Looking for a house can be easier following these steps suggested by the NSW Family and Community Services.
Step 1: Property Search
You can scout for a property using different journals, magazines, newspapers and websites that advertise properties on sale. Some realtors and developers also give away brochures of their projects. You may get in touch with a real estate agent to help you look for your dream house just make sure you tell the agent what you are specifically looking for like your budget, your preferred location and size of the house.
It may also be necessary for you to decide the type of ownership. In most Filipino families, buying a house is for the whole family and it is not usually an issue. Buying a property under either the husband or wife’s name is understood as a property of both parties.
But if you are married to a foreigner or you have a different views about property ownership and inheritance, it is time to decide about this. Shared ownerships may be Joined Tenants or Tenants in Common. For both, two or more people share the property equally but in Joined Tenants, the property is inherited by the survivors of the deceased. On the other hand, the Tenants in Common would allow the property to be inherited by the names of people in the deceased will.
Step 2: Check the Contract of Sale
Ask for the Contract of Sale. Every seller should have this ready together with:
Section 149 certificate from local council that details the zoning and other related information about the house.
Copy of title folio from the Land and Property Information NSW
All documents creating easements or restrictive covenants
Notice directing parties to the Conveyancing Act 1919 and the Conveyancing Regulation 2000
Copies of the folio of the Register for the lot and common property of the strata plan, for strata units.
Buyers are allowed to cancel the contract 14 days after the exchange if the documents are not provided by the seller. Cancellation on the contract is also possible if the seller breaches certain warranties as stated by the Vendor Disclosure and Warranty Regulation.
Once your heart is set on a property, pass a copy of the contract to your solicitor or conveyancer so they can check it for you. As soon as you make an offer, you need to pay a deposit. The deposit is a sign of good faith but it does not hold the property until you sign and exchange contracts. If you do not want to miss out on the property, ask your solicitor or conveyancer to arrange an exchange of contract with a cooling off period, if possible.
Around this time, some buyers may experience “gazumping” this happens in two ways. One is when the buyer believes that the property has been secured and starts to work on getting finances ready only to find out later that another buyer secured the same property.
Another form of gazumping happens when a real estate agent receives more deposits and decides for all intending buyers to outbid each other, auction style. This way, they get to sell the property with the best price, unfortunately, it may not be the best option if for buyers with limited budget.
Step: 3 Apply for a loan
A formal application should be submitted to the lending body before you exchange any contract for the property.
You need to pay fees such as establishment and valuation dues to the lending body.
Loans will not give you the exact amount you need to buy the property, instead it gives you only a secure percentage of the value of the property. The total purchase price and the value of the property may not be the same. Expect a percentage of the valuation amount of the property not the purchase price.
Step 4: Arrange for inspections
Inspections are crucial to make sure that you are buying a house that is structurally sound and pest free. Building inspectors would usually know what other inspections the property may need. This step is important because the money you may need to spend for repairs may make the total cost of your house more expensive than what was set. Building inspectors advertise their services in the yellow pages and other forms of media.
You also need to have a Strata inspection to learn about the management committee, insurances, cost of levies, deeds, and books. This is an optional but recommended service according to the NSW Family and Community Service website.
Step 5: Exchange contract
A contract is a legal agreement between two parties, the seller and the purchaser. The contract needs to be duplicated and signed by both parties. After signing, the two parties will exchange contracts through the solicitor or conveyancer.
You might want to be sure there is a clause about a cooling-off period. Know any clause that discuss about fittings included in the purchase like curtains, air conditioner, light fittings etc.
Step 6: Pay deposits
After exchange of contracts, you need to pay the agreed deposit stated in the contract. The deposit should be paid to the real estate agent’s trust account. It is not wise to give the deposit straight to the seller.
If after the cooling-off period you decide to withdraw, 0.25% will be forfeited from your initial deposit.
You also need to pay for the stamp duty. A stamp duty is an amount calculated on the price of the property. This fee should be settled within the three months after signing the contract. You may be exempt from paying this tax if you are eligible for the First Home Plus Scheme for more details, call the Office of the State Revenue at 1300 130 624.
Step 7: After Exchange of Contract
Settlement time takes four to eight weeks after the exchange of contract. During this period, enquiries, searches and document preparations are being done by your solicitor or conveyancer.
At this stage:
Preparation of the Transfer Document
Submission of the Transfer Document to the Office of State Revenue for stamping (together with original Contract of Sale)
Stamped Transfer document sent back to seller for signature
Return of the Transfer Document to buyer.
Obtain a Survey Report (if none is attached)
Enquiries on electricity, water and local government authorities
Preparation of mortgage document by the lender
Sending requisitions on the title to the seller
Sending request for settlement statement completion
Make sure you read, understand and agree on all the details in each document before signing anything specially the mortgage document.
Step 8 Insurance
As soon as everything is settled and the property becomes yours, set up an insurance for the house.
For home unit owners, ask for the Certificate of Currency from the insurer of the owner’s corporation to check if the property is properly insured. You will be obligated by the home loan provider to provide details and proof of the insurance before settlement.
Step 9 Final check
It is never wrong to be extra sure that the property is clear from any interests, restrictions or any problem that may have been recorded from the date of exchange to settlement time. Check with the Land and Property Information NSW for any record.
Also have a final inspection to check if everything is in the same condition as you knew during the last time you inspected it.
Step 10 Settlement day
Settlement day is between you, the seller and the lender. It is the day when the transaction for the purchase of the property is completed. This usually happens in the seller’s lending body and both you, your representative, the seller and their representative should attend together with representatives from both lending bodies.
On this day:
Loan money will be handed in by lender
Payment of the remaining balance.
Collection of the deposit from the real estate agent by a solicitor or conveyancer authorized representative.
Receipt of a signed transfer and title deed
Arrangement with the Land and Property Information NSW by the lender. The title documents and mortgage will be held by the lending body until payment is completed.
Payment of duty as stated in contract
Payment of council rates, water rates and insurance.
Handing of the keys to the property.
Now that you know the 10 steps involve in purchasing a house in NSW, you can now be better equipped at finding the right home that suits your budget, your taste and your lifestyle.
Check out “The Basics of Owning a House” (insert link) if you need a primer about getting a house in Australia.
Your dream house may just be around the corner or in another suburb, search through different advertisements and use your network to find the best deals. Good luck!
Special thanks to CoachBunch for the main image.