Have you found your dream home? are you ready to put in an offer to the Vendor? Here’s what you need to know before you do… I’ve had so many clients recently ask me what they need to know about putting an off in on the home they have just found, and whilst each circumstances is different there are some generally things to keep in mind that will make the whole process a little easier for you.
Get a pre-approval
I always recommend before you start house hunting get a ‘fully assessed pre-approval’ in place. This will save you time and stress as you’ve done all the hard work prior to finding your property so within the 14 days finance all you should have left is a valuation to be completed on the property. Why does it need to be ‘fully assessed? check out this blog here.
The offer
It can be hard to know what to offer a vendor as far as price. Especially if it’s your first home and you’re not sure what the value should be. One thing you can do is ask your Broker for a property report. This report includes an estimate value to help you but it also has information around how long the property has been on the market and other valuable negotiating tools that may help.
The deposit
When you submit an offer and it is accepted by the Vendor you will need to pay a deposit. This amount can be anywhere from $1000 to 10% of the purchase price. once you have paid this amount it is deducted from the sale amount at settlement so you don’t need to come up with additional funds for the deposit. An example would be if you were purchasing a home for $400k and you had $40k savings as your deposit then when your offer is accepted you will need to transfer $40k (your deposit) to the Realestate agents account. They hold onto the funds until settlement and you will only need to pay a further $360k (that would be the loan portion) to complete the funds for the purchase (plus any government fees).
The clauses
Each contract will have a finance, building and pest clause. Usually this is 14 days however you can at times request longer. This is the time frame you have to get the building and pest report complete as well as getting a formal approval (unconditional approval) from your Broker. As you can appreciate should you not have a pre-approval in place, you will only have 10 working days to get a formal approval.
Solicitor details
It’s also a great idea to do some research into who you want to use as a solicitor/conveyancer before you put an offer on a property. This way you can list them on the contract as your solicitor and everyone will have their details to refer to them as they need to.
Get a second opinion
If at any stage you’re not sure about the contract, or you just want to be safe you can send the contract to your solicitor/conveyancer to get them to check it over and make sure you are covered.
Send the signed contract
Once the contract has been accepted and signed by everyone you will need to send a copy to your solicitor and broker so they can begin completing the check they need to do and get working on getting you a formal approval. Don’t forget, once your offer is accepted, depending on where you are purchasing you may need to organise Building Insurance, for more read this blog. If you’re looking to buy your first home but have no idea where to start, make sure you register for The First Home Buyer’s Program today! As always if you have any questions at all please don’t hesitate to contact me.