10 STEPS TO BUYING YOUR FIRST HOME

  1. Pre-approval

    BEFORE looking for your first house, you will need to gain a pre?approved limit from your bank. This is the amount the bank will be willing to lend you. This will assist you in setting your budget and ensure that you are not looking for properties above your budgeted price range. At this point, you should already have savings for a deposit. Somewhere in the range of five to 10 per cent is generally regarded as acceptable. A mortgage broker can also assist you with this process. Ensure that if you do engage a mortgage broker that they disclose their commission and fee structure to you.

  2. Choosing a property

    Now that you know how much you can spend, it's time to start looking. It's important to keep in mind several factors:

    1. Most apartment complexes have a quarterly body corporate fee for maintaining the communal areas and facilities.

    2. Know your Ownership Costs. Inquire about the amount you will need to pay for rates. Rates are a state or territory government tax, levied on property owners to provide funding for a wide range of municipal and other essential services.

    3. When buying Off the Plan it is important to check the inclusions list on the property you are viewing to ensure that you will not be required to pay extra for basic inclusions such as carpet, tiles or fittings.

  3. Placing a deposit and drawing up a contract

    Once you have found the property you want, the agent or developer will require you to place a $1000 deposit to remove the property from the market. At the same time, the sales?person will take your details so that a Contract of Sale can be drawn up.

  4. Conveyancing

    At this point it is also important that you engage the services of a solicitor or conveyancer. At the time of paying the deposit, you should provide the contact details of your solicitor to your salesperson to prevent possible delays in the issuing of the contracts.

    They will liaise with the developer on your behalf to arrange for the transfer of property ownership, review the contract and hand over all necessary information to your lending institution.

    Your solicitor should also advise you of the amount of Stamp Duty you will be required to pay (and assist in arranging a Stamp Duty concession if applicable) and will also liaise with your financial lender to arrange for your First Home Owner's Grant to be paid to you, if you opt not to apply for it yourself.

  5. Finance

    At this point, you will need to inform your lending institution of your decision to purchase. They will advise you on:

    1. How much mortgage insurance you will be required to pay (if any)

    2. Details of the loan you have selected, such as total amount borrowed, interest rate, and repayment amount and frequency

  6. Signing the contract

    Once you have provided your sales? person with your solicitor details, they will arrange for a contract to be sent to your solicitor. They will explain the contract, what is expected of you, and what you should expect from the seller. It is generally accepted that the exchange of contracts (i.e. you signing the contract and paying the balance of the deposit) should occur within 14 days of the contract being issued.

    It should be noted that once the contracts have been exchanged, the purchase is legally binding, so it is important that you are 100 per cent happy with your purchase at this point.

  7. Post exchange

    Once the contracts have been exchanged, you will need to wait for the property to be completed. During this time, depending on your builder or developer, you may also need to select the internal colour scheme you would like your home finished with.

    This is also a good time to save as much as possible to reduce the overall amount you will be required to borrow from your lender at settlement.

    Throughout the construction phase, you can contact your salesperson to check on the progress of your home, and, if a time can be arranged, meet your salesperson at the block for a tour of the unfinished home.

    When your home is nearing completion you will be contacted by your salesperson to arrange a time for you to perform the pre-settlement inspection. This involves you meeting a representative at the property to review it for any defects or maintenance issues prior to you accepting ownership. The developer will also issue a settlement notice to your solicitor to arrange settlement.

  8. Settlement

    Once all issues raised at the pre? settlement inspection have been resolved, you will be contacted by your salesperson to arrange handover. At this point the balance of payment is due to be paid. Your solicitor will contact your lender to confirm the settlement details.

  9. Moving in

    Congratulations, you are now the proud owner of your very first home! Your salesperson will contact you to arrange a time for you to pick up your keys (unless you received them at settlement via your solicitor).

    Remember, it is important to connect electricity, gas and water services at least five days prior to occupancy. You should also contact your insurance provider to arrange home and contents insurance, as once settlement has been completed you will be liable for any loss or damage to the property.

  10. Defects and Maintenance

    All new homes have a 90-day period in which the owner can record any non-urgent defects or maintenance issues. Once the 90 days have lapsed, you will be contacted by your salesperson to provide them with a list of any issues that require attention. The builder will then make a time with you to inspect the issues, and discuss with you a time to fix them.

    Any urgent issues that require attention before the 90-day deadline (i.e. leaking hot water system, no hot water, etc.) should be communicated to the relevant maintenance company. They will make a time to fix the problem, usually within 48 hours.

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