Buying a property
FOR PEOPLE LOOKING TO BUY PROPERTY
Purchasing a property is one of the most important things that many people do in their lifetime and it is also quite often the most expensive purchase that people will ever make. It is very important to do this properly and seek advice for experienced professional people to ensure that it is done properly. This brochure which is produced by the Real Estate Industry Association Inc is designed to assist people PLAN prior to purchasing a property.
LOCATE A PROPERTY
If you have a property already identified that you would like to purchase then you have made a good start. If you have not yet identified a property that you would like to purchase then you can obtain the assistance of a real estate agent. You can ask any real estate agent to help you however we would recommend that you use a member of the Real Estate Industry Association because he has pledged to abide by the Code of Ethics of the Association. A copy of the Code of Ethics is available on request from any member’s office. The real estate agent will then show you properties that he has available for sale. You can use more than one agent if you wish to. When you have selected a property that you like and the price is suitable then you are well on the way.
CHECK THE VALUE
Make sure that the price for the property is reasonable. If you are using a real estate agent ask him if the price is reasonable. If you are unsure that the price is reasonable then request a valuation of the property to be done by a registered valuer. Your real estate agent can arrange this for you. A valuer will charge a fee for doing a valuation but you will receive a certificate which will show how much the valuer believes the market value of the property is. If the valuation shows that the purchase price is fair then you can proceed. If it doesn’t then you should continue to negotiate the price. The real estate agent can help you here.
PLACE A DEPOSIT
You will be required to lodge a deposit on the purchase with the real estate agent or the lawyer acting for the seller. The deposit is usually 10% of the purchase price.
The lawyer acting for the seller will prepare the Contract for Sale. You will need to engage a lawyer to look after your interests. You will have to pay a fee to your lawyer for acting for you. Your lawyer will be able to give you a quote for his fees before he starts to act for you. Ask for your quote in writing. Advise your lawyer of any special conditions related to the purchase especially if you require finance to help purchase the property otherwise you might not be able to get your deposit back if the purchase doesn’t get completed.
Most people get a loan when they buy a property. Make sure that you check for the best possible loan with the best possible rate. Inquire from your bank how much you will be able to borrow before you look for a property so that you are able to select a property that you can afford to buy. Also make sure you know the value of your assets and your superannuation entitlements.
Once you have signed the Contract you should have Insurance on the improvements located on the property. Consult your insurance company or seek quotes for a cover suitable for you.
Sometimes the improvements located on properties are subject to GST. You should check if the property that you wish to purchase is subject to GST before you pay your deposit and determine the amount of GST payable if it is.
Some people are able to get a discount on Stamp Duty and other charges when special conditions apply eg first home loan. Check with your lawyer if you are eligible for a discount.
If you are using an agent to help you buy your property then you are not usually required to pay the real estate agent for helping you. The real estate agent is usually acting for the person selling the property and the person selling the property is the one who pays the commission to the agent.
You are not usually able to get early possession of the property that you are purchasing. You must wait until the date is set by the lawyers for settlement of the purchase. Once the settlement has taken place you are entitled to take possession of the property.
The lawyers and the banks will do the settlement of the purchase after the Lands Dept has agreed to the transfer of the ownership of the property.