Steps toward first home ownership
Preparing to buy a first home can be as daunting as it is exciting. It involves stepping into the unknown and trusting the process, while at the same time hoping that the biggest investment will pay off.
If you’ve tagged along on a family member or friend’s house hunt you may have some idea of what’s involved, or perhaps it’s all a mystery to you. It’s important to know what steps are needed to take in securing a house, and the estimated time this can take.
Contract of Sale
Once your client inspects a property and decided it’s a strong contender, make sure they closely read over its Contract of Sale. It’s crucial to be thorough in checking the document, no matter how determined they are to buy the place. It’s always a good idea to get another pair of eyes, ideally those of a lawyer or conveyancer, to check the contract before you sign.
A standard Contract of Sale will vary depending on which state you’re in, but as a general rule it should include building inspection reports and details such as the deposit amount required and the intended date of settlement.
Place an Offer
Once you’ve okayed the contract, it’s time to place the offer. This needs to be done in writing and addressed to the seller or real estate agent. Again this is a step in which enlisting the services of a conveyancer will come in handy, as they can help you draft and review the letter.
Help your client get ready to negotiate once they’ve made their offer, as it’s likely there will be some back and forth between them and the seller. In the meantime, the seller may also be receiving offers from other interested parties, so don’t plan the housewarming just yet. If they come to an agreement on an offer,they’ll need to have the full deposit amount ready to be transferred. You will also need to sign the contracts (again calling on your conveyancer, who no doubt you’ll know quite well by now!).
In some instances a cooling off period applies, so if there is any cold feet, they may be able to get out of the sale at this stage. Keep in mind though that it is likely they’ll lose a holding deposit if one has been made, and it’ll be a headache to cancel after all of the paperwork has already gone through. This is why it’s crucial to check the terms and conditions of the sale thoroughly, and to be certain about the property before you make an offer.
As indicated in the Contract of Sale, the settlement period will be determined by the seller and is generally 4-6 weeks long. Once this period is over, stamp duty as well as the balance of the property (which is where a home loan comes in handy) needs to be paid.
Your client may be feeling both exhausted and exhilarated by this stage. It’s not time to rest just yet—they still have to pack up and move! But they’ll have the keys to the new property in hand, ready to relax and make it your home.