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Buying Process

 

 

Finding a Property

 

When you start your property search it is important to set yourself appropriate parameters, and familiarise yourself with the market. It is likely you already have an idea of the type of property and location you want, but equally important is to set your price range early. The price range you are searching in will largely determine the quality of properties and potential locations. For this reason you should seek the advice of your bank or broker to confirm your budget, prior to starting your search. Alternatively, if you are planning to sell your current property it would be advisable to get a market appraisal to find out what price you can expect to receive from the sale.

 

 

Once you have set your parameters you need to invest some time researching the properties available in the current market. Using internet search portals can be a great way to view a lot of properties in a relatively short time, combine this with getting to as many inspections as possible and you should have a good feel for the market. Local agents can also be an invaluable source of local knowledge and it is a good idea to build relationships with some that service the areas you’re looking in. A fantastic tool that many agencies now have is the ability to sign up to property alerts that match to your search criteria and send you information on suitable properties (often before they become available to the general public).

 

 

It is important to keep an open mind; your preferences are likely to change during the search process as you become exposed to different properties and locations that you had previously not considered. It is our experience that the majority of sales come from purchasers in our database so stay in touch with the agents you’ve been dealing with and update them as your requirements change.

 

 

 

Negotiating a Deal

 

Once you’ve found that special property it's then time to close the deal. At this stage, if you have not already done so, it is advisable to seek the legal representation of a solicitor or conveyancer. Your legal representative can provide you with pertinent legal advice and act on your behalf during the sales process. The first step in negotiating the deal is to work out what price you are willing to pay for the property and submitting an initial offer. The amount of money you offer on the property will be largely guided by the competition for it and the strength of the market. In making your initial offer you should leave yourself some room to negotiate, however you also need to ensure that your offer is strong enough to be seriously considered by the owners.

 

 

Making an offer on the property can be done verbally or in written form, either is acceptable and neither is binding until contracts are signed. You may want to consider including any additional conditions as part of your offer (for example having a reduced settlement period may be desirable to an owner and benefit you in your negotiations).

 

 

Once you have submitted your offer to the agent they will present it to the owners for their consideration. At this juncture one of three things can happen; the owner will accept your offer and arrange to sign contracts, the owner will reject your offer at its current level, or the owner will offer you a counter offer and commence negotiations. Typically if the offer is within a reasonable margin from the asking price the offer is likely to be accepted or negotiated on. It is also worth noting that the response you get from the owner will be influenced not only by price but also by the competition for the property.

 

 

It is important to understand that there may be a number of other interested purchasers also involved in the negotiation process – you may or may not be made aware of these other buyers. For this reason it is important to note that if there is a lot of competition for a property you will not always be given the opportunity to increase your offer to match the other parties. In a competitive situation it may be worth submitting a strong initial offer to secure the property or risk losing it to another purchaser at a price you would have paid.

 

 

 

Signing the Contract

 

Once you have negotiated an acceptable price with the owner you will be required to sign the contract and pay a deposit to secure the property. Before signing a contract you should consult with your legal representation to ensure that they are satisfied with the conditions of the contract.

 

 

Once you are ready to sign the contract you will also need to pay a part deposit of 0.25% of the purchase price (unless purchased unconditionally). This payment will typically be made out to the agent and held in a trust account, but it is advisable to check with the individual agent as to acceptable methods of payment. The owners will also sign an equivalent copy of the contract and then these contracts will be exchanged. Once the contracts have been exchanged you have secured the property and no other offers can be accepted. At this time the property is considered ‘Under Contract’ and will no longer be shown to potential purchasers.

 

 

The exchange takes place when both copies of the contracts are signed, dated, and sent to the respective legal representatives. In a conditional exchange the purchasers then enter into a minimum 5 business day cooling-off period. During this time the purchasers may rescind the contract for any reason, however they will forfeit the 0.25% part deposit. To proceed with the purchase the balance of the deposit (typically 10%) must be paid by 5.00pm on the day the cooling off period expires. Once the balance of the deposit has been received and the cooling off period has expired the property is now unconditionally sold.

 

 

Alternatively, if a cooling-off period is not required or desirable you can waive this right and sign the contract unconditionally. To waive your right to the cooling-off you will be required to complete a ‘section 66W certificate’ with your legal representative and pay the full deposit.

 

 

 

Building & Pest Inspections / Strata Reports / Valuations

 

Prior to entering into an unconditional contract most purchasers conduct a building and pest inspection or a strata report on the property. If you choose to conduct these checks prior to signing the contract then the property is not secured – however if you conduct these checks during your cooling off period you risk forfeiting the 0.25% deposit should you decide not to proceed with the purchase. For this reason it is advisable to seek the counsel of your legal representation as to what checks and inspections they recommend and when these should be conducted.

 

 

Your mortgage provider may also require a valuation to be conducted on the property prior to giving your loan final approval. Typically the valuation is conducted in the cooling off period, but once again you should seek advice on this from your legal representative.

 

 

 

Settlement

 

Once the property has been sold unconditionally the sales process is largely handled by the legal representatives of the vendors and purchasers. A typical settlement period is 42 days but this will vary from contract to contract. It should be noted that the settlement period starts from the exchange date of the contract, not the end of the cooling off period. Sometimes the settlement date will vary slightly from the contract and it is advisable to stay in contact with your solicitor throughout this period so you are aware of any changes that may occur.

 

 

Prior to settlement it is advisable to conduct a final inspection of the property to ensure that the condition of the property hasn’t been altered from the date you signed the contract. Additionally, this is an opportunity to make sure that all the inclusions remain at the property and anything that isn’t an inclusion has been removed.

 

 

On the day that the property is due to settle your solicitor will arrange a time for the settlement to be finalised. Once the property has settled your solicitor will contact you to confirm this. You can now contact the agent to arrange a time to collect the keys to your new home!

 

 

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