Disclaimer: Articles in this blog are just opinion of the author or authors. It may or may not be correct. Pls do your own due diligence and pls seek professional advice according to your own personal circumstances.
During the Easter holidays, I met lot of people from the group and made some new great friends. There was one common theme that nearly everyone wants to know the correct process and steps involved to buy the first home.
I am outlining it for everyone’s benefit: –
- First step is to find a mortgage broker and get your preapproval and borrowing power calculations done. You can independently find an expert mortgage broker via searching on google or you can find one of the mortgage brokers from our group or by filling the Contact Us form
- Getting a pre-approval for mortgage will involve lot of paperwork and may take up to 2 weeks to complete it.
- After this step, you will confidently know your borrowing limit and will also have the pre-approval letter from the bank. You will need this pre-approval letter while bidding for properties at auctions.
- Services of mortgage broker are free of cost to you as they get commission from the banks.
- Many times, you will get better home loan rates from the broker in comparison to going via a retail channel of the bank branch.
- Also, brokers have access to lot of banks and hundreds of products and can suggest you the right product based upon your suggestion.
- You should shortlist a suburb based upon commute, schools, apartment, or house, new or old, etc. In the end, consult and do as your wife says.
- Get a competent solicitor on your side. Again you can google search it or get one of the solicitors from the group or by filling the Contact Us form
- Once you view a property and are serious about it, ask the real estate agent to send you the property contract. Solicitors are required to review the contract. Solicitor will go through the contract with you and tell you whether it is good to go ahead with the property.
- Once the solicitor gives a go ahead, ask your mortgage broker to provide you desktop valuation of the property. The report will mention the price range of the property. This will give you an idea on the price you should start the negotiations on the property.
- Once you give the price and it gets accepted, the real estate agent will ask you for the .25% deposit on the property. For a 1 million property, it is 2500 AUD.
- After this point, the property is said to be ‘under offer’ and it enters the cooling off time. It is usually of 5 to 10 days’ time, (Auctions do not have a cooling off period)
- In the ‘cooling off’ time, you can get the ‘building and pest inspection’ done. Your mortgage broker will get the unconditional approval from the bank, it is possible to get in 10 days since you already got ‘preapproval’ done on mortgage. That is why step 1 is important.
- If anything happens in the ‘cooling off’ or if you change your mind, you generally lose the .25% deposit.
- After the 5 or 10 days ‘cooling off’ period, the contract becomes unconditional and the property is marked as ‘under contract’ and the three parties(bank, seller and buyer) and there solicitors wait for 32 days (total 42 days from start) for the settlement to happen.
- The solicitor will do lot of calculations as to sort out the council/water/electricity/strata bills so that the bills are paid by the seller upto the day of the settlement.
- At the 42 day, the settlement happens, and the cheques are exchanged. Property is marked as ‘sold’. Your real estate agent gets an email or fax that he should release the keys to the new buyer.
- That is, it. Shake hands with the real estate agent. Collect the keys along with an expensive bottle of champagne from the real estate agent. Pls give your feedback or ask more questions Contact Us form