The buying process:

Generally, buying a home follows this basic course of events:
1 Apply for preapproval of your home loan
2 Find the home, negotiate the price
3 Sign a copy of the contract in the real estate agent's office or your solicitor's office (preferred) & pay holding deposit . Cooling off period begins - this is called "exchange in the office". Do not sign a "66W" until all of your checks and balances are done and without legal advice and in the presence of your solicitor.
4 Have the home inspected for pest or building issues, have the bank value the home, your solicitor will order "searches" like any environmental issues or proposals which may affect the home, any issues with council etc:
5 When full approval is received and all checks are done & satisfactory - "Exchange" contracts - balance of your deposit is due
6 Sign & return your mortgage documents, organise building and / or contents insurance
7 Generally 6 weeks later it's time to "settle" on your purchase, the home is now yours!

Paying your deposit

When you negotiate the purchase price a holding deposit is generally required to take the property off of the market until you can complete your checks. In NSW this holding deposit is 0.25% of the value of the home, and is generally not refundable.

A deposit of 10 percent of the price of the property is normally required at "Exchange" (when your loan is full approved, all of your checks and searches are done and are satisfactory) to show your intention to purchase a property. Some vendors are prepared to rest on a 5% deposit. Simply ask the real estate agent closer to the time of making an offer as to what deposit amount will be required and make sure you have it available at the time you make an offer.

If you don't have spare cash lying around for a deposit - some people don't - you may be able to use a deposit bond. Deposit bonds are issued by insurance companies and provide a guarantee to the vendor that the deposit will be paid - usually at settlement time. The cost of a deposit bond is approximately one percent of the value of the deposit. For example, you might be planning on buying a house for $300,000. A 10 percent deposit on this property would be $30,000, so the deposit bond would cost about $300. If you need to get a deposit bond, your mortgage broker will organise this for you.

Not all vendors will accept a deposit bond so you will need to check with the real estate agent whether they will accept it.

Inspecting homes

Each property you inspect will be different from the previous one. It may be in another suburb, on another street, double storey, rendered walls, or have off street parking. Trying to remember what each property had to offer and what was good and not so good about it may not be as easy as you think.
That's why it's important to go armed with a simple property inspection checklist that will help you outline what each property has and you can jot down some comments along the way. So over a period of weeks or even months you'll be able to remember what you liked and didn't like about certain properties. After each property inspection, the process of knowing what to look for and getting closer to the "right" home should become easier.

We have a handy checklist for you to take with you to record the features of the homes you inspect - download it here.

It's important that to purchase a home that will suit you now, and for a few years to come, think about the features which are important to you and your family:
• Where do you want to buy?
• What type of property do you want to buy?
• How many bedrooms do you need?
• How much time do you want to spend maintaining the property each week (gardens, lawns, cleaning etc)
• Is it near to schools / shops / public transport / parks and open areas?

Other important considerations might be:
• If buying a unit/townhouse, how many units are there in the complex?
• What is the condition of the kitchen/bathroom?
• Is there room to extend the house?
• Are there any easements running through the property? (it might prevent a swimming pool being built)
• Are the rooms big enough? (e.g. Will your king size bed fit into the bedroom and will there be enough room for a wardrobe?)
• What is the council zoning for the block? (that will impact what can and can't be done to the land and the property)

You also need to look out for signs of damage in the property:
• Are there any cracks in the walls (interior and exterior)? Cracks may indicate shifting foundations and costly work may be required.
• If it is an old house and the carpet is lifting up in places, have a look at the state of the floorboards. You may see signs of mould, white ants, borers or other problems.
• Is there a musty smell? (which may indicate rising damp or water damage)
• Check the walls on the other side of the bathroom for signs of water damage/rotting wood.
This will give you an idea of the condition of the property, however it does not replace getting it professionally inspected by a building and pest inspector.

Mortgage Application process

Your mortgage broker will take you through the mortgage application process, determining the loan and lender to suit you, gathering your documents and completing the paperwork, and applying for the loan on your behalf.
Your mortgage broker is qualified to assist you with this process and they work very hard to find the best solution & make the process simple, better still you don't have a bill from your broker - they work for you but are paid by the lender.

Terms Conditions & approval criteria apply. Stamp Duty exemptions may or may not be available, depending on which state you live in and the relevant State Government exemptions applicable at the time. Please check your state for exemption confirmation.

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