and do not get surprises at the end.
3. Understand Government Grant and Stamp Duty Exemptions +
- In Australia most States and Territories have first home buyers grant available to first home buyers like yourself. In addition, you might be also eligible for stamp duty exemptions. Mortgage Empire Loan Expert will explain these to you in clear and easy to understand language.
4. Loan Pre-Approval +
- Once you have decided to buy, please contact Mortgage Empire Loan Expert to discuss various loan options and features suitable to your circumstances and requirements. We highly recommend getting loan pre-approval prior to searching for your first dream home. This allows you to be confident about how much you can borrow and property price range that you should target.
5. Select Property Conveyancer/Solicitor +
- Buying property involves legal work, which you can do this legal work yourself (there are DIY kits available) but this is not recommended for most buyers, particularly first home buyers. It’s a far better idea to employ the services of a solicitor or professional conveyancer. Do not worry if you do not have a solicitor or professional conveyancer, Mortgage Empire Loan Expert will help you to find one.
Ask for a quote first and compare prices. Most solicitors charge a fee calculated on the price of the property, the type of title and the mortgage or complexity of the deal. Others may charge an hourly rate on a ‘time spent basis’.
Solicitors are sometimes more expensive than conveyancers but can provide a wider range of legal services, whereas licensed conveyancers can only give legal advice relating to property. They generally charge either a flat fee or a price based on the value of the property. Both a solicitor or conveyancer will look at the contract, discuss the terms and conditions and ensure the relevant searches and inspections are carried out.
6. Search For Your Home +
- There are many property options available – apartment, house or townhouse. Whilst searching for property, you should focus on location, ease for public transport, school, shopping centres and most importantly suburbs, which have potential for price growth in future.
7. Method Of Buying & Selling +
- Properties in Australia is generally bought and sold using one of the following methods:
>> Private Treaty
>> Expression of Interest
8. Make An Offer +
- Do your search and check similar properties recently sales in the area to come up price that you would like to offer to the Selling Real Estate Agent.
Your offer should include a firm price and other conditions like:
>> Cooling Off Period – 14 days
>> Subject to Finance – 14 Days
>> Subject to Building & Pest Inspection – 14 days
>> Settlement Period – 42 days
However, before you make an offer, please get your solicitor or conveyancer to check property Contract of Sale, which you can request from Property Selling Real Estate Agent. You also need to check for other things like:
>> Sewer Diagram
>> Contract Special Conditions
>> Council Planning Approval
>> Land Tax
>> Land Zoning & Permitted Use
9. Offer Acceptance +
- Once you make an offer, the Selling Agent will discuss with the Seller (Vendor) and the Seller may accept your offer as it is or there might be some further negotiation involved. Once everything is finalised and offer us fully agreed between you and the Seller, you need to pay initial deposit, you and the seller needs to sign the Contract of Sale. The Selling Agent will exchange contracts meaning contract signed by you will be sent to the Seller’s Solicitor and contract signed by the Seller will be send to your solicitor. Once this has happened, the contract is binding and the seller can not change his/her mind, however you can within the Cooling Off Period.
10. Property Valuation & Loan Formal Approval +
- As soon as you a signed a Contract Of Sale, please send a copy of this to Mortgage Empire Loan Expert along with other documents to get your loan formally approved.
Mortgage Empire Loan Expert will organise for valuation of your property. Property valuation may come higher or lower than your purchase price. If property valuation come lower than your purchase price, then you will need to find extra funds in order to complete your purchase.
11. Cooling Off Period +
- During Cooling Off Period, you can change your mind and may not like to proceed with purchase of property for any reason. However, if you do this, you will lose your deposit. If you decide not to proceed, then you need to instructor your solicitor or conveyancer to rescind purchase contract before expiry of Cooling Off Period.
12. Building & Pest Inspection +
- Building and Pest Inspection is not required for a new property, however it is highly recommended for an existing property to check building structural integrity and termite damage. Generally, your solicitor or conveyancer can organise this, and you should commence this soon after signing a purchase contract.
If your offer is subject to Building and Pest Inspection, then you can decide not to proceed with property purchase, if Building and Pest Inspection is not satisfactory and you will not lose your initial deposit.
13. Subject To Finance +
- If your offer is subject to Finance and your loan is not approved formally for any reason, then you can decide not to proceed with property purchase, and you will not lose your initial deposit.
14. Pay Deposit +
- Depending on States and Territories and your Offer, you may need to pay further deposit to the Selling Agent. You should only do this once all conditions (Building & Pest Inspection, Finance) are satisfied. Check with your solicitor and Mortgage Empire Loan Expert prior to making any further deposit.
15. Sign & Return Loan Documents +
- Mortgage Empire Loan Expert will advise you, when your loan is formally approved. Once your loan is approved, you will receive loan documents, which you need to sign and return to the lender. Mortgage Empire Loan Expert will meet you in person and assist with this.
16. Home Insurance +
- All lenders require you to have building insurance prior to settlement. Mortgage Empire Loan Expert will advise you the amount for which you will need to insure the property.
Home insurance is not required, if you are only purchasing vacant land.
17. Organise For Funds +
- You should organise for funds that you need to contribute at least 2-3 days prior to the settlement day. You should discuss with your solicitor or conveyancer about this.
Generally, a day of the settlement, your solicitor or conveyancer will provide you with Settlement Advice Statement, which will outline the exact amount that you are required to contribute and method of payment like bank cheques or PEXA account deposit.
18. Final Inspection +
- A day before settlement or on the day of Settlement, you should conduct a final inspection of the property to ensure it is in the same conditions as when you signed purchase contract. If it is not, then you should advise your solicitor or conveyancer. If there are significant issues, then you may like to cancel settlement in discussion with your solicitor or conveyancer.
19. Settlement Day +
- Your solicitor or conveyancer will organise for settlement and you are not required to attend. The property becomes yours, once settlement is complete. Your solicitor or conveyancer will advise you and the selling agent of this.
20. Obtain Keys +
- Once you and the selling agent have been advised of settlement completion, you can collect keys from the selling agent.