First Home Buying tips
By Sheree Klasen

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If you fall into any of the three above categories, you are not alone. In this Journal, I am going to layout the steps involved in buying your first home and getting a foot into the Hunter Valley property market. This starts with making your first offer, all the way through to the keys being handed over.

Costs involved with purchasing a home:

• Price of the house
• Lender’s Mortgage Insurance (if required by your lender)
• Solicitor or Conveyancer fees
• Pest and Building reports
• Stamp Duty (exemptions apply if you meet Government criteria)

Pre -Approval
Before you start looking for your first home, you should consider applying for ‘pre-approval’ from your home loan provider. Pre-approval gives you an idea of your borrowing power. Pre-approval is also useful for showing vendors that you are serious about the property and streamlines the process of finalising your finance before making an offer.
It is important to keep in mind that a home loan pre-approval is not the same as the actual mortgage and there is still a chance your finance can be rejected at the actual application. Most lenders can issue you a pre-approval last around three months. This gives you time to hunt for properties and get your actual application together.
 
Your Offer is Accepted
Having an offer on a property accepted by the vendor is a wonderful start to your buying journey, however there is a multitude of steps and actions you need to take from here which can be very overwhelming.
Firstly, you will need to decide on which solicitor or conveyancer you will be engaging to assist with your purchase. We will call them your conveyancer throughout this Journal, as this is the role they fulfil in you purchase whether they are a solicitor or licensed conveyancer. If you would like some local recommendations, please do not hesitate to contact me.
 
Sales Advice
The Sales Advice is a non-binding document prepared by the sales agent and sent to both vendors (owners) and purchasers (yourself) conveyancers. This gives a summary of the key terms of the sale and includes:

1. Full name of all purchaser to go onto the contract
2. Agreed sale price
3. Sale date
4. Purchasers conveyancer details

You are required to provide the relevant details for the Sales Advice to the agent upon acceptance of your offer. We recommend doing this in a timely matter to avoid delays. Both conveyancers will look at the contract, discuss the terms and conditions with you and ensure the relevant searches and inspections are carried out.

During this period, your conveyancer will negotiate any changes to the contract and ensure any amendments reflect agreed changes.
Some examples of amendments or changes to a contract are:

• Proposed settlement date or period being extended or brought forward from the original date
• Inclusions to the contract (such as light fittings that may have originally been an exclusion that the vendor then agrees to leave at the property)

You really need to keep in mind that at this step (Sales Advice) the home remains on the market For Sale and other buyers are still able to look through the property and make offers if they wish. If a buyer makes a higher offer than yours, this is called Gazumping. The property is not secured by you until exchange of contract occurs.

Due Diligence Enquiries
After you have negotiated your purchase and a Sales Advice is being arranged by the Agent, you should then contact your conveyancer to commence the due diligence enquiries.
The enquiries you make will depend on the circumstances but, as a minimum, you will need to:

1. Review the contract and check council records with your conveyancer.
2. Obtain a pest and building report.
3. Obtain a strata report if required.,
4. Obtain unconditional finance approval, which usually includes a valuer attending the property. The valuer is arranged by your bank/lender.

Again, if you require recommendations for a local Conveyancer or Pest & Building Inspectors, please give me a call to discuss. There is no limit to the enquiries that you can make.
Sometimes the results of a pest and building report may lead you to order an invasive termite inspection (with the vendor’s approval) or a structural engineer’s report as examples. Your conveyancer should give you some guidance about the reports that you can/should obtain.
 
Payment of Deposit
Prior to any binding agreement being made, you are required to pay a deposit of 10% of the purchase price to your agent Trust Account. Be mindful that this can take up to 3 days to clear, depending on how you transfer the funds.
Once received, the selling agent will notify both conveyancers and send you a receipt. Some vendors will be prepared to accept a 5% deposit, so it pays to ask before you exchange the contracts as the deposit will be listed in the contract.

Exchange of Contracts
Once you are happy with the form of the contract, the necessary checks and inspections have been made and you have unconditional loan approval, you should be ready to exchange contracts.
There will be two copies of the sale contract: one for you and one for the vendor. You will each sign one copy of the contract (you usually do this at your conveyancer’s office). Your contract is then swapped or ‘exchanged’ with the vendors.
The contract will include a settlement date, which is the date that the property becomes yours and you will receive the keys from the agent.
Once exchange occurs, a SOLD sticker is placed on the For Sale sign and the home is no longer marketed by the Agent to other buyers. After the exchange of contracts has occurred, you will need to sign your loan documents with your banker or mortgage broker.

Completion and Settlement
Settlement usually takes about 5-6 weeks from the time contracts are exchanged. It is not unusual for the settlement period to be changed so long as the vendor and purchaser agree, and it is reflected in the contract for sale.
In the final week before settlement, you will need to make sure that any money you are contributing towards settlement is ready and available for you to draw on. Your conveyancer will give you instructions on how to draw that money two or three days before settlement.
On the morning of, or the day before settlement it’s recommended you take a final look at the property with the agent. This inspection is known as a 'pre-settlement inspection'. This is to make sure the owners or their tenants have vacated and that the property is left in the condition it was when you agreed to buy it.

The final settlement typically happens in the afternoon between 12:00pm and 3:00pm. You may not get the keys until later in the day, so if you are planning on taking a day off work to move into the property you should arrange for that day to be the day after the scheduled settlement date.
 
My goal is to help you navigate through the process with as little stress as possible. If at any time during your first home buying experience you have any questions or would like to chat about the process, please don't hesitate to call me for a chat or pop into the office - I'd love to meet you! I am here to help all first home buyers, like myself, reflect on their buying experience positively and be ready to make special memories in their new home. Remember, when it comes to buying your first home, no question is a silly one! 

Shelby xo
 
 
The views expressed in this article are an opinion only and readers should rely on their independent advice in relation to such matters.