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Final Steps of Buying a Property

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signing the contract is one of the final steps of purchasing a property

You’ve found a place that you love, and you’ve (double and triple) checked you can afford it (and so has your lender with a pre-approval for a loan). You’ve made an offer to the vendor/real estate agent and its been accepted pending a few checks including the highly recommended building and pest inspection and the non-negotiable valuation from your lender to ensure they are lending money for a solid investment that is actually worth the amount you have offered to pay. 

Keep in mind that if the property is being sold at auction it will be up to you to get these checks done before you bid at auction. Auctions generally don’t have cooling off periods and once the hammer goes down the deal is done. For more info about buying a property via an auction check out these previous posts here and here.  

Building and Pest Inspection 

There will likely be minor things crop up in the very detailed reports, everything from wonky cupboard doors to slightly warped timber floors or dampness in the subfloor due to poor under house ventilation. Generally a report will list issues as either major, minor or a hazard. The major issues would be well worth looking into further and you may even have an opportunity to request these be fixed before the settlement period ends should the sale go through. Issues listed as hazards would be worth considering seriously also as these could put the safety of someone at risk. An example of a hazard might be a balustrade on a balcony which doesn’t comply to current safety standards. Another hazard could be bedroom windows with a fall height of more than 2m which don’t have adequate screens to prevent a small child from climbing up and falling out. Anything which comes up in a pest or building report needs to be carefully considered before finalising the sale, as there will be things that you may need to attend to before you move in, attracting additional costs. Anything the vendor can take care of (at their expense) before you move in is a bonus, but don’t expect it, it will depend on the price you are paying for the property and how keen the vendors are to settle.

Some people will arrange a building and pest inspection before the valuation, it doesn’t really matter which order you do it, as long as the outcome is a structurally sound property which is priced appropriately.

The Contract

If you are happy with the condition of the property, there are no major concerns, and you believe (based on the building report) that the value of the property is still worth the amount you want to pay (some people might lower an offer if some issues arise after a building inspection) the next step is signing the contract.

You will need a lawyer, ideally one who specialises in conveyancing. A conveyancer or conveyancing solicitor will assist you with the settlement process and ensure the title transfer process goes smoothly, checking you (their client) meets all legal obligations and that their client’s rights are protected during the transaction. Its a good idea to read over the contract yourself before making an offer to check the terms of contract, and ideally your lawyer will have a preliminary look over it too to check for anything to be aware of. Some contacts have no cooling off period or might have a very short or long settlement period (the average time is anywhere between 4 and 10 weeks but it could be 2 weeks or six months, so check you’re happy with this).

Many conveyancers will offer a complimentary preliminary read of your contract with charges only applying after the sale goes through, others will charge a nominal fee for their first look through, with more hefty charges coming into play when the deal is finalised. Conveyancer fees could be anything from $1000-$3000 including all property checks and lodgement fees, so be prepared to have this set aside.

Additional Costs to Consider

Other costs that you will have to factor in to your purchase include Stamp Duty (there are some tax exceptions and discounts for first home buyers in some states); removal costs, bank or loan establishment fees if applicable, most banks will require you to take out comprehensive home insurance before settlement too (which can be upwards of $1500 a year), as well as set up costs of electricity, phone and gas if applicable. Don’t forget also long terms costs on top of your mortgage repayments which include strata (if purchasing an apartment) as well as council and water rates. That’s a lot of factor in, and all of the above expenses should be calcuated/estimated as part of your own personal affordability assessment. You might be able to afford the mortgage but can you afford all the other expenses on top of it?

Final Steps

Provided all expenses can be covered, it’s time to sign the contract but first check you’re happy with the conditions. Chat to your lawyer to ensure your understand the terms and if you want to negotiate anything (such as settlement date or anything else) request these with the vendors and your solicitor in order to come up with an agreement and contract both parties are happy with. Once everyone is happy to go ahead it’s time to chill the champagne in the fridge and get out your favourite pen to sign! Your solicitor will take care of the contract exchange and be in touch with the vendor’s legal team to finalise the paperwork.

Meanwhile once the contact is signed your bank will begin the process of getting your loan organized. You (or your solicitor) will need to get a copy of the signed contract to your lender and you will also have to organise verification of identity and as mentioned earlier, comprehensive home insurance for your new property. Settlement usually occurs a month or two after you’ve signed the contract so now it’s time to open the champers and get out the moving boxes!    

If you are ready to buy and want to take advantage of the current housing climate, a fast approval will ensure you are in a position to act when the right property presents itself. The lending specialists at Endeavour can assist you in obtaining a full approval quickly and easily. Whether you’re saving for a deposit or getting ready to bid at an auction, Endeavour Mutual Bank can provide continued support and up to date information along your journey to make the process as simple as possible. The friendly staff at Endeavour can help guide you through the process of applying for a home loan and ensure you are on the right track.

To find out more about preparing yourself for purchasing property contact us or explore our easy to follow Home Buyers Guide for some more handy hints and tips.   

Alison Gallagher is a freelance writer, resourcefulness expert and entrepreneur. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.