House Hunting Advice

• 

  mick123 on 15/08/2013 - 11:43

  +2

  My budget is up to $550 000. The house need to be Close to cabramatta/canley height/canley vale, and it needs to has at least 3 bedroom.

  Don't know the area too well, but looks about right price

  What are the process involved?

  **Loan approval, look for house then:

  rivate treaty - sign contracts with 0.25% deposit, 5 bus. days cooling off (pest check, confirm loan, 2nd thoughts etc) then you pay 9.75% on 5th bus. day. You can request extended cooling off but they do not have to comply.

  Auction - 10% cheque at time of auction/contract signing, no cooling off period.
  Usually, balance 90% at time of settlement, industry standard 6 weeks but look at contract as many are shorter/longer.**

  When do you need to make deposit?

  See above

  What is and how long is the cooling off period?

  See above

  What the best bank to get a home loan from?

  RBA

  What is the associate cost involved when buying a house?

  Stamp duty - on a 550k house - is about 20k i think. Not sure of current incentives from govt and your situation. ie. if waived or not for new house/1st home buyer etc.
  Legal costs - i think 1500
  Loan establishment fee - see your bank
  Furniture and fitout etc

• 

  _Bruce_ on 15/08/2013 - 11:55

  +1

  I am on Victoria, so I am assuming that other states don't differ much.

  What are the process involved?

  1: Talk to bank(s) to get an idea of how much you can borrow.

  2: Look at houses. This will go on for a long time usually. Expect selling price to be much higher than advertised price (location dependant).

  3A: Put in a private offer, seller usually gives you a counter offer, you go back and forth until people are happy. Here your offer can be conditional on finance (if you aren't sure if you will get the loan) or building inspection (good idea) or anything else. Some people put cash down on an offer, but this generally isn't a good idea.

  3B: Win the house at auction.

  4: You now have a few days to sort out finance, inspections, etc. You need to get a lawyer to go over the details and sort things out for you. If the inspections raise issues you can renegociate with the seller. You will also need to pay a deposit (amount specified in the contract).

  5: The contract will specify a date for handover. Before this date you have an option to do a last inspection.

  When do you need to make deposit?

  Depends on the contract, but usually within a few days of the agreement.

  What is and how long is the cooling off period?

  This will depend on the law in your state and I am not a lawyer. The basic idea is that if you sign a contract but decide tomorrow that you were out of your mind you can pull out. There are several limitations to this though, so I wouldn't rely on it.

  What the best bank to get a home loan from?

  Depends a lot on your requirements.

  What is the associate cost involved when buying a house?

  Lots. You have to pay stamp duties, you can look these up for your state. You will also have to pay a lawyer to do the legal work for you. Also allow for moving expenses, new furniture and/or work required to the house and fees to connect services (electricity, internet etc). You may also need to pay to disconnect things at your current address.

  What document do i need to provide the bank to get the loan?

  Depends on the bank. If you have a huge deposit then they won't care. Otherwise you may need to prove your income over the last few months, or in some cases a recorded savings history.

  I am with commonwealth for 7 years and they recently pre-approved me for a $450k loan.

  Be aware that I don't think 'pre-approval' counts for much, it just gives you an idea.

  However the thing is i am still waiting for my Permanent Residence application. So the question is : Do i have to be an Australian Permanent Residence to apply for a home loan. Because they did not ask me when i apply for this pre-approved loan.

  I have no idea, sorry.

  This is not very important because i am buying together with my brother who is a AU resident and has enough borrowing capacity anyway.

  It will matter if you want your name down as an owner of the house.

  Any Tips, advises is greatly appreciated.

  Allow extra money to cope with things that need money as part of the move. Don't borrow as much as you can you will never pay it back. Don't be pressured in to paying more for a house than it is worth - be prepared to let a lot of houses go before you find the right deal.

• 

  ldtl on 15/08/2013 - 12:26

  +2

  sometimes you can do the building and pests and valuation (organised by Broker or Bank) BEFORE paying any deposit or signing any contract, depending on your negotiation skills with the agent/vendor.

  also if possible, try to by there when the pest and buildinig inspector inspects the place, you learn so much more for the next time you look for property (such as mould, leaks, termites, etc…)

  talk to the vendors directly if you can, agents are NOT on your side, and the actual owners, when prompted, may tell you lots of stuff about the property such as faults etc….

  stake out the place and talk to any neighbours you see. every street has issues and its best to be aware of them beforehand.

  engage a solicitor who does free reviews of Contract of Sales, cos your gonna be sending a lot their way.

  unless your very lucky and buy the first property you see, expect to fork out money for building/pest reports, solicitors fees, and valuations for at least a few properties.

  • 

    lisss on 15/08/2013 - 14:27

    also if possible, try to by there when the pest and buildinig inspector inspects the place, you learn so much more for the next time you look for property (such as mould, leaks, termites, etc…)

    talk to the vendors directly if you can, agents are NOT on your side, and the actual owners, when prompted, may tell you lots of stuff about the property such as faults etc….

    stake out the place and talk to any neighbours you see. every street has issues and its best to be aware of them beforehand.

    Really good advice! I wish I'd done this when buying my first home, but you live and learn.

• 

  maximum on 15/08/2013 - 14:04

  On the subject of pest and building reports I have twice sold them to the agent when I have decided not to go through with the purchase. Even if you only get 50% back it saves it being such a waste. This is one reason I hate auctions . You might get a pest / building report and then the bidding starts way over the price the agent gives as a guide. Grrrrr!!!

• 

  lisss on 15/08/2013 - 14:29

  +1

  Since you're not a permanent resident, you'll also need to refer to http://www.firb.gov.au/content/real_estate/residential.asp and get FIRB approval. You'll need to build this into your timeline etc. I'm not familiar with how it all works for private residential sales so I can't help any further (I deal with it for large business transactions).

  "I am a temporary resident and want to buy an established (second-hand) dwelling.

  Temporary residents may acquire one established dwelling only and it must be used as their residence in Australia.

  Temporary residents need to apply if they wish to buy an established dwelling. These applications are normally approved subject to the condition that:
  •the property is vacant at settlement;
  •the property is used as your principal place of residence;
  •no part of the property is rented; and
  •you sell the property when it ceases to be your principal place of residence (the earlier of when you no longer reside in the dwelling or you depart Australia. "

• 

  _Bruce_ on 15/08/2013 - 14:36

  +2

  This is probably a good thing to read:
  http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…

• 

  [Deactivated] on 15/08/2013 - 17:15

  +2

  I think there has been some great advice above.

  Here are some thoughts I have on the subject which might be useful. Inspect a property several times before you put in a bid, including once at night to see how good or bad the light fittings/globes are etc.

  Try to get an idea of the history of the property including how many times it has been sold. I agree that talking to the neighbours is a good starting point.

  Try to find out why the property is on the market. This sometimes gives an indication of how flexible the owners will be on the price they want.

  Do lots of research of relevant house prices in the area. Don't go by the listed prices of other houses, look at the actual selling prices of previous homes.

  Read all the terms and conditions on the loan contract and house contract and get several other people to read them as well.

  I also agree with the suggestion of getting the relevant inspections done.

• 

  Blockey on 16/08/2013 - 09:26

  +1

  My two cents:

  Be patient, take your time and ensure you get what you want for a reasonable price.

  Complain to your bank, they will almost always drop your rate below the advertised rate if you complain.

• 

  bargainfinder on 16/08/2013 - 18:33

  Thank you all for your valuable advices…i ll keep them in mind while looking for my first house. I have decide to let my brother borrow the loan and be the home owner, i will just pay my share.

  • 

    [Deactivated] on 16/08/2013 - 18:56

    +1

    Goodluck

• 

  voteoften on 18/08/2013 - 18:45

  I thought that in NSW, there was a technique called gazumping whereby the seller could sell the property to someone else, even if you had it under contact. If NSW allows cooling off periods, it would likely be during this period. If I were a legislator, I would ban cooling off periods in private sales as the seller may undergo significant costs if someone big notes themselves, signs the contract then realises they can not afford it.

  • 

    Whodis on 18/08/2013 - 23:09

    Once contracts are exchanged I believe gazumping is not allowed anymore. Also that's where the 0.25% holding deposit comes in. You sign, pay deposit and forfeit the 0.25% if you can't follow through.