Successfully Purchasing Real Estate
Successfully purchasing real estate is one of the biggest and most important decisions you may make. Below are some tips to assist you with this decision.
1. Finance – what can I afford, what are the costs, what’s the best deal I can get?
Whether you are looking to buy your first property to live in or a property for investment, I recommend seeking pre-approval of finance from a professional. In doing so you know how much you can afford to borrow and likewise how much you can spend when buying real estate. This will provide you will greater flexibility and confidence when negotiating the purchase of a property. To obtain pre-approval of finance, speak to a professional like your current bank manager or one of their mobile mortgage managers or a reputable mortgage broker.
Costs and Terms:
Many of the costs you may need to pay when successfully purchasing real estate will vary depending on your individual circumstances, such as;
· are you a first home buyer, a home buyer or an investor,
· are you buying more than one property and in which state,
· what is the purchase price of the property,
· how much are you / can you borrow,
Mortgage Insurance – depending on the loan amount you borrow, some lenders may require you to have mortgage insurance. Mortgage Insurance protects the lender against any loss should a borrower default on their loan and is generally paid for by the borrower separate to the loan.
Other buying costs typically not covered by your loan can include; government stamp duty and transfer of ownership duties, registration costs, loan establishment costs, other bank fees and charges, legal fees paid to your Solicitor for the conveyancing and searches they may conduct on the property, insurance premiums, adjustments for rates, water and if applicable body corporate fees, building and pest inspections, moving costs.
Interest rates and ongoing fees for the loan – what interest rate is the lender offering, is this a fixed or variable interest rate, what restrictions does the loan have in making additional repayments? Does the loan have a monthly, quarterly or annual fee you need to pay in addition to the interest rate?
2. Research – where do you want to successfully purchase real estate?
Research – just about everyone is online these days, “except possibly my Mother” and so is the information you are looking for – you certainly are online if you are reading these tips!
A good Real Estate Agent will be able to give you an overview of the suburbs they advertise as selling in. There are many personal factors that may affect your decision to successfully purchase real estate in a particular suburb or if you are an investor, that are key to future capital growth. Factors such as;
· Location Location Location – I’ll say no more.
· community services and infrastructure.
· safety of the neighbourhood.
· proximity to schools, school zoning.
· medical services.
· shopping centres.
· sporting, social and community clubs/societies
· cultural and entertainment facilities
· public transport.
· parks, cafes, restaurants
· proximity to work
· aesthetic characteristics of the suburb, street, property.
· sales history and median prices.
3. Inspecting Properties
Compiling a short list of properties that you may want to inspect will save you time. In coming up with this list you would have already done your research and determined what you want in a property, ie. number of bedrooms, bathrooms, living areas, study, pool, deck/entertainment area, backyard, views.
Ask the agent questions, such as;
· are there any special terms of sale, eg. extended settlement date, the seller may want to rent the property from an investor while their new home is being built.
· are the fixtures included [screwed in, bolted in, plumbed in, glued or nailed to the property structures], eg’s ovens, hot water system, clothes line, television antennae, ceiling fans, air-conditioning.
· are the chattels included [freestanding movable items], eg.s washing machine, potted plants, dishwasher, pool and spa equipment. These should be specified in the contract of sale.
4. Making an offer to successfully purchase real estate
Once you have decided that you would like to make an offer to purchase real estate, the agent can assist you with making the offer by going through a number of documents including the contract of sale.
Examples of what the contract of sale allows you to include; conditions such as subject to finance and building and pest inspections, included and excluded chattles, deposit amounts, settlement dates.
Once these documents have been signed by the buyer, the negotiations between the seller and buyer will begin, noting any further negotiations between the parties must be in writing with all changes initialled by both parties until you both come to a mutual agreement.
Once both parties have reached a mutual agreement, it is important for the buyer to insure they satisfy any conditions within the period specified, eg. you may have stated 14 days for finance, building and pest inspections to be completed, which is generally 14 days from the date of the contract of sale.
Importantly, have you insured the property you are buying? Your agent would have covered this when going through the documents to make your offer.
5. Settlement for the successful purchase of real estate
Once a contract of sale becomes unconditional, it’s time to get organised if you haven’t already. It is recommended that you undertake a pre-settlement inspection of the property, with the agent to ensure you are satisfied everything is per the contract conditions.
Some tips leading up to and after settlement include:
· have you organised your removalist and packing boxes
· have you signed the paperwork for the loan with your lender or mortgage broker
· maintain regular contact with your solicitor to address any issues that may arise as settlement approaches. Your solicitor will attend the actual settlement on your behalf.
· Once the agent has received notification from both parties solicitors, the keys can be released to the new property owner.
· organise utilities to be connected to the property you are buying
· mail redirection
Congratulations, you have successfully purchased real estate, Enjoy!