You’ve found a property that ticks all the boxes and seems to be within your budget… exciting times! So what happens next?
How do you actually buy a property? Here we explain the steps involved in making an offer, so you can increase your chances of making this property yours!
Most of us only buy property a few times in our lives, if we’re lucky.
So if you’re a first time home buyer – or someone who purchased a property several years ago – chances are you might not know how to actually go about buying a house in today’s market.
If you’re unsure of what comes next, here are the steps we would recommend taking, on your way to becoming a home owner.
1. Talk to us first
Before make an offer on a property, you need to be confident you can actually follow through with the purchase.
That’s why we recommend you talk to us first, before you even start house hunting.
We’ll calculate your borrowing capacity – and help you arrange pre-approval – so you’ll have clear idea of your house buying budget.
We typically recommend you have pre-approval lined up before you start home-hunting. But in some cases, it’s not absolutely necessary.
2. Ask the agent for a copy of the contract
Once you’ve seen a property you’re keen to buy, ask the real estate agent for a copy of the contract.
This will give you a chance to look through the building and pest inspection report for any red flags, or past strata minutes for any potential issues with the development.
If the property is being sold via private treaty (i.e. not an auction), you will likely have time to have the contract reviewed by your solicitor/conveyancer before you need to sign it.
(If the property is being sold via auction or you’re wanting to submit a pre-auction offer, this works a little differently and you will want to have the contract reviewed beforehand.)
3. Do your research
If you’ve been looking for a while, it’s likely you’ve checked out other properties and researched the local market.
This helps to give you an idea of what similar homes in the area are selling for, which help to make sure you’re offering a reasonable price for one you’re interested in.
4. Put your offer in writing
When you’ve come up with a price you’re comfortable with – a price that’s within your pre-approval amount- we recommend you make an offer in writing (via email). Not only does this show you’re serious, but it removes any ambiguity in the negotiations.
Often there can be some back-and-forth – maybe on price and the settlement terms. And some times, you may need to wait a day or so for the agent to come back to you.
When your offer has been accepted, you may be asked to pay a holding deposit.
A holding deposit is not the same as the official “deposit” you pay when it’s time to Exchange on the contract. Although this holding deposit will be factored into the calculations.
Once you’ve had an offer accepted, be sure to let us know the good news! We’ll get things moving on the finance side, by ordering a valuation and progressing your pre-approval with the lender.
5. Exchange on the Contract of Sale
Once the valuation has been completed, your loan has been Formally Approved, your solicitor has reviewed the contract, you’ve completed any additional checks/inspection you want to do on the property and your deposit funds have cleared, then it’s time to Exchange on the contract through the solicitors. This is when your purchase becomes legally binding and your purchase becomes official.
6. Prepare for settlement
Depending on what you have agreed with the vendor, settlement is typically anywhere from 30–90 days after the date of Exchange. Settlement is the day your new loan is funded and you get the keys to your new home.
Once Exchange has occurred, everyone involved (i.e. your lender, the vendor’s lender, both solicitors and your mortgage broker) will work to get things ready for settlement.
Want to get started on your own purchase?
Buying a home can seem complicated and maybe even a little scary, but we’re here to help you every step of the way.
