This Magnolia Estates blog highlights the most important steps in buying your first home. We hope you find the blog helpful, however should you need further information please do not hesitate to telephone Megan Tamlin on 0413 027 669 or use one of the helpful links imbedded in the text.
Organise Your Finances
Being an organised buyer will set you up for success. Agents prefer to deal with buyers who understand how much they have available to spend on a home, and if the limits are self-imposed or bank imposed.
A lender will help you to ascertain how much you can borrow based on your current income. It is also important to have a deposit saved to understand your borrowing capacity, before you search for a home and before you start making offers to purchase.
Financial Aids
There are online mortgage calculators which are useful in checking repayments for different interest rates.
You can also find transfer fee and charge calculators online.
Revenue SA is a valuable source of information regarding first homeowners’ grants and stamp duty.
Grants
You may be eligible for a first homeowner’s grant. The rules do change occasionally but currently $15,000 is available in specific circumstances for properties up to $575,000. Check the most current information before you commence your property search.
Searching For Properties
Welcome to your new weekend activity! Most properties are advertised online.
Finding the right property may take time although you might be lucky and find your home quickly. Defining your wants and absolute needs becomes important and this may take some time to discern.
Go to numerous open inspections before you start looking seriously.
Attend auctions that you have no emotional interest in.
Learn about the facilities in your chosen area/s to ensure the zone will match your future needs.
Learn about building regulations for each property but also for your chosen areas.
Inspecting the property
Read the buyers information notice produced by Consumer Business Services known as the R3, as it will turn your mind to a myriad of issues regarding any prospective purchase.
Is the electrical wiring in good working order?
Is there any asbestos in the home or are there any structural issues?
Is there evidence of white ants or salt damp in the home?
Not all problems are obvious and building inspections are recommended.
Not all issues are deal breakers and no home is perfect, but you need to be aware of, and budget for any for future expenses, without any nasty surprises.
Building Inspections
A building inspection can be done during the cool off period but if you are buying cash, unconditionally at auction you need to have this done in advance.
Building inspectors know that time is of the essence in these scenarios, and they report back to the buyer quickly. You can ask to meet the inspector for a chat after they have finished the inspection, while the follow up, written report is pending.
Always check that additions and improvements have been granted development approvals.
The Form 1 statement (the document that triggers the cool off period) is a valuable source of information that is individualised to every property. Your conveyancer can check this document and point out any areas of concern.
Making An Offer
Ask the real estate agent how offers will be managed, to give you the best chance of success.
Is the agent expecting multiple offers or working with one offer at a time?
Ask what you need to do to be successful. It is important to tell them your offer is pending and ask them to wait for it.
It can be an emotional process buying a home but be careful not to over-extend your carefully calculated limits.
Always know the approximate value of a property before making your offer.
Making the offer on the sales contract, shows a high level of commitment but remember, if the property owner signs it, the home will become yours.
Think about what subject to clauses you need in your contract.
Are you subject to finance for example?
The less complicated your offer is, the better your chances of success will be.
Do not make the building inspection a part of the contract, simply organise for it to happen during the cool off period.
After Your Offer To Purchase a Property Has Been Accepted
A deposit for the sale is due at 9am on the first morning after the cool off ends.
The cool off period is 2 clear business days.
Do not make multiple deposit payments, ask your bank to help by briefly increasing your limit to transfer the full amount into the agencies Trust Account.
Ensure that your contractual deposit is acknowledged and receipted promptly.
Deposits are normally ten percent of the contract price but occasionally owners allow buyers to have a variation. Five percent is often accepted. The deposit needs to be enough to show a level of seriousness to complete the contractual obligations.
It's also recommended that you organise an insurance cover note to protect your interest in the property, once the contract has been signed by all parties.
The Cool Off Period
The cool off period is a statutory right and you cannot waive it without a lawyer fully explaining it to you.
The Form 1 triggers the cool off period and it cannot begin unless this document has been served. Having the contract of sale is not enough. The call off period is your opportunity to research and understand your purchase completely.
You will receive the contract and the Form 1, read everything, or ask your conveyancer to. You will need a conveyancer for the legal transfer of the property at settlement, thus it is a good idea to employ one at this point. Agents are allowed to recommend conveyancers, but they must recommend three.
The Contract - Settlement Period
The settlement period can be anywhere between 30 – 60 days, sometime longer, depending on what was agreed in the contract.
During the settlement period your conveyancer will instruct you to carry out identification checks and ask you to sign various transfer documentation ahead of the change of ownership.
Any subject to clauses within the contract of sale, need to be fulfilled during this period and agents will monitor this closely.
The time given to fulfill clauses will depend on what was agree to within the contract.
Often buyers are provided with 14 days to obtain and produce evidence of unconditional financial approval. If the approval is pending after that and the owner agrees, (most owners want to sell to a buyer they have been working with) an addendum to the contract can be executed to keep everything legal and on track.
Once the money is certain and the contract is unconditional, all parties look forward to the exchange of the title and the funds on the settlement day.
It is time to pack up your home and prepare for the next chapter of your life.
What Does a Conveyancer Do?
Your conveyancer will be in charge of making sure all legal requirements are met throughout the transaction which passes legal ownership of the property from the owner to you as the buyer.
The conveyancer finalises the utilities accounts and manages the exchange of money on settlement day.
Settlement Day
Once the legal transfer has been finalised, either at the Land Titles office or via the online portal PEXA your conveyancer will confirm the transfer into your name or legal entity. This is an exciting and busy time.
Some agents ask you to collect the keys from their office, but other’s will meet you at your new home, check everything is in order for you and greet you with a bottle of champagne. A much better option!
Now it is time to enjoy life in your new home…
Congratulations !
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