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Buyers Guide

Buying a home is not only one of the largest purchases you're likely to make, it can also be one of the best long term investments - so it's important that you get it right. This means doing all your homework and making sure that the property you are buying is the right one in terms of price, location, value, size and lifestyle.

Private Sale

Buying by private sale means you buy the property at the advertised price or you negotiate the price with the Seller, usually through the Seller's agent. In some cases, the property may have been 'passed-in' at auction because the Seller's reserve price (the minimum they were prepared to accept) was not reached. Buying by private sale allows both parties to negotiate an acceptable price, with the buyer usually starting low and the seller starting high. The negotiation continues until both parties agree on a price.

Auction

The auction method is the ideal way to test the property market against buyer demand. However, it is also an emotionally charged and fast-moving atmosphere that requires both parties to keep a cool head. Some of the benefits of buying at auction include:

  • You can compete with other bidders in an open forum and you are aware of other offers being made.
  • All legal documents relating to the sale of the property are available for inspection before the auction.
  • Contracts of sale can be signed and exchanged on the day of the auction

Preparing to Buy

As a prospective purchaser, you need to do some homework: decide what you want in terms of size, location and price range. Contact our office and ask us to let you know when suitable properties come up. Regularly check the local and daily newspapers, however these days most people are finding that some Internet sites provide the best and most up to date information, you can even get “email alerts” with the latest properties “For Sale” sent through immediately they are listed. A very good place to start your search is www.realestate.com.au

Inspecting a Property

Inspections should be made at the advertised times or by appointment with the real estate agent.

You may consider having a property inspected by a builder or architect to assess whether there are any defects that might affect your decision to buy. This is particularly relevant if large-scale renovation or extensions are planned.

For a fee, they inspect and report on the state of the property, including the structural condition and damp.

You need to look at the location and style of the property in relation to your requirements: the size of the property, proximity to schools, access to public transport and so on should be considered.

Once you have found a property that suits you, it is wise to check it out during the week as well as on the weekend, as a peaceful environment one day might be quite different at other times.

Organising Finance

It is vital that you organise your finances before making an offer or bidding at an auction. Make arrangements to cover the deposit should your offer or bid be successful, and arrange to have the appropriate mortgage funds available for settlement.

Confirm with your financial institution, broker or bank the amount they are willing to lend you and calculate this with your capacity to repay, without negatively impacting on your lifestyle and other financial commitments.

Make sure that you check

  • A copy of the title showing any existing easements or covenants, boundary measurements of the land and location in relation to nearest street;
  • Information about planning or development restriction;
  • Details of any mortgage over the property;
  • Outgoings such as rates, body corporate fees and so on that apply;
  • Building restrictions and copies of permits issued for work carried out in the last seven years.

Making an Offer

Missing out on a property that you have your heart set on can be a very disappointing experience. Quite often this happens because the offer process is misunderstood. When making an offer to purchase a property, it is important to be aware of the following:

  • The agent will submit all offers to the Seller.
  • The property remains on the market while the Seller considers all offers. Just because your offer is the first one submitted, does not necessarily mean that it will be accepted.
  • Your offer may be made subject to a finance clause i.e. Bank approval, or other conditions i.e Sale of an existing property or another condition such as a Builders inspection or Timber Pest Report.
  • You can make your offer conditional on certain terms (such as a dishwasher) being included or excluded from the contract. Any special conditions such as these must be written into the contract.

An offer is not legally binding on both parties until the buyer and the seller have signed a Contract of Sale, which must contain details of the property, the price, deposit and settlement terms. Once the offer is made in writing, it is then up to the Seller whether or not to accept it or whether to make a counter offer.

The Seller is under no obligation until they accept the buyer's offer by countersigning the contract.

It may be worthwhile making an offer for a property before it goes to auction as this gives you an opportunity to negotiate through the agent and perhaps to stipulate any particular conditions you require in the sale.

Costs Associated with buying a property

There are a number of costs aside from the purchase price for which a buyer is liable.

A checklist may include the following:

  • Settlement / conveyancing fees
  • Stamp duty on the transfer of property
  • Stamp duty on the mortgage
  • Loan application fees
  • Insurance
  • Adjustments such as council rates and water fees

Stamp Duty

Examples:

Price of Property - Stamp Duty Payable
$200,000 - $6,200
$250,000 - $8,200
$500,000 - $20,700
$1,000,000 - $47,700

For First Home Buyers there is no Stamp duty payable upto $250,000 and the duty payable from $250,000 to $350,000 is discounted.