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Steps to buying a house in Australia
| Posted on June 17, 2018 at 7:53 PM |
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1. Are you ready? The saying goes, “look before you leap”, and it
couldn’t be more true than when considering purchasing a property. Before you
leap into finding your dream home, take a breath and ask yourself the big
question - “am I ready? If you’re still experiencing itchy feet and wanderlust
then possibly you’re not quite ready for the commitment at this time in your
life. But if you think you’re all in, assess whether you
have job security needed to make it work. High job security (12 months plus)
will give lenders more confidence in you and will give you a better chance of
getting your foot in the door. If you have already have children then the urge to
own your own home will probably be high. Unfortunately, the banks are fully
aware of the costs involved in raising children, and for each dependent you
have the amount you can borrow tends to decline substantially (in some cases by
up to $50,000 per child). 2. Evaluate your finances and budget You’re probably wondering how much you can borrow
from the bank. Good question! The answer is determined by a multitude of
factors. A mortgage is a massive financial responsibility and to get a good
idea of where you stand it’s best to have an honest conversation with your
accountant to figure out what you can afford. Knowing this will help when you
start searching for a property. Apply for a copy of your credit file and make sure
you clear away debts. If you have bad credit, it might not be the best time for
you to purchase a home or investment property. If you have multiple credit
cards and loans to pay off, minimise these as much as possible. Reducing your
limit on your cards will help you secure a larger finance amount. If you’re
struggling to meet credit payments, reach out to your provider to help you
renegotiate the terms of your payment schedule. 3. The cost of buying a house It pays to seek advice from a financial advisor,
accountant or lender to truly get the scope of the full costs associated with
buying a home. Here is a list of costs you will likely incur:
Other costs to consider are ongoing mortgage
repayments, utilities, moving costs, council rates and strata fees, home and
contents insurance and mortgage protection insurance. Not to mention repairs
and maintenance to your home. It’s wise to have $5,000-$10,000 in a savings
account for emergency repairs. Extra costs when buying an investment property It’s essential that you cover maintenance,
insurance, property management, council and water rates, land tax and body
corporate fees (if applicable) on top of your interest payments, if you are
borrowing. Lenders are tighter than they used to be and they expect a full 20%
deposit. 4. Investigating mortgages and interest rates Bonus points if you have your deposit ready, but
you still need to shop around to find the right financing for you. Be careful
to make sure you understand all the terms of the agreement. Find out about the:
If you don’t have a deposit saved, full finance of
the purchase price may be an option by using your renting history as proof of
savings or by having a parent go guarantor, but without equity there are more
risks associated and you will be required to have full insurance. There are two options with interest rates - fixed
and variable. Your financial advisor can help your decide which will suit you
best, there are benefits to both. A fixed rate mortgage would be suited to
someone budget-minded. A variable home loan has a bit more risk, but gains are
made when interest rates fall helping you to possibly pay off your loan
quicker. 5. Getting home loan pre-approval Otherwise known as conditional approval or approval
in principle, securing pre-approval before even searching for your home is
ideal so you can know your price range. By providing your bank or lender with
your financial details - such as your credit report, savings, income and
investments - they will be able to review the information and grant you with
pre-approval to borrow up to a certain amount. Now you’re ready to go shopping! 6. Choosing the suburb and type of property When riding the emotional rollercoaster of buying a
home, it’s important to have a clear sense of what you are looking for. The
list of priorities will vary for investors, singles and those looking to
purchase a family home. Consider making a checklist of all your non-negotiable,
“must have” requirements. Here is a list for wannabe homeowners to work from:
To find out where you can afford to buy, you can
research property prices, and there is plenty of existing property market data
to help you quickly find the median price of an area you are interested in. Figuring out what type of property is right for
you:
Buying an investment property When buying an investment property there are going
to be a few different factors to consider than when buying a home. Establish
whether you are going to fix it up and flip it or if you want to hold onto the
property and rent it out. A different set of criteria for choosing the type
of property to invest in is necessary. For strong capital growth you need to
find a property that will increase in value. This can take a while, but look
for:
7. Do I need a real estate agent or buyer’s agent? Reach out to local real estate agents for
information about what’s for sale, tips for buying a house in the area, what
the area is like and how the property market is performing, along with any
other general queries. Appointing a buyer’s agent is handy if you are looking
to buy at auction, but they can also work to find suitable properties for you,
negotiate with the seller, and complete background checks on the property -
eliminating some of the stress in a stressful time! 8. Property inspections As soon as you enter the home you are considering
buying, you will get an immediate emotional response - negative or positive.
While it’s easy to walk away when you get a negative vibe off a property, it’s
much harder to do when the feeling is positive. A positive emotional response
is very guiding, but don’t get too invested before making important structural
checks, investigating the utilities and sussing out the new neighborhood! Things to watch for:
If you are sure you want to go ahead with
purchasing the property, get a qualified building inspector to make an
assessment. They will look for structural defects, pest infestations, faulty
wiring, plumbing and drain issues, asbestos, lead paint, and more. 9. Preparing for Purchase A licensed conveyancer can request inspections for
you while also managing the exchange of contracts and other legal searches.
Once you have found the property you want to purchase, get a property valuation
to help you figure out the right price to offer. Finally, you are ready to make an offer! Don’t
low-ball here less than 10% of the asking price, otherwise you may miss out
when higher offers stream in. When you’ve decided on a figure, reach out to the
agent and let them know how much you’re willing to pay and your deposit amount. Next, simply exchange contracts and pay the
deposit. Both you and the seller are not legally bound to the sale until the
contract of sale has been signed and swapped. Included in the contract of sale
is the:
If you’ve bought through private treaty you will
have a cooling off period. This is not available when sale is made by auction.
During this period you can cancel the sale if you change your mind, but you may
be required to pay a penalty. The cooling off period varies by state. In the time between exchange and settlement -
generally six weeks - you should be busy arranging the balance of the selling
price by finalising the finance and signing the mortgage. You will also want to
insure your property, and you will be required to take out building insurance. Once the balance of the purchase price and Stamp
Duty is paid, the settlement of the property has been made and you will receive
your keys and title deeds. Essentially, the lender will transfer your money to the
seller and the property is ready for you to occupy! 10. Moving into your new home You are almost ready to move into your home! Now
you will need to sort out utility accounts, pack your belongings, and employ
the help of a removalist and possibly a cleaner! Don’t forget to transfer the
address on all your accounts and organise for mail redirection. |
First Home Buyers Incentive from NSW Government
| Posted on June 2, 2017 at 12:47 AM |
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The NSW government has announced a new package designed to even the playing field for first time buyers and bring housing costs under control. The new measures, effective July 1, include stamp duty exemption for first time buyers purchasing new or existing properties under $650,000. Buyers of homes under $800,000 will also get stamp duty discounts. Those purchasing homes with small deposits will no longer have to pay 9 per cent stamp duty charges on lenders’ mortgage insurance. Other measures are aimed at further restricting investor purchases. Investors will no longer be able to defer stamp duty payments on off-the-plan purchases for 12 months. The same concession will become available for off-the-plan buyers who intend to live in the properties they are purchasing. The stamp duty surcharge on foreign investors, meanwhile, will increase from 4 per cent to 8 percent. NSW Premier Gladys Berejiklian also announced eligibility criteria for the existing $10,000 First Homeowners Grant would be restricted to those building new homes valued up to $750,000 or those purchasing new homes valued up to $600,000. |
Interest Rate Update
| Posted on December 2, 2015 at 9:52 PM |
comments (362)
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The Reserve Bank has left
the cash rate on hold today at it's record low of 2.0% as was predicted by most
economists. RP Data released in November revealed that after three years of solid price growth, home values in Sydney are now falling. With a 1 per cent drop over the past three months, houses were hardest hit – falling 1.4 per cent, while units bucked the trend increasing 0.6 per cent. This overall decline is in line with auction clearance rates also dropping in November. We are unsure what to expect at the next meeting, and given it is in February we expect a lot of discussion about its likely outcome between now and then. On that note, I would like to take this opportunity to wish you a wonderful holiday season and look forward to staying in touch in the new year. |
Is selling your property at Christmas a good idea?
| Posted on November 26, 2015 at 9:36 PM |
comments (145)
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It’s only four weeks
until Christmas which means you are about to get very busy. There’s decorations
to hang, shopping to do, eating and drinking with friends to enjoy and holidays
to plan. So if you’re contemplating selling your home at Christmas time, is it
such a good idea? Selling at Christmas has
traditionally been seen as bad timing. Let’s face it, most people choose the
Christmas break to go on holiday and relax. An obvious consequence of
this could be a reduction in the number of potential buyers looking at your
home. Not only that but real estate agents generally use the Christmas and New
Year period to take some time off themselves, so they might advise you against
selling your property over this time to ensure they don’t miss out on a
sale! But times are changing. Buyers now realise that if they
want to secure their ideal home they need to beat the competition. So while many
buyers shelve their property search during the festive season, the truly
motivated ones are constantly searching. As a seller this is great news. Your
pool of buyers are not tyre kickers, they’re keen to secure a property over the
holidays so they can start the New Year afresh and are less likely to waste
your time. So what are the pros and cons
of selling at Christmas? Pros: With less competition during the holidays, the number of houses on the market decreases, reducing competition between sellers and increasing competition between buyers. As buyers bid to secure a home for themselves, they may end up offering far more than originally asked. People who seek properties during the holiday months are serious about purchasing and it is likely that you will make a quick sale so they can settle early in the New Year. Let’s face it, spending week after week searching for properties can be exhausting! Cons: The buyer who is looking over the holidays may be suspicious of your house-selling motivations. They may think you are desperate, or that there must be something wrong with the property as it hasn’t sold yet. They might assume you are in a situation where you need to sell your house quickly to relieve yourself of a financial debt or because you have already bought another home. If they believe that you are impatient to sell, buyers are more likely to make offers lower than the asking price with the result of either diminishing your profits or needlessly dragging out negotiations until you are satisfied.
However,
with a good agent and clever marketing strategy you can actually capitalise on
the time of year to achieve a price higher than expected. Whether you are buying or selling over the holidays one thing is certain, there is a huge psychological benefit to getting the deal done by December 31. House selling and hunting is tough and knowing you can head into the New Year with a new home, or cash in the bank is an enormous motivation. |
Off Plan Purchase
| Posted on November 24, 2015 at 7:33 PM |
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NSW Parliament today approved amendments to the Conveyancing Act 1919, strengthening protections for buyers who purchase properties off the plan. Minister for Innovation and Better Regulation Victor Dominello said the new laws are intended to prevent rogue developers from rescinding contracts using the sunset clause to make windfall profits. “The NSW Government has listened to the community’s concerns and acted swiftly to provide home buyers with greater certainty,” he said. “Any developers who are thinking of acting unethically should know that their behaviour will no longer be tolerated.” Effective from 2 November 2015, developers must gain the consent of a purchaser before rescinding a contract using a sunset clause. If consent is not given then the developer must apply to the Supreme Court to justify the proposed termination. Some NSW consumers have reportedly had their contracts rescinded by a developer using the sunset clause, only for the land or apartment to be re-sold the same day for a higher price 639 people responded to the three week public consultation which closed on 14 October. Industry groups were also consulted. The amendments passed with bipartisan support. More information about the new law is at www.lpi.nsw.gov.au. |
Interest Rate News
| Posted on November 3, 2015 at 10:06 PM |
comments (133)
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The Reserve Bank has once again left interest rates on hold at the historic low of 2 per cent. However commentary in the meeting, suggested a rate cut could be on the cards in the near future. Auction clearance rates in Sydney and Melbourne hit their lowest points this year and capital city property prices flat-lined over October. This drop off, coupled with some banks raising their interest rate, is casting shadow over consumer spending leading into Christmas. It will certainly be an interesting couple of months to end 2015, and likely to be a very different playing field to what the year kicked off with, |
Historic Cut to Interest Rate
| Posted on February 4, 2015 at 12:30 AM |
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THE Reserve Bank has cut official interest rates to a new low in a decision that paves the way for the cheapest home loans in more than 40 years, a weaker Australian dollar and further increases in house prices. Returning from a two-month summer break, the RBA board ended a mounting frenzy of speculation over whether interest rates should, or would, be cut, choosing to end a period of interest rate stability that had seen official rates at 2.5 per cent for the 17 months, since August 2013. Economists still expect the bank to cut rates at least one more time this year. “We hope lenders will pass on the full rate cuts and more to their variable rate home loan customers because there’s no excuse not to pass on the full cuts. Lenders have kept 0.45 percentage points on average of cash rate cuts from variable rate home loan customers since the cash rate began to fall in November 2011,” said Michelle Hutchison, an analyst at Finder.com.au Few were expecting an interest-rate cut only a week ago, citing the RBA’s December statement that “a period of stability in interest rates” was the most likely course. But an article by veteran Herald Sun finance commentator Terry McCrann last Thursday — who has accurately predicted more than half of the RBA’s interest rate moves since the GFC — moved expectations dramatically in the direction of a rate cut. |
Holiday Break
| Posted on December 17, 2014 at 8:13 PM |
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Principal Acknowledgement It has been very busy year 2014, as a Principal of Affordable Plus Conveyancing i would like to thank all our clients for their trust and faith in our Conveyancing services and we promise more affordability on its way in 2015. ** Our office will close from Friday 19 December 2014 and re-open on Monday 12 January 2015. Wish all happy and safe Holiday Season **.  |
If you are interested in legal arguments this case law for you
| Posted on December 17, 2014 at 7:14 PM |
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Rehayem Investments v Harfish [2014] NSWSC 1485 REAL PROPERTY - sale of land - whether contract for sale of land validly terminated - whether notice of termination effective - where notice to complete authorised by special condition of contract - where first defendant failed to complete contract in accordance with notice to complete |
