Easy Steps to Buying Your Home new_house


Step 1 – Decision Time

Your very first step is to decide you want to move out of home (or to stop renting) and buy your own home. It’s the Australian dream.

You need to get finance pre-approval from your chosen bank or mortgage broker. They will tell you how much you can afford to borrow. Aside from the purchase price of your new home you may need to pay for things like legal fees, mortgage insurance, fire insurance and stamp duty.

Step 2 – Go Home Hunting – “SHOPPING”

For your new home can be overwhelming (emotionally and physically from the time it takes to look at all the homes on the market in your price range). You need a clear picture of what you want and how much you can pay. Aside from the basics such as suburbs and number of bedrooms there are very important factors to keep in mind depending on your circumstances. For example, is it in walking distance of a primary school, How far to the train station or shops? Is there parking? Does it have a sunny aspect? Is it on a truck or bus route? Are your next door neighbours members of a loud rock band that practices late at night?

Attached is a home buyers checklist to help you remember each house you inspect. You may want to make at least 10 copies.

Step 3 – Find a Home you want

Once you have found your home you have to make an offer to buy it. It is unlikely it will be this simple. Your real estate agent will tell you how much the owner wants then you can make your offer and its back and forward between you and the owner before finally (hopefully) you both agree on what price you will pay for your home.

Step 4 – Hire an experienced solicitor or conveyancer

It is wise to hire an experienced solicitor or conveyancer while you are home hunting to help protect and guide you through the legal side of buying a home (called conveyancing it’s the legal transfer of property into your name). Ask your family friends to recommend someone they know or ask your local real estate agent for names of legal people who are experienced in buying and selling properties but more importantly, are interested in answering all your questions along the way. Remember their job is also to protect you!

Step 5 – Signing Contracts australian house

There are two ways to sign your contract:-

Sign Contract in the real estate office

You will have a 5 working day cooling off period to get your finance confirmed, have your pest and building reports done and see your legal advisor to have your contract explained. You will pay a small deposit of 0.25% of the purchase price. At the end of the cooling off period the balance of the 10% deposit must be paid to the agent. A 5% deposit may be paid if agreeable by the vendor. The biggest advantage of having a cooling off period is you can not be gazumped. (I.e the owner sells the property to another buyer). If you pull out during the cooling off period you will lose your 0.25% deposit to the vendor.

Signing your Contract with your legal advisor

This takes any pressure off you so you can get your finance confirmed, pest and building reports done, see you legal advisor and then you will pay your deposit (either 10% or 5%). Exchange of Contracts will take anywhere between 1 to 3 weeks. Beware that during this time you are in danger of being gazumped.

Step 6 – Getting formal loan approval

Your offer has been accepted, your next step is to have your home loan formally approved. Most people have finance pre approval before they go house hunting so all you need to do once your offer is accepted is to ring your mortgage broker/bank to organize for your home to be valued. Once this has been done your bank will give you a formal loan approval, detailing the terms and conditions of how much your bank is prepared to lend you.

If you have signed a contract in the real estate office with a cooling off period then once your loan is formally approved your cooling off period will finish and both you and the owner are legally bound to complete the contract.

Step 7 – Getting ready to move

You are almost there! Next comes time to sign your loan agreement and mortgage. Now also is the time to take out home/building and contents insurance ready to protect your valuable new asset in case of fire or loss once you own it. Your bank or insurance company can help you with this. Packing up all your possessions needs to be organized. Once you have exchanged Contracts you must sort out stuff you don’t need to put into a garage sale. You can either pack everything yourself and move in or hire a truck with the help of 1 or 2 strong friends or get a removalist to do it for you.

Step 8 – Settlement Day

You’re now in the home straight with the finish line in sight. It usually takes 4 to 8 weeks from when you paid your deposit and exchange of Contracts for settlement to be finalized. Your legal advisor will arrange for your bank to pay the balance of your purchase price using your bank loan and your cash. Your legal advisor will ring you so you can go and collect your keys from the agent. At this point your home has become legally yours. So send out the invitations for your house warming party.