10 STEPS TO BUYING A HOME

1. BE FAMILIAR WITH THE MARKET

Research the property listings in the newspaper and online to gain knowledge on the areas of interest. Speak to local real estate agents and ask them and yourself key questions, the informed buyer is a smart buyer, make sure to educate yourself thoroughly on the area and take into account price, location, value, size and if it's suitable for your lifestyle.

Is it in my price range?

Does it suit my needs?

How does the properties price compare to my research?

2. DO THE MATH

Once you're knowledgeable on the property market, you need to determine how much you can afford to spend and repay. Your ability to borrow is determined by your income and financial commitments, as well as your current savings and credit history. We can help you work out how much you can borrow and what type of loan will suit your needs. Here at Loretta Davison Financial Solutions we have access to some of the industry's most competitive products as well as contact to Australia's most competitive lenders. Here at LDFS we plan to advise you on the hidden costs that are involved with taking out a mortgage (e.g, stamp duty, taxes, legal costs etc.....) as well as prepare you in the case of a sharp spike in interest rates. We can also assit you in applying for the first home owners grant and check your eligibility for stamp duty discounts.

3. GET APPROVED

Getting your finance pre-approved is the next step to buying your home. Although some people leave this step until after they find a property, pre-approval is suggested as it gives you a realistic budget when searching for a house, it also ensures that you are treated as a serious buyer by agents.

4. MAKE A PROPOSAL

When making an offer or proposal to the seller, they may accept it right away or begin to negotiate on the price or other details of the sale. If you aren't able to agree on a price you are able to withdraw your proposal. On the other hand, if the offer is accepted, the contract is usually forwarded to your legal representative who will then begin to do the necessary searches to protect your interest while simultaneously assisting you in obtaining a formal approval for the amount required for the purchase. If you purchase a home at an auction you are required to pay a deposit of 10% of the purchase price on the day. The contracts will then proceed to be exchanged without a cooling off period meaning you may lose your deposit if you do not proceed with settlement. Knowing this, it is very important to clarify the full contract as reviewed by your legal representative and all necessary searches are completed with finances arranged before the auction.

5. BEIGN THE PAPERWORK

Contact us withe the details of the property you wish to buy so that we can begin the procedure of obtaining a formal loan approval. At this stage the lender may organise an independent valuation of the property, to make certain that the amount you're offering is able to be financed. This is where you are required to provide a range of documentation. After this the seller will make the contract of sale available to your solicitor or conveyancer for review. The contract outlines your offer, the date of settlement and any special conditions that must be met before the sale goes ahead(e.g. subject to bank finance). The contract is an enforceable and legal document. Make sure you take the chance to inspect the property once more. checking all fittings and fixtures are in place.

6. ORGANISE THE INSURANCE

Proof of building insurance is required by your lender as part of the home loan process. We can help arrange this so that the insurance takes effect from the date of settlement or even before settlement if you are not aware that the seller has a current insurance policy. Loretta Davison Financial Solutions can help you arrange cover immediately. A Certificate of Currency will be needed from the body corporate insurers if you are purchasing a Strata Title unit, villa or townhouse.

7. ORGANISE INSPECTIONS

Before you exchange contracts, it is wise to have a building inspection undertaken so that you can guarantee the structural integrity of the home. This is a critical point to take as the seller won't provide you with any guarantees on the structural soundness of the property. Checking the property for pests such as termites in your potential new property is very important. This is because the building inspection doesn't include the detection of termites and other timber destroying pests.

8. EXCHANGE CONTRACTS

After the exchange of contracts, a property sale is signed, sealed and delivered. Once you and the seller have both signed the contracts and the buyer has paid the deposit, the agreement is legally binding. It usually takes between 4-6 weeks from unconditional contract until settlement (depending on your contract and state/territory). If there are future developments planned that may affect your home, be sure to check with your local council and state government roads and traffic authority about it. If you're buying a Strata Title property, arrange for an inspection of the books and records of the owner's corporation. Your Solicitor or Conveyancer should guide you through these 'checks' and advise you on the results of these reports.

9. ISSUE OF MORTGAGE DOCUMENTS

Your lender will issue your loan documents including the letter of offer detailing the full terms and conditions of your loan once it has been formally approved. You will receive two copies of the Letter of Offer. One of these copies is to be signed and returned to the lender while the other is to keep for your own personal records. These documents should be checked thoroughly prior to signing as they are legally binding. We are more than happy to help you in signing your documents, however if you choose to seek legal advice in regards to your obligations you will need to contact your solicitor for this assistance.

10. PAY AND SETTLE

Stamp duty is calculated on the purchase price of the property and must be paid at settlement. At the settlement of the purchase, the balance of the purchase price is paid to the seller, and you finally become the legal owner of the property.

CONGRATULATIONS ON PURCHASING YOUR NEW HOME!

NOTE: The process of buying a house will differ depending on whether the house is sold by private treaty or at auction. Rules may also vary in each state or territory.