BUYING A PROPERTY… needs your full attention, dedicated research and disciplined determination
from Peter at SSB
Buying a property will be one the most important decisions you will make and is likely to be the single largest transaction you will undertake.
When you buy a property directly from an owner using a private property transaction you can control of the deal, buy exactly what and where you want on your terms in your time frame for the price you decide.
You are the only one that knows where and what type of property you are seeking because you know your tastes, preferences, wish list, must haves and the no thanks not for me better than anyone else and nobody else will dedicate the time, focus and attention to find exactly what you want where you want it.
The owner private seller can set a far more competitive price and save tens of thousands of dollars by doing it themselves which could make the difference and get the deal done.
Before buying a new home, apartment or property we recommend you visit the website of the Australian Federal or your State government CONSUMER AFFAIRS OFFICE in your State or Territory as they have important regulatory information and videos that could affect and benefit the purchase of a property.
Decide on your price range
Research market trend and property reports as they will keep you up to date with the factors affecting property prices and market trends and forecasts. This information can help you to decide the best time to buy property in a particular location.
A current price estimate can help you decide whether the property you want to buy is within your budget.
Do not make an offer until you have researched recent comparable property sales.
Do not make a bid that is more than you can afford.
Property data research
Property data websites provide information that can assist you to research locations, keep up to date with market trends and estimate a selling, renting or buying price.
Note, the following information is provided as a resource for buyers, sellers, renters and those considering a property swap. We do not endorse the providers, the websites or their content and services offered. You should do your own research to establish the most suitable data for your needs.
Suburb sales data
This information can help you set an asking price for a property you are selling, or to decide how much to offer for a property you are interested in buying, based on the selling price of similar properties in the same suburb or surrounding area.
Suburb sales reports generally provide historical sale prices for an area for the last 12 months, although some reports have up to five years of sales data.
There are two types of reports:
- Suburb reports listing sales for a single suburb
- Postcode reports listing sales for all suburbs in a postcode.
Suburb sales reports list private sale and auction prices for houses and units, along with addresses and sale dates. A report may also have information about the:
- type of property (house or unit)
- size of the house or unit - number of bedrooms and/or bathrooms
- land size, use and zoning
- capital growth and current price estimates
- median prices and trends
Reports may not be available for all suburbs or postcodes and there may be a limit on the number of properties included, so don’t rely on just one report cross reference with at least three reports.
As well as your bank and mortgage brokers Google “property reports” for your State and see a list of some, but not all, online providers of property data.
Make your plan to buy
Knowing what you want will help you avoid buying a property that does not meet your needs.
Make a list of:
- your preferred areas and specific locations
- essential features and must have
- your wish list of non-essential but desired features
Research the market in your preferred areas by:
- driving around the areas you have chosen
- searching the internet
- attending auctions
- speaking with agents
- reading newspapers for auction results
- checkout public transport connections
- drive through your chosen location in peak hour traffic
- drive around the area on bad weather days, if it looks good in the wet it will great in sunshine
- Talk with the local council, neighbours and local businesses about any upcoming developments in the area
Get informed about the property market
Learn as much as possible about every aspect of the property buying and selling process, and the products and services offered by:
- legal practitioners
- financial advisors
- lenders, banks and brokers
- estate agents
Ask the owner, locals or agent about:
- the neighbours
- noise or other issues
- the landlord (friendly or stand offish)
- the property manager (how responsive they are)
- ask about nearby public transport
- kinder gardens and schools
- local shopping, parks and facilities
Budget before you buy property
Carefully assess your financial situation and desired standard of living when deciding how much you can afford to borrow and repay. Know what you can afford.
- your circumstances and financial commitments
- any future plans: for example, starting a family could mean a drop in income
- school fees, prolonged holiday, starting a business
- other possible changes, such as interest rate rises or unemployment
Costs when buying a property
Consider the costs of buying a property, including:
- legal and conveyancing fees
- loan establishment fees
- government charges such as:
- land transfer duty (formerly stamp duty) - for more information visit the
- goods and services tax (GST)
- the fire services property levy
- building and pest inspection fees
- moving costs
- utilities connections
Also consider ongoing costs of property ownership, including:
- insurance (building and contents) if applicable
- property rates
- body corporate fees (if applicable)
- land tax (if applicable)
- Maintenance and repairs
Don’t overlook any concessions you may be eligible for, such as:
- first homeowner grants for buyers of new homes
- land transfer duty reduction
For more information on the first homeowner grant, visit your State government website.
When getting a home loan (mortgage) remember:
- you do not have to take the full amount offered by the lender
- instead, work out the amount you need and feel comfortable borrowing
- to use loan simulators to see how the amount borrowed, the loan period and the frequency of repayments affect the time you will need to pay off the debt
- ask questions about fees and charges
- study the fine print on contracts, brochures and printed material
- be wary of financial advice or referrals from mortgage brokers
- shop around and compare banks, products and services
Shop around and compare banks, products and services and remember, it is illegal for estate agents to give financial advice.
You can find budget tools and information about home loans and mortgages on the MoneySmart website - Buying a home page.
Shop around and rigorously compare banks, building societies, brokers and each of their products and services.
Keep your eye on the market
Be aware of market fluctuations and changes during property sales campaigns and be prepared to consider raising or lowering your offer in ever changing markets.
The advertised price is not always the price at which a property will sell. The sale price is what you or the highest bidder is prepared to pay for the property.
Check newspapers and online advertisements to see whether the advertised price for a property you are interested in has changed.
Make a realistic offer based on your understanding of the value of the property. Be careful that your offer is not too low – if another keen buyer makes a higher offer, the seller may accept it and enter into a contract with the other buyer.
Try to make your offer as attractive as possible to the seller in terms of price, settlement period and conditions as well as your price offer.
If what you are prepared to pay for a property does not match the asking price you should consider offering favourable terms and conditions that suit the seller and you.
Put a deadline on your offer – but be prepared to walk away if the seller does not accept this price.
Be aware that you may not be the only buyer negotiating for a private sale property. A seller can accept an offer without notifying you, and does not have to accept the highest offer.
In a competitive market be prepared to miss out. Other buyers may have more money to spend on the property. Don’t be tempted to go beyond your limit and buy a property you cannot afford.
Do not rush into buying property
Never rush or be pressured into making hasty decisions.
Discuss all details of the property with family, close friends and your lender.
Make sure you are committing to the right property for you.
You will feel more confident about your investment if you make an informed decision.
Since 1 October 2014, all sellers or estate agents acting on their behalf must make a 'due diligence checklist' available to prospective buyers at open for inspections. The checklist aims to help buyers identify whether any issues that may affect the property and impose restrictions or obligations on them, if they buy it.
Visit the local Council planning office and check what is being planned for the area, changes in zoning and any heritage listings.
A Section 32
The vendor/seller must provide a Section 32 statement (Victoria). Each State has a similar vendor statement regulatory requirement likely called a by different name.
The vendor’s statement (or section 32) is usually prepared by the seller’s solicitor or conveyancer.
The vendor’s statement contains information about the property’s title, including mortgages, covenants, easements, zoning and outgoings such as rates.
It does not include any information about the condition of buildings, whether they comply with building regulations or if measurements on the title are accurate. This responsibility is on the buyer to find out about anything that is not covered in the vendor’s statement.
The vendor’s statement is a legal document and must be factually accurate and complete. If the vendor’s statement contains incorrect or insufficient information, you may be able to withdraw from the sale or take legal action.
You should have the statement checked by your own solicitor or conveyancer prior to purchase.
A conveyancer is a person other than a solicitor, who is licensed to undertake property conveyancing work and to do legal work or give legal advice with respect to the transfer of title.
They can be engaged by a buyer to conduct searches on title, check the vendor’s statement and advise on the terms and conditions in the contract of sale.
• must have professional indemnity insurance
• hold prescribed qualifications
• contribute to the Victorian Property fund to compensate consumers who lose money as a result of any fraudulent use of trust funds
If you decide to use a conveyancer make sure that they are licensed. Details of the conveyancer’s license are required to be displayed on the conveyancer’s letterhead.
It is advisable to obtain written quotes before choosing a solicitor or conveyancer.
Read property and loan contracts before you sign
You may come across different types of contracts, including loan contracts and contracts of sale.
Read and understand the document before you sign. Make sure you understand all terms, conditions and fine print.
Ask for any verbal agreement in writing, so you know exactly what you are committing to.
If something is unclear, ask for an explanation. If you are still uncertain, seek independent advice before signing.
Keep a copy of all documents you have signed.
Contract of sale
As a buyer you will sign a contract of sale when making an offer on a property. The contract contains details of the property, names of the seller and buyer, price, the deposit paid, balance owing at settlement and any special conditions such as a clause ‘subject to finance’.
Your solicitor or conveyance representative should check the details on a contract in preparation for both buyer and seller to sign.
A cooling-off period of 3-7 clear business days applies to non-auctioned residential property sales regardless of price. The cooling-off period allows the prospective buyer time to consider the offer, and begins from the date the buyer signs the contract, not from the date the seller signs it.
To end the contract within that period, the buyer must give written notice to the seller.
A buyer will be entitled to a full refund of monies paid, less $100 or 0.2 per cent of the purchase price, whichever is the greater.
The cooling-off period does not apply in the following circumstances:
• the property was purchased within three clear business days before or after a public auction
• the buyer received independent advice from a solicitor prior to signing the contract
• the property is used mainly for industrial or commercial purposes
• the property is more than 20 hectares in size and is used mainly for farming
• the buyer has previously signed a contract for the same property with the same terms
• the buyer is an estate agent or corporate body
Goods and services tax (GST)
Generally GST only applies to the purchase of new homes. It does not apply to established homes unless the seller is registered for GST. You can check a seller’s GST status at www.asic.gov.au.
Do not sign the contract without checking whether GST applies. If uncertain, seek professional advice.
If GST applies to a sale, it must be clearly specified in the contract whether the price is inclusive or exclusive of GST and how it will be calculated.
When is it sold?
For a private sale, when both parties have signed the contract, the property is sold. All parties who sign the contract must be given a copy.
The sale is finalised at settlement when all checks have been made, the title and transfer documents exchanged, and the balance of the purchase price paid.
For an auction, after the fall of the hammer, no more bids will be accepted and the property will be offered to the highest bidder. However, there is no legally binding contract until both the buyer and seller have signed the contract of sale. The buyer will also be required to pay the deposit specified in the contract (unless otherwise agreed). As this is an auction, the buyer cannot make the contract subject to conditions and there is no cooling-off period.
The sale is finalised at settlement when all checks have been made, the title and transfer documents have been exchanged and the balance of the purchase price has been paid.
Buyers are entitled to make an inspection at any reasonable time one week before settlement. The contract of sale outlines the seller’s obligation to hand over the property in the same condition as when it was sold.
Settlement is the date on which the balance of the purchase price is paid to the seller, and the title of the property is handed over to the buyer. The seller sets the date of settlement in the contract.
This is an official process conducted between legal and financial representatives of the buyer and seller. The settlement date is also the date on which the buyer can take possession of the property, unless otherwise arranged.
At settlement all outgoings such as rates and other charges will be adjusted between the seller and the buyer. The seller is responsible for rates up to and including the day of settlement. The buyer is liable from the day after settlement.
The settlement period is usually between 30 and 90 days but a buyer may be able to negotiate an alternative settlement period with the seller prior to signing the contract.
After the sale
There are several steps before the buyer can take possession of the property.
Even though the property may be covered by the seller’s insurance up to the date of settlement, it is recommended that the buyer take out building and contents insurance effective from the date of signing the contract.
The buyer’s lending institution will generally require the borrower to take out insurance on the property to safeguard the lending institution’s interest as the lender.
Once settlement is completed, the buyer can collect the keys from the seller and take possession of the property.
Stamp duty, now known as duty, must be paid by the buyer within three months of settlement. It is calculated as a percentage of the purchase price or the market value of the property, whichever is the greater. Duty applies to the GST-inclusive price of a new property.
Transfer of land
This document transfers the land from the seller to the buyer. It is lodged with the Land Registry office and describes how the land is to be held if purchased by more than one person.
Please take note: Statements, information, comments and suggestions made or given on this website are offered as guidelines and for general information purposes only and should not be relied on as a substitute for professional legal, regulatory or financial advice when buying, investigating, financing or contracting the purchase of a home or property.
A CHECK LIST for BUYERS
Make sure you have:
- worked out your budget
- set yourself the maximum you are prepared to offer or bid
- developed a strategy for bidding at auction or for making an offer for a private sale
- you a plan if buying at auction, arranged a pre-approved loan
- selected your preferred suburb/location
- worked out what features you want in a property
- inspected similar properties in the area and check sale results
- understood the differences between a private sale and an auction
- established if the property requires a building inspection
- specified and agreed the level of service to be provided by your legal and conveyance representative
- purchased a kit if you decide to do your own conveyancing
- the inspection report, Section 32, particularly pre an auction
- worked out if you need to make the purchase subject to a building inspection for a private sale
- worked out if property require a pest inspection
- your legal practitioner or conveyancer check the section 32 vendor’s statement (it may be called something else in some States)
- been provided the contract of sale and checked for unusual terms or conditions
- knowledge about your cooling-off rights
- agree the settlement period and other conditions of the purchase
- confirmed items that appear to be fixtures of the property and which items (personal chattels)that the seller may remove at settlement
- organised your deposit, so you can pay when required by the seller
- checked all items you believe come with the property are in good working order and stated on the contract of sale
- paid the deposit of sale agreed
- check those items on final pre settlement inspection
- received, checked and signed the contract of sale
- arranged insurance for the property
- receive the keys and other items agreed for the property
- lodged documents with the Land Titles Registry
- pay State (stamp) Duty
Most importantly go to https://sellitswapitbuyit.com where ALL property owner sellers, investors, developers, home builders and real estate agents can list properties for Sale, Rent or Swap FREE online.