Seven steps to a stress-free property purchase
Here are my seven tips for stress-free property purchase.
1. Set your goal. Once you know the type of property you want, and have a rough idea of what it’s likely to cost, set yourself a target for saving a deposit. Remember if your deposit is less than 20% you may need to pay Lenders Mortgage Insurance, or get a guarantor to offer their property as security – be sure to factor this into your plans.
2. Talk Finance. Before you start actively looking for a property, it’s worth speaking with your finance adviser. They’ll give you an accurate assessment of your borrowing capacity (more accurately than an online calculator) and determine your eligibility for government grants. Your adviser will explain all the government fees and charges and ensure you’ll be eligible for a loan when the time comes to buy.
3. Get the green light. Whether you’re bidding at auction or placing an offer with an agent, you’re in a stronger position if you’ve got a pre-approval. Pre-approval is essentially a green light from a lender to spend up to a certain amount. This means you’ll know how much you’ve got to work with.
4. Kick off the search. Looking for a house is always more time consuming than you expect, so do schedule plenty of weekend time to attend ‘Open for Inspections’. Once you’ve found a place you like, make sure you ask your adviser about organising a valuation and if necessary, a building and pest Inspection.
5. Close the deal. Whether you buy at auction, by private treaty or off-the-plan, securing a property is cause for celebration. But before you pop the champagne, you’ll need to move fast to organise a few important things:
- A holding deposit, usually $500 to $1,000 or 5-10% for auction purchases
- A solicitor/Conveyancer – your adviser can recommend someone they trust to take care of the legal work
- Notify your adviser – so they can quickly move you to formal approval
6. A few formalities. Your adviser will sort out formal approval. In many cases this will be done before the cooling off period ends if you’ve bought by private sale or off-the-plan. During this time the lender will value the property, process your application and make a final credit assessment. If you haven’t already, you’ll also need to pay the full deposit. Your adviser will confirm formal approval and send you documents to be reviewed (with your legal adviser) and signed.
7. You’re ready to settle. The dates of settlement will probably have been agreed before the sale. The lenders and legal representatives from both sides will now organise the exchange of money and titles. On the day of settlement you can collect the keys!