Frequently asked questions when buying real estate.
What are the different ways to buy a home?
There are 4 main ways to buy real estate in Australia
Private treaty – when the vendor, or home owner sets the price they would like to sell their property for and their real estate agent negotiates individually with prospective buyers to achieve a sale as close to this price as possible.
Auction – which is a public sale conducted by a licenced auctioneer. Properties are offered up for bid and if the reserve price is reached the property is sold to the highest bidder
Tender and Expression of Interest are processes wherein you submit a single offer, usually accompanied by a 5 or 10 per cent deposit, and it is accepted or rejected by the vendor.
What are the costs of buying a property?
Deposit – usually 10-20% of the home’s overall cost
Stamp Duty – differs in each state
Lenders mortgage insurance if you borrow more than 80% of the property purchase price
Legal help such as lawyers or conveyancers
Building, pest and strata inspections
Council rates and strata fees
What is the first home buyer grant?
The First Home Owner Grant (scheme) was established to assist eligible first home owners to purchase a new home or build their home by offering a grant. The grant amount is determined by the date of the eligible transaction and each state has different rules and regulations.
Who is eligible to receive the first home owner grant?
To qualify for the first home owner grant you must meet the following criteria: each applicant is a person and not a company or trust, the applicant is a permanent resident or Australian citizen. Each applicant must be 18 years of age or above. All applicants and / or their spouse / de facto, have not owned a residential property, jointly or separately in any state or territory of Australia before July 2000. Each applicant must have entered into a contract for the purchase of a home and the total value of the home does not exceed the cap amount for eligible transactions (different in each state). Must also be the first time an applicant/spouse or defacto will receive the grant and that at least one applicant will occupy the home as their principal place of residence for a continuous period of 6 months commencing within 12 months of purchase.
What is stamp duty?
Stamp duty is a charge which is applied by state governments in Australia and is in relation to the transfer of land or property. The State Government charges may vary depending on the purpose of the property purchased.
What happens on auction day? On auction day if you are wanting to bid, you must register in the bidders record and you will receive a bidders number that you will use when bidding.
The auctioneer will outline all rules before the bidding begins, including their obligation to refuse bids after the hammer falls, to arbitrate bid disputes and also to refuse bids that come from those who have not registered for the auction. There may be more specifics depending on where the auction takes place, so check the rulings and listen carefully to the auctioneer. If you are the successful bidder and the property sells to you, you are required to sign the contract immediately and pay a 10% deposit. There is no cooling off period if you buy at auction.Websites like domain.com.au, realestate.com.au and agent sites like onlyestateagents.com.au will show you what is on the market. Also talking directly to me on 0425 761 116 can be a good insight to what is on the market at the time.
What should I look for in a neighbourhood?
To determine the right neighbourhood for you, consider your pace of life – are you young and is the proximity to friends and entertainment important or are you looking for a quieter suburb. If you have family plans consider schools, transport and amenitites and safety of suburb. Consider where you work and the daily commute.
What is the settlement?
Closing (also referred to as completion or settlement) is the final step in executing a real estate transaction. The closing date is set during the negotiation phase, and is usually several weeks after the offer is formally accepted. On the closing date, the ownership of the property is transferred to the buyer.
Do I need a pest inspection?
You don’t need a pest inspection but it is recommended that you get one to ensure the property you are buying has no major issues as this could save you a lot of money in the future.