About Real Estate Buyer Tips

RESEARCH:

When looking at houses or property to buy or invest in, make sure your research is done! There are many factors that influence a property’s price potential, location (specifically proximity to community services, and availability of local facilities and infrastructure) hold firm as the enduring key to future capital growth. If buying in an area where these are not on your door step you need to decide if how long you are prepared to wait to see growth in your property. The proximity to Schools, shopping centers, public transport, parks and, increasingly, cafes and restaurants, are all desirable aspects of suburban living and favourable attributes to potential property buyers. For many Buyers the most important features that they highlight as important when choosing a home:

  • The proximity to their work place or public transport
  • Schools both public and private
  • Shopping Centers and the Corner stores
  • Medical Services
  • The neighborhood’s reputation

FINANCES

WHY WAIT? Did you know that recent studies have shown that it will take the average Australian over 8 years just to save for the deposit? In this time the interest rates and charges would have changed dramatically and you will remain behind the eight ball. Many experts advise that at times it is better to start your property aspirations and pay the mortgage insurance amount to ensure you get yourself into the market.

Deposit:

You need to ensure you have a minimum of 10% of the purchase price of the property as the banks and lenders prefer to lend up to 90% as a maximum. Proof of genuine savings over a 6-month period will also assist you in your process with your lender / bank. This will also save you money in the long run as it will decrease the amount of interest that will eventually be paid on your home loan. Of course this is a little different for first home buyers so ensure you discuss your circumstances with your lending organisation. SERVICE YOU DESERVE with PEOPLE YOU CAN TRUST GAIL BERNARDIN 0418 645 506 NARELLE CORDARO 0466 683 684

Mortgage Insurance:

Depending on the total amount you require your borrower may require you to take out mortgage insurance. Mortgage insurance protects you against any loss if you default on your loan and you typically wear the cost of the mortgage insurance for the lender.

Interest Rates:

The most important thing to consider is the current interest rates, research the current interest rates and take into account the fact that if the rates increase once your loan has started can you afford the repayments. Ensure you have contingency funds available if you do not fix your home loan rate as you may be able to afford the payments when you are on variable and the rates are low but as rates are set by the RBA each month they can quickly increase over a 12-month period.

Cost of Buying:

The cost of purchasing a property will be fees and charges over and above the purchase price, so these costs cannot come out of the funds you borrow from the bank for the property, you will have to have these funds available straight away. Getting a pre-approval from your bank will help you in the purchasing process and potentially make it a quicker process.

Fees and charges include:

  • Loan establishment fees
  • Bank charges
  • Legal fees & searches
  • Stamp duty / transfer duties (click here for more information: www.osr.qld.gov.au/duties/transferduty/index.shtml )
  • Insurance premiums
  • Building & Pest Inspection Reports

Get Professional Advice:

Ensure you speak to your financier or mortgage broker before you start looking at properties so that you know your limits and you know how much you are pre-approved for.

PROPERTY INSPECTIONS

Some things to consider and look for when inspecting a property are:

Inside the Property

  • Check for signs of rising damp, such as rotting carpet or mould on the walls and ceiling;
  • Check the walls and ceilings for warps, cracks and any obvious damage;
  • Test all light switches; and
  • Test the water pressure in hot and cold taps and check to see that water drains well – slow flowing water may indicate blocked drains.
  • Check all equipment is in working order

Outside the Property

  • When attending an open house, a buyer will often be asked by the agent to provide their contact details, this is now an expectation, most times it is to get feedback on your thoughts of the property you have seen.
  • Inspect fences for stability and any obvious faults;
  • Large trees around the house may have large root systems that can cause structural problems;
  • Check that the land’s water run-off is adequate and drains away from the dwelling;
  • Water staining on the eaves may indicate damaged or blocked gutters;
  • Look at the roof for any broken tiles or capping; and
  • If the property has a pool, check the legality of its fencing via the Pool Safety Council. Pools in a Community Titles Scheme (body corporate) are the responsibility of the body corporate.

HOW THE BUYING PROCESS WORKS

General Advice

Before you intend on making an offer, make sure you have organised the following:

  • Pre-approval of finance from your bank or lending institution
    • Choose your preferred solicitor
    • Ensure you have your initial and balance deposits ready, if purchasing a property through auction you will need the full 10% deposit on the day of the auction.
  • Decide based on your circumstance what settlement date is required, normal contracts in Queensland are 30 day contracts, so this doesn’t give you much time to get organised!
  • Do you need to sell your property? If so, do you have it on the market to show you are serious about purchasing your new property? Or
  • Do you need to find a place to rent while you are still looking?

Contract Process

Once you found the property you have fallen in love with or you intend to invest in, then you need to understand the steps involved in the purchasing process. We advise that you obtain Independent legal advice from a solicitor.

Cooling Off Period

The cooling off period is 5 Business Days which starts when the property is under contract, therefore both yourself and the other party has signed all documents. This is where the purchaser can terminate the contract for any reason, however they will need to pay 0.25% of the purchase price to cover time utilized to date.

Initial Deposit

The initial deposit is payable within 24 hours when both the buyer and seller has signed the contract and agreed on the terms and conditions of the written contract. If purchasing by auction you will need the entire 10% deposit ready on the day of the auction.

Balance of Deposit

The balance of the deposit is payable when the finance caluse is due (if applicable) this is also known as the unconditional date. It is standard practice for the total of deposits to make up 10% of the purchase price, however this can be negotiated. Remember if you are buying at an auction this would be due on the day of the auction when bidding is finalised. If you are unsure please speak to us or your solicitor.

Building & Pest Inspection

A building and pest inspection can be arranged but it is up to you as the purchaser to arrange and pay for. The standard time frame is 7-14 days after both parties (purchaser & vendor) have agreed and signed a written contract. If you are unsure on who to use please ask us and we can recommend a number of firms you can use.

Valuation/Finance

A valuation request by your bank or lending institution may be required, this is normal practice in all states of Australia especially if you’re borrowing more than 80% of the purchase price of the property. The Valuation Inspection will be arranged by your bank/lending institution within 14 days of the dated contract so ensure you speak to your lending institute as soon as you have made an offer.