Buying your first home is not like grabbing lunch. The period of time between offer and settlement involves a number of steps, each of them requiring specific actions. That’s why the process of buying a property in Australia can actually be pretty complex.
If you already have a home loan sorted, you have a good idea of what’s involved before you offer. But what about when you’ve found a home you love? What do you do when you’ve decided a property you want in your budget is ‘the one’? Let’s look now at the most common steps in the process.
Do Another Inspection
Walking through any home on a sunny Saturday morning after a hard week at work and two coffees put away will make you feel positive about the four walls and the roof around you. If you return for an inspection of a property on a grey Monday evening with peak hour traffic jamming up the street, you’ll have a different impression.
Ultimately, you’ll look at a home different when you’re simply browsing versus actively considering it. That’s why it’s always a good idea to go through the home (at least) a second time. If you love it, you’ll come away from a follow up visit assured it really was love at first site. A second trip may also help you spot something new, or realise you don’t like something about it.
Keep in mind a second inspection can give you real power. If you notice something is wrong with the home – such as repairs that should be done, or even some landscaping that should be sorted – you can factor that into your offer, and put forward a lower price.
Once you have decided the home is the one you like it is time to hire a conveyancer. A conveyancer is a lot like your coach who will give you the playbook needed to drive the ball up the field.
They will be able to inspect the contract of sale for you (which you can obtain from the realtor once you indicate you want to make an offer), as well as check out any other issues that could impact your purchase of the property. Unpaid council rates, illegal capital works (like renovations), and any easements that could have impact on any future work you do on the land.
Once conveyancing is sorted, all being well, you can proceed on to making an offer.
Make an Offer in Writing
Some realtors may accept verbal offers. While verbal offers can be a way to get a deal done, in practice the exchange of signed contracts is the strongest and most secure way to buy a home.
If you have discovered a home you love and want to seal the deal, a written contract is best.
Making your offer typically involves you filling out the contract of sale. This will be provided by the realtor on request. Once you have filled out your part of the contract, the realtor will present it the vendor as an offer. If the vendor likes your offer they will sign the contract, and a deal is formed.
Also put a closing date on your offer. You’re not bound to do so but it’s in your interest to. If you are trying to buy a home and leave an offer open without any end date, the vendor can go ahead and put it in their pocket for weeks (or even months) until they decide. Just knowing your offer is a backup in event another one doesn’t come along that is better.
That’s not fair to you, so put a condition on it, like ‘this offer is good for 7 days from [date]’. 7 days is reasonable. 14 if its a rural property (or a really prestigious, or glitzy one) where it may be hard to reach the owners.
Not only does this give you peace of mind that you’ll not be waiting forever, but it also adds a bit of urgency to the vendor’s consideration. They know if they don’t say yes soon they will lose you.
Consider Your Offer Conditions
If you loved the way the kitchen let the air and sunlight in – but then noticed on your second visit it’s because of a hole in the ROOF? – you can make roof repairs a condition of your offer.
Once you are ready to put forward your offer, it’s time to lay out not only the price you are prepared to pay but any special conditions you want to attach. As outlined above, having the offer open for a set period of time is a common condition.
Also the date of settlement, you can stipulate your offer is conditional on settlement occuring in 20, 30, 60, 90 – or more! – days. The exact date is up to you, but usually a settlement between 30 to 60 days is most common in many Australian markets.
‘Subject to finance’ is another common condition, meaning if your offer is accepted you will pay once your home loan has been approved and financed by the bank. An offer being made contingent upon a successful outcome on a formal building inspection (one a professional does to check for any major structural issues or other worries like pest infestation) is another.
You can also put specific conditions on an offer, such as if the the vendor accepts they agree to make certain repairs or improvements (like tiling the roof) between the time of the offer acceptance and settlement.
Keep in Contact with The Realtor
Once you have made your offer, be sure to stick to your realtor like bubble gum to concrete! OK OK, you don’t need to call them every single day – let’s not peeve off someone who is helping sort your new home – but be sure to check in regularly once you’ve made your offer.
Real estate agents deal with a whole ton of properties, and sometimes that means it might take a while to get back to you. Some patience here is essential, but it’s also important to keep in mind yours is unlikely to be the only offer on the property. Staying in regular communication with the realtor ensures whether your offer is accepted or rejected, you’re ready to respond to it.
Circle Back to Your Conveyancer (Or Solicitor)
Once you’ve received word your offer is accepted it is then time to get in touch with the professionals once again to formalise the process. Whether this is the same conveyancer you used before, or a solicitor who can also assist with the purchase of a home. Either way, be sure you get a professional to put the finishing touches on the deal to minimise any risk that can always come with buying something as big as a property.
If the home is hit by lighting and catches fire a day before settlement its the current owners problem. If the lighting strikes a day after settlement, its your problem. That’s why if you do intend to take out insurance (and it is a wise idea to do so) be sure its arranged before settlement occurs.
Do a Final Check After Settlement
Once the date of settlement has occurred it’s important to do a quick inspection before you pull up the delivery van and start unloading the couch. All being well, your new home should be in the same condition as it was when you first inspected it (or improved if you make an offer conditional to certain repairs being done).
But if you do notice anything broken, damaged, or otherwise unacceptable, follow it up. If the home you purchased has been damaged since your offer was accepted, it is the responsibility of the previous owners to fix it. This can be particularly common with homes that were owner-occupied, or had tenants in them.
If it’s just a matter of replacing a couple of lightbulbs you may not be fussed, you do have a right to see a contract is enforced. So, you can also place a quick call asking them to repair it.Given you’ve likely just paid hundreds of thousands of dollars to someone, they usually won’t be fussed about calling a tradie to fix something for under 1 thousands dollars. Make that call if you need to!
Have a Party
Buying a home is a long process with a lot of work involved. Once settlement is finished and you officially own your new home there’s just one thing left to do: have a party to celebrate!