NAVIGATING THE HOME BUYING PROCESS.

Auction

The popularity of auctions comes and goes.  You need to do all your background work before you decide to bid at an auction.  An auction can be an intimidating way to buy a property as things can move pretty quickly.  You could attend an auction to see what they are all about, so that when it’s your turn it’s not such a new experience.

Here’s a checklist of things to have done before you go to auction.

1. Get your finance fully approved  – we can help you with this.
2. Register your interest with the estate agent.
3. Complete a builders report (if required) – we can advise you around this.
4. Methamphetamine tests may be required – we can discuss this further with you.
5. Complete a valuation – we can let you know if this is required.
6. Have your 10% deposit ready to go – we can discuss options with you.
7. Go through the LIM report – we can help you do this.
8. Have the title checked by your solicitor.
9. Make any changes to the settlement date or deposit (this must be done prior to the auction).  Remember that a seller is trying to sell their property for the highest price, and will usually be a little flexible in order to get the best price.  If you don’t ask, you don’t get!

Tender

This is where you must submit a confidential written offer for a property.  You are competing against other buyers, and it can be tricky figuring out how much to offer.  Conditions can be attached. However, they may make your offer less appealing to the seller.  Make sure you get your lawyer to check your tender documents.  The seller will weigh up all offers and conditions and decide whether to accept any of the offers.  More negotiation may be required.

By Negotiation

A property may have a price attached to it.  You can make a written offer, which you must have checked by your solicitor, and you may enter into negotiation with the seller.  The Real Estate Agent acts as the go between, so that you are not dealing directly with the seller.  There is definitely skill involved in negotiating the price.  We can discuss strategies to help you in these negotiations.  These negotiations can go back and forth until ideally you reach a price you are both happy with.

Different property types and what to be aware of.

The type of property you buy can effect the amount of money you can borrow.

Freehold or Fee Simple

This is the most common property type and means you own the land and the buildings on the property with few restrictions.

Cross lease

This is where there is more than one property on a title.  This often means you need to get permission from the other owners on the title to conduct certain activities such as building new structures and alterations to existing improvements.   Some cross leases can be complex, so it’s important to run documentation past your solicitor.

Unit/Strata Title/Stratum Estate

This property type usually includes apartments, units and townhouses.  A body corporate fee will usually cover the cost of maintaining common property areas.  You should check the body corporate minutes for more details of the property you are buying.

Leasehold

This is where someone else owns the land that your property is on.  An annual lease fee is paid.  You never own the land, and the lease fees can increase significantly over the period of the lease.  It’s important to really understand what you are getting into before purchasing a leasehold property.

When it comes to home loans, one size does not fit all.

Like many things in life, mortgages are a complicated beast, and what works for one person does not work for the next.

The good news is, we’ve got all the skills and resources to arrange the best loan structure for your personal situation and ambitions – whether you’re buying your first home, your next home, a new home or investment property……or if you’re simply looking to refinance.

Here’s a taste of what’s out there:

Fixed rate loan

With a fixed rate loan, the interest rate is set in stone for a period of between six months and five years, so you’ll know exactly how much each repayment will be.  Fixed Rate Loans work well if you’re on a fixed income, and have similar expenses month to month. Did you know you can split your loan into smaller amounts with different rates to protect against rate fluctuations?  You should also be aware that if you need to pay off your loan before its expiry, you’ll be charged an early repayment fee.  The amount of this fee has a number of variables, which we can discuss with you.

Floating/variable rate loan

The interest rate for floating/variable rate loans can be changed by the bank or lender at any time. But, this type of loan gives you greater flexibility to make changes without penalty.  If interest rates drop, your loan repayments drop, or you can reduce the length of your loan.  Floating rates can become higher than fixed rates, but if rates are increasing, you can convert your loan to a fixed rate loan.

Revolving credit/line of credit

This type of loan works like a large overdraft, giving you the most flexibility in your repayments. Interest is charged daily at a floating/variable rate, so by keeping the loan balance as low as possible, you can end up paying less interest over all.  This is great if you’re very disciplined with your spending.  If you’re not so disciplined, you can end up paying a lot more in the long run!  Revolving credit/line of credit works best for people who are self-employed, property investors, or those who are good savers.

Interest only loans

With an interest only loan, you pay only the interest owing each month, but nothing off the principle.  This type of loan has a shorter term, usually from, say, one to five years.  Interest only loans work well if you’re trying to keep repayments as low as possible, such as when you’re building or renovating.

Talk to us, so we can help find the right loan structure for you.