This is sometimes called a “Preapproval". It is a confirmation of the borrowers' creditworthiness. An approval that is conditional on locating a property which is of sufficient value to be satisfactory security to the lender. It may also be subject to providing the lender with proof of the financial standing which you stated in your application, as well as proof of identity and Australian citizenship. You may also be required to reduce or pay out some of your other loans (credit cards or car loan).
Agree on a list of preferences with your partner
|»||These may include location issues, preferred suburb, price range, proximity to family, medical facilities, schools, shopping, transport, house and land, home unit or townhouse|
|»||Also, house details: number of bedrooms, bathrooms, car spaces, pool and how much garden and maintenance work or renovation you are prepared to do|
|»||Make notes on what you have seen and with whom because it is so easy to mix up properties|
|»||Talk it over with your partner. It takes 2 to say “yes”, but only 1 to say “no”|
|»||Negotiate the price|
|»||Have your Conveyancer go over the Contract for Sale of Land with you|
|»||How do you coordinate the sale and purchase so you can move from one home to another without any in between move|
|»||Any “additional security” arrangements which need to be coordinated|
|»||Consider any covenants or easements on the property|
|»||Where is the sewer main in relation to the house and perhaps the swimming pool you may want to build later?|
|»||Are there any onerous special conditions in the contract?|
|»||When do you want to move in to the home?|
|»||When you commit to purchase a property, you take it in the condition it is in|
|»||Pest reports and building reports will give you a good insight into the condition of the property|
|»||There are limitations to these reports because the inspectors cannot move furniture or rip off wall linings but they can suggest if further consultation is needed, say, with a structural engineer or a more invasive pest inspection. It can be most foolish to buy property without them.|
|»||A survey and/or building certificate may be advisable or perhaps “Title Insurance”|
|»||Strata reports will give you an idea of the history of a strata property, eg., any previous structural issues, its neighbour harmony and financial state. A Community search may also be advisable.|
|»||Put the relatively small cost of these in proportion to the price you are paying for the property|
|»||The price you initially negotiated may be renegotiated depending on what you discover|
|»||When you are happy with the price, the inspection reports and you have final, unconditional approval for sufficient finance, then you can commit to purchase the property|
|»||However, sometimes you may want to exchange contracts before you have final approval and before inspections have been done. That is when you exchange with a “cooling off period”. The vendor is locked in to sell but you are not locked in to buy during this period. If you pull out you will lose 0.25% of the purchase price. That can sometimes be expensive but it takes the property off the market and no competitor can “ gazump” you. During the cooling off period, you can do the inspection reports and finalise the finance since you already have preapproval.|
|»||Pay the 10% deposit on exchange or before the cooling off period ends.|
|»||We make inquiries of various Statutory Authorities to determine if there are debts owing by the current owner which a purchaser does not want to inherit.|
|»||Debts like arrears of land tax, council rates and other similar government land based charges.|
|»||Inquiries are also made to find out if any Statutory Authorities are interested in taking part of the property, like council or RTA road widening proposals.|
|»||Stamp duty on the purchase price is now paid, or the exemption obtained for the First Home Buyer who qualifies.|
|»||About a week to 10 days after receiving unconditional approval for the loan the Loan and Mortgage documentation should arrive.|
|»||As soon as it is received call us and arrange to come in and sign so it can be returned quickly|
|»||At this time the house should be insured and the Certificate of Currency of Insurance made available to the lender with the signed security documents|
|»||Your lender tells us when they are ready and how much of the loan is available for the purchase, of course after they deduct their fees and charges|
|»||With the vendor's conveyancer, we agree rate adjustments and settlement figures|
|»||A complete financial picture of the entire transaction is given to you|
|»||This is when you provide the balance of the purchase funds either to out trust account or by bank cheque. We will direct you about who will be the payee.|
|»||You should personally undertake a final inspection of the property|
|»||Take care, settlements don't always happen when they are supposed to, often because of the purchaser's or the vendor's bank not being ready|
|»||You do not have to attend as you will probably be in the process of moving and supervising the removalist|
|»||A final search of the title is made at the land titles office. The title documents are checked and given to the lender and the money is handed to the vendor. financial picture of the entire transaction is given to you|
|»||We fax the agent authorising release of the keys|
|»||Then we call you to collect the keys|
Congratulations, you have survived what I understand psychologists regard as the 3rd most stressful thing you can do. It follows after the death of a loved one and changing your job/career.
When you are buying residential property there are certain benchmarks which punctuate a transaction. Understanding the current status during the progress of this legal pathway will give you comfort in moving towards a successful buying experience in respect of the purchase of residential real estate property whether it is Strata, Community or Torrens Title.
We will advise you in getting property transactions settled quickly and efficiently.
Remember - we are here to help and we're only an email or a phone call away.
Please feel free to email or call the office on 02 4647 7498.