HOME BUYERS GUIDE
M E I E R PA U L R E A L E S TAT E . C O M . A U
1
P R I VAT E T R E AT Y & A U C T I O N F R E Q U E N T LY A S K E D Q U E S T I O N S
W H AT I S T H E D I F F E R E N C E B E T W E E N P R I VAT E T R E AT Y, E X P R E S S I O N O F INTEREST AND AUCTION? The fundamental difference between a private treaty and an auction is that a private treaty has an asking price, and an offer can be made, negotiated on and accepted at any time, whereas an auction involves marketing the property with or without a price, and selling it on a specific day. Purchasing through private treaty means you can negotiate a sale price. Expression of interest/Best offer is when a property is advertised for sale allowing prospective buyers to submit confidential offers until a fixed date. Once the date (and sometimes even prior to the date) is reached, offers are presented to the vendor for their consideration.
2
M E I E R PA U L R E A L E S TAT E . C O M . A U
Buying at auction is transparent as each offer is verbal until there is only one bidder left. If the reserve price, set by the vendor, has been met at this point, the property will be sold to them at that price. If the reserve does not get met, the price is open for negation with the first option going to the highest bidder. There is no ‘cooling off’ period when you purchase at auction, and it must be an unconditional contract so you must have your finances securely in place or your property already sold if that is what you need to do.
The information is General and is not specific to any individual circumstances. It should not be used as a legal representation, we recommend you seek your own legal advice.
D O I N E E D P R E - A P P R O VA L B E F O R E A U C T I O N ?
HOW LONG IS THE COOLING OFF PERIOD FOR A P R I VAT E T R E AT Y S A L E ?
Making a bid at auction without the certainty of finance is a high-risk strategy. It makes sense to secure a loan preapproval as this will give you confidence as a bidder and set an all-important limit on your bidding.
Cooling-off period in South Australia is two business days from the day when the purchaser is issued with the Form 1 document. Cooling off can vary for a house and land package sale.
W H AT H A P P E N S I F I B U Y AT A U C T I O N AND CAN’T GET FINANCE?
CAN YOU CHANGE YOUR MIND ABOUT PROPERTY PURCHASE?
When you are the successful bidder at an auction, you make an unconditional and legally binding agreement to complete the purchase. So, if for some reason your finance falls through, you're still liable for the contract. If you breach the contract, you could lose your deposit.
You can change your mind about purchasing a property during your cooling off period. As soon as cooling off has finished, the only way out of a contract is, if conditions are not meet. I.e., finance does not get approved, or a property is not sold. To break a contract for any other reason, you could lose your deposit.
M E I E R PA U L R E A L E S TAT E . C O M . A U
3
P R I VAT E T R E AT Y & A U C T I O N F R E Q U E N T LY ASKED QUESTIONS CONTINUED...
CAN A VENDOR BACK OUT OF SIGNED OFFER? To put it simply, once a contract is signed, a seller cannot back out of a contract for any reason other than conditions of the contact not being met. W H AT C A N G O W R O N G O N S E T T L E M E N T D AY ? There are a few factors which can delay settlement day. Some situations that may cause delays are missing or lost documents, banks not signed off, signatures missing, delayed cheque issuances, and other unforeseen circumstances that may affect you financially. As a buyer you should communicate with your conveyancer and notify the sales agent of any potential delays. If there is a delay in settlement, there could be a default/penalty payment.
4
M E I E R PA U L R E A L E S TAT E . C O M . A U
TOP TIPS FOR THE FIRST HOME BUYERS
AVA I L A B I L I T Y O F F I N A N C E +
First and most important, talk to your bank or finance broker to find out how much you can borrow. This will guide you to set a budget.
ARRANGE HOME AND CONTENTS INSURANCE +
W H AT A R E T H E L E N D E R F E E S ? +
Lenders also have their own fees. Find out what your lenders will charge, this might include application, legal and settlement fees
FIND OUT ABOUT THE S TA M P D U T Y. +
Stamp duty will be added on top of the sales price in the transaction of the settlement.
RESEARCH +
Begin your search for suitable homes within your budget
+
Search for a house that you can turn into home and live in for 5 -10 years
BUILDING INSPECTIONS +
Before signing the contract for your home, you can ask to have a Building and Pest Inspection for the property. This will ensure you know how structurally sound the property is.
Before your lender unconditionally approves your home loan, you will need to organise Building Insurance. It is also a good idea to insure the contents of your new home after settlement.
F I N D O U R A B O U T C O N V E YA N C E R / SOLICITORS FEES. +
You will need to get a Conveyancer or Solicitor. This can be done when you begin searching or as soon as you find a property. These details need to be passed on the agent handling the sale.
+
Your Conveyancer can check for any special conditions in the contract, or caveats & easements.
C O N G R AT U L AT I O N S . You have purchased your home. Before you take possession of your property you will need to connect the utilities to the property, these may include, Gas, Electricity, Phone and Internet.
M E I E R PA U L R E A L E S TAT E . C O M . A U
5
HOW TO BUY AND SELL A H O M E AT T H E S A M E T I M E — WITHOUT LOSING YOUR MIND
You might be asking: Should you try to buy first, then sell—or vice versa? Both have their risks and rewards.
Selling first makes getting the loan or putting an offer on another house easier, but it also means you’ll need to find a temporary place to live. Buying first means that moving will be easier, but it also skews your debt-to-income ratio, making it harder to qualify for a new mortgage—not to mention the difficulty of juggling two monthly house payments. If you decide to buy before your house is sold, make your purchase “subject to sale and settlement” of your existing home and allow longer settlement period. The other options are to apply for a bridging loan, and you’ll often need a fair bit of equity in your current property to qualify for the loan. You should ask your lender whether you’ll be able to secure one before buying another property – it would be a good idea to ask your finance representative to tell you about all your options. Remember: You’re not the only party in this equation. For every seller there’s a buyer, for every buyer a seller. Plan your schedule carefully Before you start seriously searching for a new home—or put your current home on the market—make sure you have a solid understanding of the housing market in your area (and the area where you’re planning to buy). Ask your real estate agent: Is the market weighted toward buyers or sellers? Your best plan of action may depend on whether sellers or buyers are in the more powerful position. One way to play it safe is to keep your mind open to lots of buying options. If it’s a seller’s market, you might find that you’re able to get your home sold quickly, but that the homes you inspect just aren’t up to par, or there is a lot of buyers creating strong competition. If you can widen your search and find multiple homes you’re interested in, you’re less likely to find yourself in trouble if a purchase falls through and selling your current home won’t leave you stranded.
Sold 6
M E I E R PA U L R E A L E S TAT E . C O M . A U
Certainly, selling and buying a house simultaneously will be stressful—but by carefully considering and planning for the risks and hurdles, you can mitigate the stress. If you are not sure what to do, please talk to us. Our experienced agents are here to help you.
BUYING AN INVESTMENT PROPERTY
Thinking about investing in a rental property but not sure how it all works? 1. Before you begin, know what you’re aiming for Consider the goals you hope to achieve. Are you looking for extra income from regular rent payments? Or is capital growth your main aim? 2. Crunch some numbers Do the maths to be sure a rental property fits easily into your budget. Plan well for purchase costs like stamp duty and for regular property-related expenses like council rates, insurance, repairs and maintenance. 3. Get to know your borrowing power Your borrowing limit plays a big role in the type of property you can afford to buy. This is also an ideal opportunity to discuss the investment loan best suited to your needs. 4. Check out listed properties Start inspecting properties for sale. Buying as an investor is quite different from choosing a home to live in. You don’t face restrictions like the need to be close to work or family. However, it does pay to look for properties with broad tenant appeal such as close to good schools, transport, university and facilities. 5. Arrange a pest and building report An independent pest and building inspection will confirm whether the building is structurally sound and free from destructive creepy crawlies. 6.
Make an offer
C O N G R AT U L AT I O N S You have purchased an investment property 7.
Appoint a good Property Manager To find out about our property management services Contact us.
Finally sit back and relax as your property generates returns.
M E I E R PA U L R E A L E S TAT E . C O M . A U
7
Suzanna is friendly and professional. Her service stands out amongst other agents I have met. She allowed me to make decisions easily with space to breathe. Her approach is as a facilitator of the sale to assist and guide you as a buyer. I would recommend Suzanna very highly if you are interested in either buying or selling. SARAH - BUYER
SHOP 8, 394 HENLEY BEACH ROAD LO C K L E Y S , A D E L A I D E S A 5 0 3 2 PHONE: 08 8464 7450 8
M E I E R PA U L R E A L E S TAT E . C O M . A U