Tips – Buying a Residential Property

It Can Be Deeply Rewarding
The prospect of buying a property can also be a daunting one: loans and contracts, agents and solicitors, as well as the sheer sum of money involved can all terrify people. But the process can also be deeply rewarding, both financially and emotionally.

A Checklist Will Help
If you decide to go ahead and buy a home, it is a good idea to have a checklist of issues to be considered, choices to be made and things to be done. Your salesperson will be able to provide help and information.

Your checklist should include:

• The type of property you are after (house, unit, townhouse etc)
• Size & Space (size of rooms, living areas etc)
• Location (quiet st, Near transport or shops)
• Design (single level, extra bathroom etc)
• Features (Views, Built in wardrobes etc)

How Much Have I Got To Spend?
Payne Pacific can assist you to find the most suitable property for your price range and area. Firstly, you need to decide what kind of price range you can afford, both now and in the future. This will narrow down your options. You will often need to pay a deposit of 10% of the purchase price. This figure may be lower if mortgage insurance is taken out. The biggest cost of buying a home apart from the sale price is Government Stamp Duty. Don't forget to also take into consideration costs such as legal fees, building and pest inspection reports and actually moving.

Do Your Homework, Do Your Homework
Using all available information research the sales in your preferred areas. The Leader 'Domain' Real Estate Liftout, Sydney Morning Herald and the internet are the best sources of information. Attend as many auctions and Open For Inspections as possible, inspect as many properties as you can, to know exactly what your money will buy you. Also establish a relationship with your salesperson, we will then be able to offer additional advice and also advise you of new listings before they reach the media

Well, Can I Buy It Then?
Once you decide to look for property, contact your lending institute for financial approval. Although the final approval may not be given until a property is chosen, many institutes can give preliminary approval. To avoid delays and the possibility of missing out on the property between the time you put a deposit on a property and exchange contracts, it is advisable to be ready financially to proceed as soon as the sale is negotiated.

Sometimes It's About Being First
Once you have chosen a property, ensure your solicitor receives a copy of the Contract For Sale as soon as possible. Make sure your solicitor explains everything in the contract to you, so you know exactly what you are paying for. Never presume that everything you see in the property will be included in the sale. We also recommend you arrange a building and pest inspection if you are buying a house

If It's Hot - Cool Off
If you don't want to miss out on the property, you can exchange Contracts with a Cooling Off Period. This allows the purchaser 5 days to complete any inspections, such as pest and building reports and answer any queries they may have. The purchaser must advise the vendor, or the vendors agent, in writing by 5pm on the fifth day, whether they wish to proceed with the transaction or not. If the purchaser decides not to complete the transaction, they fortfeit 0.25% of the purchase price to the Vendor.

Exchanged - No Change
Upon exchange of contracts you will be required to pay the 10% (unless otherwise negotiated) deposit and to sign your Contract for Sale. The deposit will be held in trust until settlement occurs.

Its All Settled Then
On settlement day, your solicitor will advise you to carry out a pre-settlement inspection prior to settlement taking place. This is to ensure that the property and all inclusions noted in the Contract for sale are in the same condition was then you last inspected the property.

FAQs – Buying Residential Properties

Can I inspect the property prior to settlement?
Yes. The selling agent can arrange this for you. It is important to ensure the property is in the same state as when you inspected it last.

Can someone bid on my behalf at an auction?
Yes. The person bidding on your behalf will need your written authorization. Prior to the commencement of the auction, this authorization must be given to the auctioneer.

Does the highest bidder have the first right to negotiate after a property is passed in at auction?
On most occasions this right may be offered by the auctioneer but it is subject to instructions from the vendor. There is no automatic right at law which gives the highest bidder the right to negotiate with the vendor when the property is passed in at auction.

Does the vendor have the right to make a big for their property at auction?
Yes. The vendor is entitled to make a vendor bid at the auction, however the auctioneer is obliged to announce the number of vendor bids that will be made, prior to the commencement of the auction.

How much deposit do I have to pay?
The Contract for Sale will state the specified amount of the deposit. It is usually 10% of the purchase price. An increasing trend is to use a deposit bond guarantee for the deposit.

Should I have my finance approved prior to exchange at the auction?
Yes. Purchasing a property at auction is binding and unconditional. If the purchaser fails to complete the transaction, the deposit paid on exchange is forfeited to the seller. The seller may then also be entitled to claim other legal rights as a result of the purchasers failure to complete.

Will a holding deposit allow me to secure the property?
No. A holding deposit is merely a show of 'good faith', meaning that you are interested in the property. There has been no legally binding agreement entered into at this stage by either party. An exchange of contracts is the only sure way to secure a property.

Tips – Selling a Residential Property

Daunting? Maybe Not
The whole process of selling property may be very daunting to you, however with the correct advice and dealing with an agent you know you can trust and rely on, will take a lot of the worry away.

Getting It All Together

There are five factors which need to come together in order for a successful sale to occur:

1. Location - The location of your property is fixed
2. Financing - The purchaser must be able to get finance based on the property's correct market value
3. Marketing- We direct and control the marketing for you
4. Presentation - This is your contribution
5. Price - This is set by the market but is dictated by the above four points

Presentation is your contribution to getting your home sold. Once Payne Pacific marketing produces a buyer, your home must do it's job by creating a favourable impression.

Where Presentation Counts
A complete spring clean, a fresh coat of paint on the walls, make sure all the fixtures and fittings are in good working order, and clean. Make sure your bathroom, kitchen and laundry are spotless. Don't forget the lawns and gardens too, keep the lawn mown, pathways swept, gardens weeded etc. Not only should your home be spotless, it must smell clean also. Put a dab of Vanilla on cold light bulbs, burn some aromatherapy oils or put on fresh pot of coffee.

Ultimately
A properly prepared home may not be worth more than market value, but it will be preferred over the competition and will probably sell faster.

Method Of Sale
The two most popular methods of sale are:

1. Private Treaty
   
2. Public Auction

Both methods have their advantages, however we recommend you discuss them with your salesperson to see which method will benefit you most.

 

Selling Checklist

1. Contact Payne Pacific so that we can organize a time to sit down and discuss your needs, the timing of your sale and your marketing campaign.
2. Prepare your home for marketing by spring cleaning etc
3. Contact your solicitor to prepare relevant documentation and have the Contracts for Sale delivered to our office. In NSW the law requires that a contract be available for inspection prior to the property being offered for sale.
4. Copy the lease if your property is currently leased and ensure your solicitor receives a full copy of the document advising the lease expiry date.

FAQs – Selling Residential Properties

Do agents have a set commission based on a scale?
No. The fee charged will vary from agent to agent depending upon the services provided.

Should I buy before I sell my current property?
For anyone both selling and buying another property this can be a hard question and planning is the key. You must establish how you will organise your finances during any overlap period that may occur. It is also important to ensure that your contracts reflect realistic times for any settlements and request any extensions of settlement time frames.

The advantage of selling before you buy, is that you know exactly how much money you have to spend. However buying before you sell gives you the assurance of knowing exactly where your new home will be. It really comes down to planning and personal needs.

Does the agent have to submit all offers to the vendor?
All genuine offers must be submitted to the vendor. The vendor and agent should clarify their definition of a genuine offer.

How do I exchange a contract with a Cooling Off Period?
Both the vendor and the purchase must sign the Contract, allowing the purchaser 5 days to complete any inspections and answer any queries they may have. The purchaser must advise the vendor, or the vendors agent, in writing by 5pm on the fifth day, whether they wish to proceed with the transaction or not. If the purchaser decides not to complete the transaction, they fortfeit 0.25% of the purchase price to the Vendor.

What is a 5 day Cooling Off Period and what is involved?
The cooling off period is the 5 day period after immediately after exchange of contracts that allows the purchaser to carry out inspections, organize finance and answer queries with the security of knowing that no one else can purchase the property during this time. If the purchaser decides not to proceed with the transaction, the vendor receives compensation equivalent to 0.25% of the Purchase price.

How do I exchange a contract without a Cooling Off Period?
Both the vendor and the purchaser must sign an unconditional contract with their solicitor. The purchaser also requires their solicitor to sign a Section 66 Certificate, which certifies that the purchaser understands the consequences of agreeing to the unconditional exchange of contracts. There are major financial losses and costs involved if either party decide they want to change their minds, once the exchange has taken place.

What is a Conditional Exchange?
A Conditional exchange means that the exchange of Contracts is subject to a special condition and should therefore not be fully relied upon. The special condition could be getting finance approval or having a pest or building inspection carried out on the property. Depending upon the condition, one or either of the parties can withdraw from the contract without incurring a penalty.

What is an unconditional exchange?
An unconditional exchange is where contracts are exchanged and it is not subject to any conditions or reservations.

What is gazumping?
Gazumping occurs when a vendor has verbally agreed to sell their property to a purchaser, but then either raises the price or sells the property to another party. Gazumping usually occurs during the period when the purchaser is conducting building inspections or getting finance approved etc, and has not signed the Contract.

Exchanging a contract with a 5 day cooling off period, allows the purchaser some time to carry out these inquiries, without the worry of being gazumped.