House Hunting 101- The Essential Steps to Finding the Perfect Property
Buying a home is a very significant decision that requires a lot of research and planning. While the process of finding a home for sale can seem complicated, it’s not as difficult as imagined.
We’ve put together this house hunting 101 guide. It contains all the essential steps you need to find the perfect property in Australia. Let’s delve in.
Consider Your Reasons for Buying a Home
What is the reason you’re making a home purchase? Do you consider it an investment strategy? Are you renting and want to take the next step? Or do you have a bigger family and want to move?
Whatever your reason is, it’s best to understand the driving force behind making a home purchase as this will guide you towards picking the right property.
Clarifying your reason for buying a home will also help you clarify your goals and set a realistic budget.
Know Your Must-haves and Your Negotiables
There is a difference between what is vital and essential to have in a property, and what you would like to have.
The essential aspects are the must-haves and the ones you would like to have are the negotiables. Understanding the distinction between both is important when trying to find a home for sale.
The vital aspects and the negotiables may vary with different individuals depending on your current stage of life and situation.
For example, a one-bedroom apartment would not accommodate a growing family of six even though the outside view and scenery are beautiful and the home has a flower garden that the family members love.
Also, a five-bedroom apartment would make no sense for a single person who isn’t looking to get married yet.
Your must-haves may include the location, proximity to work and school, the layout of the home, property size, and local amenities.
Your negotiables may, however, include things like renovation potential, design, and scenery.
Get a Home Loan Pre-approval
It’s ideal to get a home loan pre-approval from a lender before you start the active house-hunting process.
A home loan pre-approval is loan approval which is conditioned on the property you will end up purchasing and lasts about 3-6 months.
It shows that you’re eligible for a loan that is up to a certain amount, although you’re under no obligation to apply for the loan.
Pre-approval gives you budgeting and pricing confidence during the process of buying a home. It is also a signal to agents that you’re serious about purchasing a home.
Find a Home for Sale
Now is the time to actively start house hunting.
You’ll need to conduct your research, look for properties through online listings or other sources, arrange property inspection, and handle all negotiations and paperwork.
This process requires a good understanding of the property market and the legal aspects of property transactions. It can also be time-consuming.
It’s best to have an agent do the research, leg work, and homework for you.
A good house agent will also help you find properties that fit your criteria, guide you through the buying process, arrange inspections, and carry out proper negotiations on your behalf.
They will come up with a list of potentially suitable properties and create a plan of action for inspection.
Carry Out Home Inspection
After you have found a suitable home for sale that you love, it’s time for the inspection process. You or your agent may have a list of suitable properties in the area that you want to buy. If that’s the case, you need to inspect all of them.
Don’t just look at the staging, view, or scenery of the house. Inspect the plumbing, structure, and wiring of the property. Ensure you check for any signs of pest infection and property damage.
It’s often ideal to engage the services of a professional building inspector to help you assess the property thoroughly.
Negotiate the Price of Purchase
Once you have found a property that you’re interested in buying after inspecting it, the process of buying the home begins.
First, you need to request a contract of sale from the real estate agent. This contract will include information about the sale’s terms and conditions, other special conditions, exclusions and inclusions, and a copy of the property title.
You should ask your agent or conveyancer to have a thorough look at the contract of sale to ensure that all taxes and rates are up to date.
Preferably, your agent should negotiate the purchase price with the seller’s agent because agents are experienced negotiators. But the financial capability and preparation to secure the property is on you.
When it comes to negotiating for a property, don’t expect the seller to accept your first offer. The negotiation process involves a bit of back and forth until both parties agree.
You should get your conveyancer involved if you want to negotiate any changes to the contract as part of your negotiation.
Propose an Offer
Upon negotiation and agreement on a purchase price with the seller’s agent, you’ll need to show your commitment to buying the property by making an official offer.
Your offer should be in writing, including any conditions you agreed to during the negotiation process.
Generally, making an offer gives you a “cooling off period”. This is your last chance to pull away from buying the property without incurring any major financial or legal consequences.
This means that you can cancel the contract while the cooling-off period is on, but based on your state regulations, you may lose a portion of your deposit.
The cooling-off period can last between two and five business days depending on the state, but some states have no cooling-off period at all.
The Settlement Process
Upon acceptance of the offer, your agent and conveyancer will guide you through signing a sales contract.
There’ll be two copies of the contract, with each party signing one before the exchange, either in person or electronically.
A pre-settlement inspection, or final inspection will allow you to ensure the property’s condition and listed items match the contract.
You must also consider additional expenses like legal fees, insurance, inspections, stamp duty, and buyer’s agent commission.
Once the settlement process is successful and the documents are exchanged, congratulations, you’re a homeowner.
