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Buying Process

1- Sorting out your finance

 

How much deposit will you need to buy your home?

 

Most lenders will require you to have a 20% deposit for your home loan. For example, if you wish to purchase a home worth $400,000, you would require an $80,000 deposit. However, most lenders have loan products to borrow up to 95% of the property value.

If you don’t have a 20% deposit and need to borrow more than the 80% threshold you should speak to a mortgage adviser who can talk you through your options. At Harcourts Astute, we’re thrilled to be able to provide you with a complete service, from sorting out your finances, to moving into your brand-new home. If you’re based in Australia, talk to your local Harcourts Astute sales consultant about our partner Profectus.

 

 

 

Profectus Lending

 

At Profectus Lending we have a dedicated team that are passionate about making a positive difference to people's finances by offering our expertise in mortgages & banking and providing straight forward advice & solutions. We are here to help you find the right loan for your circumstances.

 

Profectus Lending

 

 

 

Budget

 

Create a budget to determine what you can realistically afford to spend on mortgage repayments. Your budget should include all your regular outgoing expenses along with estimates for the cost of ownership of a home (insurance, rates, interest on your mortgage, applicable body corporate charges and maintenance for your home). These costs will vary depending on where you live and the type of home you wish to buy.

 

 

 

Mortgage calculator

 

Once you’ve worked out your budget, you can use a home loan repayment calculator to get an idea of what your mortgage repayments would be.

 

Home loan Repayment Calculator

 

If you’re happy that you can afford to pay this amount each month, then you can start looking at financing.

 

Stamp Duty Calculator

 

 

 

Pre-approved finance

 

Approach lenders to get finance pre-approval so that you know what price range you can look at for your new home. Given your income and financial commitments, banks will provide a pre-approved amount (to which terms apply) beyond which they would not lend. This gives you a ceiling for the maximum you can spend on buying your first home.

There are various stages of the process as such: Initial appointment, discussion, pre-lodgment, lodgment, pre-approval. It's a very simple process which normally takes between 5 - 7 business days after submission. Once completed, that pre-approval will last for 90 days with most lenders before an application has to be resubmitted.

 

 

 

Mortgage advisors

 

Mortgage advisors or brokers can help you find the most suitable deal from lenders. Remember, mortgage advisors’ fees are paid for by the lender, not you.

Here at Profectus Lending, our Finance brokers have the knowledge and experience to find the most suitable option to suit your individual needs. Our mortgage brokers are here to act as a bridge between both borrower and lender to facilitate the transaction in a smooth and simple process. They take the stressful burden away of trying to figure out what product/lender is most suitable for the borrower and provide them a suitable outcome in what can be a life changing process.

Buying a home is one of the most important decisions you will make and we’re here to make sure that you know the different ways you can structure your loan and what the different lenders will offer you.

 

Our Team at Profectus Lending

 

 

 

Financing your home

 

Along with your savings, there are other sources of income that can help to supplement your deposit. For instance, if you are a first home buyer and meet certain criteria you may also be able to secure a first homeowners grant. These differ from country to country and state to state, so make sure you look up your entitlements. You may also like to consider entering a shared ownership agreement or enlisting the help of a guarantor through friends or family if you don’t have enough savings or a high enough income on your own.

If you already own a property, depending on its value you may be able to use the equity in your current home to help secure financing for the purchase of your new property. Talk to your mortgage advisor about the options available to you.

 

 

2- Doing your research

 

Once you have your finances in place, you’ve worked out your borrowing capacity, and perhaps sought pre-approval on your home loan, it’s now time to get to know the market.

Start to look at neighborhoods that would suit your needs and your budget. A great place to start is online. There are lots of property comparison sites on the web which will give you an indication of the average sale price of houses, land and units in an area.

 

 

Online Search

 

Also look at how a neighborhood has fared over the last five to 10 years. Have prices steadily increased, stabilized or been in decline? These figures can help you to determine if the property will be a good investment over the long-term.

 

“A great place to start is online.”

 

Once you’ve found a location that fits your needs, and fits in with your average price range, start to look at properties on the market. Compare features, price and land-size. You can engage your local Harcourts sales consultant to help you find the perfect property for you. Consultants know the areas they work in very well and can also give you advice on what the neighborhood is like, if there are new infrastructure projects planned, and how prices have changed over the last few years.

 

 

3- Making an offer

 

Once you’ve found the perfect property for you, it’s time to make an offer. Depending on the type of sale, and even the state or country you live in, the process of making an offer can vary.

 

How to make a formal offer?

 

The best way to make a formal offer and avoid any confusion is to make the offer in writing. A sales consultant will most often provide you with a contract to start the process which will also highlight any conditions of sale. The consultant will then present this offer to the sellers.

 

Common conditions of sale are subject to:

  • Finance
  • A builder’s report
  • Sale of another property
  • Solicitor’s approval of the contract
  • Specialist inspection or approval

 

The offer will be prepared on a standard approved contract and you will be asked to sign the required number of copies. Once this process has been completed the consultant will check whether any other interested parties are putting in an offer. This system ensures the situation remains fair to all parties in a multiple offer situation.

The seller can accept your offer, reject it or counter sign it. Counter signing usually occurs when the seller is not satisfied with the price offered and/or conditions included and subsequently alters them. The contract will be brought back to you for your consideration.

If you accept, you initial the seller’s alteration and the property is under offer to you subject to any conditions that the contract may contain. Alternatively you also have the right to counter sign. The consultant will continue negotiations between you and the seller until you are both in agreement.

 

 

The dangers of offering too low

 

Once they find the property, they wish to purchase many buyers are tempted to “start low” with their offer.

We understand but would not be giving you complete service if we did not warn you of what can happen.

 

  1. The seller could feel insulted and become difficult to negotiate with from then on.
  2. The seller may think you are a bargain hunter “having a go” without serious intention to buy and dismiss your offer altogether.

If you are serious about purchasing the property it is wise to make a genuine offer that reflects your serious intentions and appreciation of the true value of the seller’s home.

 

 

After your offer is accepted

 

If your offer is accepted, and all parties have signed the contract you will be asked to pay a deposit. This usually equates to 10% of the purchase price.

Once paid, this deposit is held in a trust account until the contract is confirmed, i.e. becomes unconditional in all respects. It is then paid to the seller. If the contract does not become unconditional the deposit will be repaid to you.

 

other interested parties are putting in an offer. This system ensures the situation remains fair to all parties in a multiple offer situation.

 

The seller can accept your offer, reject it or counter sign it. Counter signing usually occurs when the seller is not satisfied with the price offered and/or conditions included and subsequently alters them. The contract will be brought back to you for your consideration.

 

If you accept, you initial the seller’s alteration and the property is under offer to you subject to any conditions that the contract may contain. Alternatively, you also have the right to counter sign. The consultant will continue negotiations between you and the seller until you are both in agreement.

 

 

Selecting a solicitor

 

You will need to nominate a solicitor or conveyancer to act on your behalf once your offer has been accepted.

Your Harcourts sales consultant can refer you to our conveyancing business partners for your conveyancing needs, so you can at least take some of the stress out of this important process and rest assured that you are being looked after by a qualified professional.

 

 

Property insurance

 

Once the contract becomes unconditional, you will need to take out insurance on the property. Your Harcourts sales consultant can refer you to a Harcourts Complete team member who can assist with all your insurance needs. This service can save you hours spent researching the many insurance providers on the market today.

 

 

Property purchase costs

 

Financial fees vary greatly, depending on such matters as the percentage of the property value that you will be borrowing, the amount of the loan, the amount of the purchase and which bank you are borrowing funds from. If you speak to your Mortgage representative you can quickly ascertain approximate costs for your particular circumstances.

Possible expenses you may incur are:

  • Bank fees
  • Solicitor’s charges may include legal searches (please consult your solicitor)
  • Stamp duty on purchase
  • Home protection insurance
  • Miscellaneous costs (building inspection, rates, removals, etc

 

 

Completing the purchase

 

Before settlement your solicitor or conveyancer will undertake the necessary searches with respect to the property and your financier will prepare the mortgage documentation.

On settlement your solicitor or conveyancer will exchange with the seller’s solicitor:

  • Monies
  • Transfer documentation
  • Keys to the property

 

Within a few days of settlement your solicitor, conveyancer or financier will register the necessary documentation and mortgage transfer with the Land Titles Registry.

Possession of the property usually takes place on the settlement day although the seller and buyer can agree for these dates to be different.

One of our team members will contact you to arrange a pre-settlement inspection. This is your opportunity to ensure all appliances at the property are in working order and that the property is as you recall from the time you signed the contract. If issues arise at this inspection, you should immediately contact your solicitor or conveyancer to postpone settlement until your concerns are addressed.