Buying a property is a big decision, and there is a lot to consider.
We are here to offer practical tips to help you along the way.
Set your budget and save for your purchase deposit
These two points go hand in hand and form step number one on the road to purchasing property.
Setting a budget is an important first step in the property-buying process. Your property budget will be dependent on your regular income, your savings history, dependents, outgoing debt, and ongoing living expenses. A good place to start is with an online borrowing power and mortgage repayment calculator. An even better place to start is by making an appointment with your lender so they can perform a borrowing power calculation for you.
In most situations, before buying a property, it is essential to ensure you have a deposit saved. Most lenders require a minimum 20% deposit to avoid paying lender’s mortgage insurance; however, some lenders may have loan products that allow individuals to borrow up to higher percentages of the property value.
Compare loan rates
Contact different lenders to obtain loan options personalised for your situation.
With many lenders to choose from, you may decide to use a mortgage broker to find loan options for you.
As most consumers need a home loan to finance property purchases, it is highly recommended to engage with your lender or mortgage broker early to see how much you can afford to borrow before making an offer on a property.
This is known as finance pre-approval.
Property purchase costs
Along with working out how much you will need to save for your initial deposit and what your ongoing mortgage commitments will be, it is important to consider additional upfront costs such as conveyancing, solicitor’s fees, government stamp duty, and building inspections.
Do your research
You will need to have a good idea of where you want to buy and the situation of the property market in your preferred locations. Look at suburbs that suit your needs and your budget.
A great place to start is online. There are lots of property comparison sites that will give you an indication of the average sale price of houses, land, and units in the areas where you are looking to purchase. Start attending open homes, speak with local real estate sales consultants, and use the time to perform a thorough property inspection.
Once you have a budget in mind it is time to define your non-negotiables. Do you need a secure backyard for your children and or pet/s? Is it important for you to be within driving distance to medical care? Do you require an additional bedroom for your growing family? Making a list of aspects you are not willing to compromise on will assist you in sorting through all the options that are available to you.
What is finance pre-approval?
This is where the lender/loan specialist assesses your personal financial situation and provides you with a figure you may be able to borrow. Pre-approval is intended to be a guide that your loan application fits the lender’s criteria. It is essential, however, to acquire full, unconditional loan approval, preferably before committing to a property purchase.
How to make a formal offer
The best and most solid way to make an offer to purchase property and avoid any confusion or disappointment is to make your offer in writing on a Tasmanian Particulars of Sale (Contract of Sale).
The contract of sale is an important legal document containing the details of the property you wish to purchase, the price you are offering for the purchase, the purchase sales deposit you will be making, and it also outlines all the various clauses your offer may be subject to, such as building inspection or finance (loan funding) to name a few.
Our Kate Storey Realty sales team will provide you with a contract and a step-by-step guide to assist you in making your offer to start the process.
The sales consultant will then present your offer to the sellers (Vendors) to see if it is agreed upon.
When your purchase offer has been accepted
This is where the process becomes exciting. When your offer is accepted, all parties (the purchasers and the sellers) will have signed and dated the contract.
At this stage, you will also be asked to nominate a solicitor to act on your behalf for the property transaction.
You will also be asked to pay your sales/purchase deposit to Kate Storey Realty within the timeframe stipulated in the contract and to commence the necessary steps to meet all clauses agreed upon within the contract.
Unconditional sale
Once all the clauses have been satisfied in the contract, the sale then becomes an unconditional sale… meaning the property is now SOLD and proceeds through to completion of the purchase, i.e. – Settlement day.
Completing the purchase
Before settlement, your solicitor will undertake the necessary searches you have requested with respect to the property, and your financier will prepare the mortgage documentation.
Our sales team members will contact you to arrange a pre-settlement inspection. This is your opportunity to ensure all appliances at the property are in working order, all chattels are present, and that the property is as you recall from the time you signed the contract.
Settlement Day
On settlement day, this is when the monies and transfer documentation will be completed by your solicitor.
Your solicitor and the vendor’s solicitor will send formal written notification to the agency to advise of a successful settlement.
Once the agency receives both the seller and the purchaser’s solicitor settlement authorities, the agency is then legally allowed to release the property keys to you. Possession of the property usually takes place on the settlement day, although the seller and buyer can agree for these dates to be different.
Within a few days of settlement, your solicitor or financier will register the necessary documentation and mortgage transfer with the Land Titles Registry Office.
It is paramount to note that Kate Storey Realty is not a financial adviser. You should seek independent legal, financial, taxation, or other advice to check how our website information relates to your unique circumstances. Kate Storey Realty is not liable for any loss caused, whether due to negligence or otherwise, arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.