Buying a house is a milestone and an investment.
We all want a place to call our own. We dream of that day we move in, the decorations we would put in, the activities we’d do in it with our family and making it as homey as we can.
Purchasing a house in Australia may be a little more difficult to do than buying one in the Philippines. But it does not have to be, all you need is a little more knowledge and guidance.
Financing Your Home
Like in any big investment, you need to determine your budget.
House prices in Sydney and Melbourne are sky high so if you are in a tight budget, houses in these areas may not be for you. It may be best to look around neighbouring suburbs or give regional areas a try, who knows, your dream house might be sitting out there waiting for you.
First, check how much of your savings you can dedicate for the house. Remember, you need a substantial deposit and some more cash in the bank just in case interest rates get higher.
Most property sellers would require a deposit set at 20% of the purchase price plus some more additional costs – make sure to know all about these fees so you are better prepared. The bigger deposit you can pay on the onset, the better for you.
Your savings usually will not be able to cover the whole price of the house. This is why you need to get house loan. A regular savings habit history together with a solid employment record may boost your chances for a home loan application.
Shop around for home loans and ask for key fact sheets to compare which ones would better suit your needs in terms of interests, re-payments and length of loan. Make sure your loan provider is licenced and not fake. You may check if your creditor has the proper training and registration through Australian Securities and Investment Commission (ASIC) Professional Register.
Kinds of Property Available for Purchase
After figuring out your finances, it is time to look for a house. It may help to know about the different types of house that are available in the market. When looking for a home, always consider your future needs like the size of your family or proximity to the workplace or school areas.
Related post: 10 Easy Steps in Buying a House If You’re in NSW
In Australia, you may buy your own land and build a home from scratch or a house and land package (similar to the Philippine’s House and Lot).
You can also explore purchasing an existing house. In Filipino, this is a second hand house, pre-owned or pre-loved house. The previous owner or the seller is not bound to talk about any defect or problem that the house has/had so it is important to inspect the house thoroughly before buying it.
Buying a home unit is also common in Australia, home units are a “cluster of small, single level homes, all on one block of land, which is subdivided.” When considering this type of house, find out if noise from adjoining rooms including those from upstairs can be heard. You might also need rooms and areas in the house like an assigned parking space or garage, and a laundry room. You might also be a balcony kind of person. Do not forget to check if the place provides a good security as well.
Villas or townhouses are also an available option for homebuyers and it might be the best choice for those who are looking to save for a smaller piece of land in a more convenient location.
Other units and townhouses may be bought off as a plan. Buying a property off a plan is like buying a pre-selling house here in the Philippines, meaning, construction is not yet complete. When you decide to buy something that is still being constructed, make sure you know when the projected completion time is and if you can afford to wait that long. Put into writing about the deposit, and what happens when the project is not completed in time or there are problems with the project after construction.
How to Buy Your Dream House
Aside from aesthetic, consider all pros and cons when choosing the type of house to invest in. Once decided you can either buy a house by private treaty or through an auction.
A private treaty may be a real estate agent or the owner of the house. Do not be hurried, pressured or persuaded to sign any contract unless you are absolutely sure that the house is the one you want to put your money in.
It is a common practice in Australia to have a “cooling off” period. This is the first five days after you exchange contracts with the seller. If after the cooling-off period you decided not to continue, you may still back off the contract and receive part of the deposit you paid for.
Houses may also be auctioned in Australia and it can be a fun way to buy a house as long as you do not bid a price that is more than you can afford. Before the bidding, the property is open for inspection and in some instances, you may actually set the highest bid but lower than the original price of the house. When this happens, you can negotiate with the seller to get a price you can both be happy with.
Contracts made during auction do not have a cooling-off period.
Legalities and Paperwork
In both cases, always make sure that the contract clearly include all that is needed to be stated. Several legal steps and documentation are involve in buying a house, if you are unfamiliar with these, it may be the wisest choice to get a solicitor or a licenced conveyancer who can act solely for you and not for the seller as well.
Solicitors can do more for you than conveyancers. These professionals should have an indemnity insurance and fidelity fund.
Solicitors in NSW may can be contacted through the:
Solicitor Referral Service
Law Society of NSW
170 Philip Street, Sydney
9926 0300 or freecall: 1800 422 713
Conveyers, on the other hand, may be found in the Yellow Pages and online. You may contact them through:
Australian Institute of Conveyancers – 02 9633 1355.
There are also Do-it-yourself conveyancer kits available for a price. If you are interested dial 02 9564 6933 to ring the Law Consumers’ Association. You are required to join the association before purchase. If you do not like to join you may get the kit from the Australian Property Law Kits by contacting 1800 252 808.
Know that by doing conveyancing by DIY makes you solely responsible for any mistakes you might make. Although the conveyancer’s routine may look simple, doing it by yourself means you do not have the indemnity and fidelity insurance that professionals are able to provide.
Home Ownership Titles
There are different types of land titles in the country. These are the: Torrens Title, Strata Title, Common Law Title, Community Title and Company Title. Each has its own unique detail, finding the right one for you is crucial to know the type of ownership you have over your house and land, and your obligations.
Torrens Title is the most common and affordable land title. You only need to register your name on the title to become the guaranteed owner.
The Strata Title lets you own a unit. This title makes it possible for a unit owner to possess a part of the airspace and surface of land. A certificate of title to a part or parts of the building gives the owner the right to sell or lease the unit or even put it in mortgage. Strata Title holders are required by law to create an owner’s corporation together with other individual owners. The corporation will then be responsible for administration and funding needs. As an owner, you are also obliged follow rules, to pay taxes and to pay your share of common dues for things like maintenance, lighting, gardening etc. of the whole building/complex.
The Old System Title or Common Law Title, on the other hand, “consists of a series of title documents called ‘a chain of title’” that would eventually (after some time) be converted to a qualified Torrens Title after purchase.
Another title for sub-divisions is the Community Title that allows for common property areas to be incorporated into the sub-division. Similar to Strata title holders, owners needs to create a corporation upon registering a community style-plan. However, the owners will get a Torrens Title (not a Strata Title) for their lot. They will be members of the association and they will be sharing ownership of common facilities.
Last is the Company Title given to the shareholders of a private company. Those with this title do not actually get a land title, instead, they get a company’s share. Rules such as alterations, rights to lease, sell or transfer may be decided by the company through a shareholders’ vote.
Special thanks to Craig Johnston for the main image.