However, this doesn't mean you need get stressed out and overwhelmed by the home buying (and selling!) process.
With some careful planning, patience and expert help from your Mortgage Store broker, you will hopefully breeze through the process and be relaxing in your new home in next to no time.
Home loans, mortgages and finance.
Unless you have the good fortune to win lotto or be enormously wealthy, it is likely you will need the help of a lender or bank to borrow enough money to buy your dream home.
So - the most important step in preparing to buy your first home is to begin the process of organising the best finance for your needs and lifestyle. Your Mortgage Store broker is as expert in identifying which of the thousands of loans and options are best suited to you. This home loan calculator will give you a good estimation on how much you can borrow.
And it can definitely pay to use a mortgage broker to help with your loan. As the number of mortgage providers, lenders and banks in the market increases, so does the competition for your business. A mortgage broker is armed with all the latest mortgage information and offers and can quickly identify the best loan for you. This could save you thousands in the long term and literally reduce the term of your loan by years. Speak with one of our friendly mortgage brokers today.
The buying process
Once you have pre-approval in place and have selected the property you want to by, the seller or agent will likely ask you to pay a holding deposit.
Be aware that this doesn't necessarily mean that the property will be saved exclusively for you or that it is taken entirely off the market. All it means is that as a goodwill gesture made by you to the seller that you are serious about buying this property. Hopefully the seller or agent will return this goodwill by being less likely to show the house to anyone else. The seller is also able to take other initial deposits from other people but is required by law to refund your deposit should they not sell the property to you.
Getting GAZUMPED!
Gazumping is the pet name given to the situation where you have a verbal agreement with the agent to buy the property at a certain price and you have paid an initial holding deposit on the property. However, another buyer has come along and offered a higher price and the seller has agreed to sell at the higher price.
What this means is that although you get your holding deposit back, you will loose any money you have already spend on preparing legal documents and building reports. As the seller is legally entitled to receive the best price for the property, there is nothing you can do!
The risk of getting gazumped does not mean that you should not get building inspections - if the building has major structural flaws, then spending the $500 on a building inspection will seem like peanuts.
Building inspection
Sellers will not usually supply you with any type of guarantee as the structural integrity of a property. Therefore it is strongly advisable that before you exchange contracts and settle on a property, you spend the dollars on having a building inspection done.
The report will indicate any visible problems and advise on the necessary repairs. There are many building professionals who can complete a building inspection including architects, builders, building consultants and structural engineers. Look in the yellow pages under "Building Inspection Services" for details.
Exchanging contracts
This is crucial step in the buying process, as up until contracts are exchanged, both yourself and the seller are entitled to change minds about the purchase without any legal consequences.
The contracts sets out the terms and conditions of the sale and usually lists which removable items are included in the sale. These could include things such as fittings, backyard sheds, air conditioners, TV antennas and even backyard swimming pools. The contract can also state that items such as air conditioners and swimming pool filters must be in good working order.
At the time that contracts are exchanged between the buyer and seller, as the buyer you are required to pay what usually amounts to a 10% deposit. This is usually handled by the seller's agent.
The cooling off period
Sometimes it is easy to get all caught up in the rush and excitement of buying a home and sometimes the result can be that you make a decision based on emotion rather than practicality.
Built into the sales contract will likely be a "cooling off period". This gives you a period of time to reflect carefully on your purchase decision and really make sure it is the best choice for you, your family and lifestyle. Be aware though, that this is only standard in some states of Australia.
If you suddenly have an epiphany and decide that this really has been a poor decision, and you are still within the cooling off period, you can cancel the contracts. The only legal consequence is that you will be required to forfeit an amount you have paid on deposit as compensation.
Settlement
This is the final step before you are handed the keys to your home and you can move in. The settlement date is usually within a period of 4 to 8 weeks from the contract exchange; Although it can be much longer or shorter depending on circumstances.
During this "waiting period", enquiries and searches should be carried out at the local government agency to ensure the property is clear of any interests or restrictions that may have changed between the date of contract exchange and settlement.
On the date of settlement, the remaining purchase price is paid to the seller and the home is now legally yours to enjoy! Also remember that state government stamp duty must also be paid on this date -so make sure you have accounted for this in your budgeting.
Also - it is wise to ensure that you have home and contents insurance arranged from the moment you settle.
Wasn't that all easy!
Whilst the entire process can seem like lots of hard work and running around, getting the right house at the right price in the right condition and location is a life-changing event.
And a crucial component of all this is arranging the right loan for you. And that means not only the cheapest loan, but one that has the features to match your lifestyle.
To find out how a Mortgage Store broker can help you get started in the home buying process, simply complete this form to arrange an obligation-free meeting.
KB: Q0003
Last Updated: 26 Sep 2006
