Set Your Budget
Budgets vary drastically between people and are a personal decision to make, but there are some pointers everyone should take into account. Here’s a quick breakdown:
- Be realistic with how much you can afford to borrow. Unrealistic repayments are going to seriously impact your lifestyle and stress levels.
- Get an understanding of the market you’re buying into. Research recent sales and figure out pricing trends for the last year or two.
- Extra costs to consider include: legal fees; building reports; stamp duty; mortgage insurance; moving costs; property valuation; home and contents insurance.
Some people choose to consult a financial advisor, who can guide you towards choices that suit your circumstances.
Ok, so there’s a high chance you’re going to be living in this house. Or if not you, then your tenant is. So it needs to be in a place you’d like to live, or other people wouldn’t mind living. Research the area and its facilities, keeping in mind the following:
- Shopping centres,
- Medical facilities,
- Proximity to transport,
- Parks and recreation facilities
Walk the neighbourhood and get a feel for it and try chat to your potential neighbours. Find out any future development plans in the area, as these may affect the value of the or even your way of life (we all know of someone who’s had a high-rise built in front of their river views!)
Having clarity in your search efforts will get you into your property sooner. Figure out exactly what it is you want before starting to look. Where will you look? What type of property would you like? Free-standing home, terrace, townhouse or unit? What’s your price range? What features would you like? Here’s a few to think of:How many bedrooms and bathrooms do you need?
- Would you like a new or established home?
- Would you like to renovate?
- What size backyard?
- Would you like a garden or acreage?
- Do you need a carport or garage?
- Would you like a pool? Or space to build a pool?
- Are stairs suitable for you?
The more answers you have, the easier you’ll find it to find the right place.
Pre-Approval and Finance
It’s essential you get pre-approved finance before you place any offers on properties. You’ll feel more confident making deals, and you won’t have to deal with the fallout if you make an offer then your loan application gets denied.
Are you selling a property of your own as well as looking for a new one? We’d recommend you sell first. Chances are you’ll find the property you’re looking for pretty quickly. If you’ve already sold your property, then you’ll be in a strong financial position to start putting offers on homes that appeal to you.
Choosing an Agent
Having an agent who understands you and what you want is really important. You need to click with them and build a relationship based on a good rapport and transparent communications. Why don’t you come in and have a chat with one of the Queensland Lifestyle Real Estate agents and tell us what you’re looking for? We’re here to go the extra mile to get you into the property you want. Plus we can give you advance notice of upcoming listings, so you can get a look at them before anyone else does!
Do Your Research
Understanding the market you’re buying into will really help out. If you have knowledge of the type of properties being sold and how long they’re on the market for, you’ll know what time frames you’re operating in and the speed and scope of the offers you need to put in.
You’ll find that in a buyers’ market:
- Number of properties on the market is greater than number of buyers
- Properties usually take longer to sell
- Buyers often dictate the selling price
- Prices are stable or falling
- It’s a good opportunity for first home buyers to enter the market.
While in a seller’s market:
- Number of buyers exceeds number of properties available for sale
- Properties sell faster
- Prices generally rise
- Sellers may receive offers from more than one buyer
- Sellers achieve prices close to or above the listed price.
And in a balanced market:
- Number of properties for sale is about equal to number of buyers
- Sellers will consider reasonable offers
- Prices are generally stable
- Properties sell within a reasonable time
- A good number of prospective buyers see the property
When you find the house that ticks all the boxes, ask the agent to send a Contract of Sale to your solicitor or conveyancer. A professional who’s fluent in legalese and knows these types of contracts inside-out will be able to advise of any issues before you sign on the dotted line.
Building and Pest Inspection
Nobody wants to buy a home and then have half the garage fall over because of termite infestation! Don’t be that person – get a building and pest inspection done, and address any structural problems or pest issues before going ahead.
Making an Offer
To become owner of a home, you enter into negotiations with the seller, spearheaded by your agent. The initial offer to purchase should have details of any conditions on the sale, such as:
- The timeframe to organise finance
- The settlement date
- A satisfactory building inspection report.
Advice on offers to purchase in your region can be obtained from your real estate agent or legal conveyancer.
Once you make your offer and it’s been accepted, you’re nearly in there! Congratulations, homeowner! An exchange of contracts will be organised, and a standard cooling off period of five-days normally applies.
When the vendor signs their sale contract, the solicitor or conveyancer will arrange to exchange the contracts. Usually the final settlement of the property takes around 30 days, however in some circumstances this may be negotiable. Your legal conveyancer will need to check all the details of the title and prepare any necessary documentation. When nearing settlement, be sure to sign any mortgage documents and arrange your finances for payment of the purchase price balance.
When your offer has been accepted and contracts have been exchanged, a 10% deposit is required from you. This is held in the agency trust account pending final settlement.
The deposit amount and when it is paid may also be part of the buyers offer to purchase. If a contract is unconditional and you don’t need to proceed to settlement, you may have to forfeit your deposit under the terms of the contract. Although this doesn’t often happen, it’s good information to bear in mind.
What is a Conditional Offer?
The QLRE guide to confusing real estate lingo, part A!
A conditional offer means you have placed one or more special conditions on the purchase. These could be: subject to finance; to a house selling; to completion of certain work on the home; to building and pest inspections.
What is an Unconditional Offer?
The QLRE guide to confusing real estate lingo, part B!
This means as a buyer you’re not placing any special conditions on the purchase, the seller only has to accept your offer. Once accepted, the contract becomes binding. Do your research before deciding if this is the right way to go.
Buying at an Auction
Auctions can be fun, emotive and stressful, all at once! If you’re taking part in an auction arrive early, bring your identification, and register as a bidder. If you want somebody to go and bid on your behalf, they need to have a bidding authority form signed by you.
If you’re the successful bidder on a home, you generally need to front up the 10% deposit. If the property has a reserve price on it that isn’t met, then the highest bidder can negotiate with the seller on the price.
Remember: an auction bid is an unconditional offer) unless other conditions have been agreed to prior to the auction)
Inspection Prior to Settlement
Before the final contract exchange, make a pre-settlement inspection to make sure the property is in the same condition as when you agreed to buy it. Make sure all contract conditions and inclusions have been met, repairs have been made, and chattels are still in place. Chattels are items the seller has agreed to leave in the property, such as curtains, lighting, dishwasher, garage door remote, and so on.
It’s arrived! Buying a home isn’t easy, but it’s all worthwhile when you get to this point. Once settlement is finalised, you can come in and pick up the keys to your new home!
Here’s a list of things to tick off once you get to this stage:
- Finalise your mortgage documents
- Arrange the signing of the transfer with your financial institution
- Allocate funds for rates and insurance
- Your insurance broker to arrange cover from unconditional date
- A mail forwarding service
- Contact relevant parties regarding your change of address
- Enlist a removal firm or a group of helpers
- Connect with suppliers for electricity, gas, internet, phone and water.
And then… pop open the champagne! Welcome to your new home!