Things To Consider Before Buying
There are many things that home buyers don't consider when buying a property. Whether your buying your first home, second or a new investment property, there are important things to consider that often get left to the last thought.
Consider Your Finance Options First
We always advise to make sure you get a pre-approval in place first. This allows you to look for a property and put in an offer with some confidence that a lender considers you to be a good applicant.
A pre-approval is still no guarantee of formal finance, it can ensure that your financial circumstance has been accepted by a lender – At Local Mortgage Specialists, we always make sure you have a full form pre-approval so the lender can assess all you financial data and give you a pre-approval that you can be more confident in.
Check For Any Improvements
If you spot any obvious home improvements that where clearly not part of the original construction of the home, make sure you get confirmation the improvements were approved – in writing.
It's key to make this confirmation a conditional of sale. Things such as carports & garages, patios & pergolas, decks, fences and even swimming pools require a council permit.
If an additional to the property has not been council approved then you would be liable for any charges that may arise from the local council after sale.
Get A Building Inspection
Using a professional building inspection service can save you thousands. While it is an upfront cost, a professional building inspector can identify any significant problems with a property that may require attention or repair.
A satisfactory building inspection should always be part of the sale conditions.
Make The Offer – Always Conditional
Any offer you make, should ALWAYS be subject to finance. Even if you have a pre-approval in place, that doesn't constitute formal finance. The lender still has to accept the property as security, do valuations and complete final assessments.
This also ensures you're protected, including whatever deposit you put down.
Disclosing Your Finance Amount
Most real estate agents will want you to list your lender and the amount of finance you'll be obtaining on your offer to purchase the property.
This information can be used by the agent and the seller to determine the strength of your offer. For example, if there are several offers for the seller to consider for the same price, they may likely favour the offer than has a smaller finance amount as that could indicate they have a larger deposit and therefore are a stronger finance applicant.
There is no requirement to list how much you are borrowing – so keep this in mind.
Be Aware Of Close Date Sales
A recent sales technique that agents use is the closed date sale. It can be called a few other things but the premise is the same.
The property is listed, usually for only a handful of viewings, and the selling agent requests all offers formally in writing by a certain cut off date.
It's kind of like a silent auction.
This gives the agent and the seller a list of formal written offers. As they are formal they know they are definite buyers and can then play each offer off against the other to further increase the final sales price.
Be aware of this tactic as it often is applied when it's a “buyers market” and the agent and seller are trying to achieve a sale price that would be higher than what the market would usually determine.
Ask About The Settlement Date
This is something people often over look. You should always ask the question, “How soon can the seller settle”.
While there are industry standards of between 14 and 30 days after finance approval, you want to make sure the seller doesn't have any other complications going on that may delay that.
Both parties, yourself and the seller, must agree to the settlement date by signing the contract, but often if a seller has other complications, such as the settlement dependent on the sale or settlement of another property.
If this isn't disclosed upfront, you may find the agent/seller advising this after you've put your offer in. If you're trying to purchase a home, having to wait an extra few weeks or a month might make things a little difficult for you. And while you're within your rights to no accept an extended settlement, you may want to know this before you put an offer in.
Get An Independent Settlement Agent
If you haven't arranged a settlement agent prior, it's likely the real estate selling agent will recommend one to you. Be aware of this proposition.
While there should not be any financial arrangements between a real estate agent and a settlement agent, it is still unwise to use a
settlement agent that has an existing relationship with the real estate agent.
It's important to remember the real estate agent acts on the sellers behalf, the seller is their client. The settlement agent acts on your behalf you are their client. You are never the real estate agent's client.
Keep that in mind. You want to make sure the person acting for you is completely arms length and doesn't have any attachment to the seller or the selling agent. This can be very important if things get tricky during the settlement process.
And remember, always make sure you get a finance specialists on your side to do all the hard work for you – give us a call before you start looking for your next dream home.
