Tips for Home Buyers

  • Arrange an “approval-in-principle” loan prior to making an offer on a property, particularly at auction.
  • Be aware that the approval-in-principle is subject to the valuation of the property. The valuation will reflect any unusual characteristics of the property so look for properties that will be readily saleable in the future (away from busy roads/freeways, high tension power lines, etc).
  • If making an offer on a property for private sale, request a ‘subject to finance’ clause for one week to allow the lender to get their valuation done and confirm they can lend to the amount you need, even if you have an approval-in-principle.
  • If you want to have building inspections done, write your own special condition clause for the contract. The standard REIV clause refers only to ‘major structural defects’ as a reason to cancel the sale, so if the inspection shows, for example, a rising damp problem, you may not be able to void the contract. Write your own words along the lines of: ‘subject to building / pest inspection to the purchaser’s satisfaction’.
  • Collect a copy of the ‘vendor’s statement’ from the agent before the auction or before making an offer on a private sale. Ask your solicitor or conveyancer to check that there is nothing out of the ordinary in the contract before you make a commitment. Also check the vendor’s statement as it will show the cost of rates, body corporate fees, etc. Factor these costs into your calculations.
  • If purchasing at auction, the sale is unconditional on the fall of the hammer. There is no cooling off period. You can’t make the sale ‘subject to finance’ or anything else so make sure you have everything in order before you bid!
  • If purchasing through a private sale, you have a statutory 3 day cooling off period. If you make an offer subject to finance/inspections/etc, you only have to pay a holding deposit (generally about $500) until those conditions are satisfied. Then you pay the balance of deposit. The standard deposit for a purchase is 10% but this is negotiable.
  • If you are making an offer on a private sale, make clear the amount of deposit you will be providing at the time of offer. If you are attending an auction, you will need to clear with the agency that you may have less than 10% deposit on the day. Don’t give away exactly how much as it can indicate what you think the property is worth! You can even ask your mortgage broker to contact the agent on your behalf to clear the lower deposit before you make a bid so the agent isn’t aware of your interest in the property.
  • Once purchased we recommend that you get the property insured even though you may not take possession for some months. The reason for this is if anything happens to the property before you take possession and the current owner is underinsured you may not be fully covered.
If you have any other questions please phone us on 03 9832 0802 or complete the form below.