Methods of Purchase
The great majority of properties are sold by two popular methods – Private Treaty and Auction.
In a private treaty sale, both with or without a publicised price, you make an offer through an agent to the seller and, if necessary, a negotiation occurs until you and the seller reach an agreement.
At this crucial time, it is important to know that the agent is working for the seller to get the highest price possible.
As a buyer, you will either accept the predetermined price or, more likely, start by making a lower offer. The agent will handle the negotiations which will be aimed at raising the offered amount to the seller’s predetermined price or, possibly, higher if more than one buyer is interested.
A sale at Auction occurs in one of three ways:
a) Before the Auction itself, if the seller accepts an offer
b) On Auction day, at the “fall of the hammer” to the highest bidder
c) After the Auction, if bidding does not reach the seller’s minimum or “reserve” price and the seller accepts an offer during the post Auction Agency period.
In the case of the first two scenarios, the buyer is required to sign the contract on the spot and pay the 10% deposit, which will go into the agent’s Trust Account. The seller’s Contract must be accepted as written and there is no cooling off period (NSW, VIC, SA, QLD). In the third case, some of the terms and conditions of the Contract may be negotiated depending in the buyer’s requirements. These are very important differences to a sale by Private Treaty.
In the first and second instance, the sale has now been made, so it is crutial that you consider the following when buying at Auction:
Be sure you:
a) Register to bid. Most states now require the registration of bidders before a bid can be accepted. This includes a requirement for photo identification at the time of Auction. Check with your Ray White Agent for further details.
b) Are certain that the property and its locality is right for you
c) Have had your loan formally approved and are able to pay the 10% deposit in an agreed manner, by bank or personal cheque or deposit bond (where acceptable).
d) Set your upper price limit and rigidly stick to it. If necessary, get someone else to bid for you. Remember, you are bidding for the property not to win against another bidder. There is always another property.
e) Know exactly what is and is not for sale with the property and whether any immediate renovations are required.
f) Have had any necessary building or pest inspections carried out.
g) Discuss the contract beforehand with your legal adviser and accept the terms and conditions.
What You Need to Know
The type of property you buy should reflect the purpose of the purchase and the lifestyle you are planning for your future. Will you be living in or renting out the property?
If moving in, consider the following:
a) Household numbers and whether they will change
b) The needs of each person in the household now and in several years time
c) The sorts of local amenities required and how close they should be
d) The sorts of work and leisure activities in which you engage
e) The length of time you expect to live in the home
f) The features you want in the home, in order of importance
Think about these questions and discuss them with anyone else who should be involved. Priorities are important because you may need to compromise on some points. Jotting down the answers will produce a checklist of your real future needs, which can become your guide to the sort of property you buy and where you buy it. To assist you with the process, download a copy of our Property Wishlist Checklist.
It is important to realise that Real Estate Agents are engaged by the seller. They work for their clients, the sellers, to get the best price possible for their properties and to sell them as quickly as possible. However, whilst owners are their clients, buyers are their customers and it is the Agent’s business to match them up. This means finding the ideal property in the price range you can afford.
Knowing what you can afford
As a buyer, you need to do some research into what you want and what you can afford. The team at Ray White Financial Services/The Loan Market can help you establish your borrowing capacity. They have access to hundreds of home loan products from most major banks and lenders. In just one FREE home loan consultation, they can tell you exactly how much you can borrow from a range of banks. They can also provide an overview of any fees and charges associated with your loan.
Knowing what’s available
There are thousands of properties being offered on the market so if you’ve worked out what you really want and can afford, you’ve got a head start.
Newspapers are a good place to begin. The Internet is fantastic. Simply go to our property search facility and browse your way through our range of properties that suit your individual criteria.
Visiting our office and looking in our window or asking for our “Open For Inspection List” is also a great way to find out what’s available.
The, start going to some Open Homes and Auctions. Soon you will get a feel for what is available, the number of buyers in the market (demand) and what different properties are worth. Before long you will feel ready to buy.
Get the right advice
The legal aspects of purchasing a home vary across countries and states and it is recommended that you investigate the specific requirements in the area of interest to you. On most occasions a contract of sale and certificates that accompany it must be provided by the seller and set out the details of the property you will buy. The amount of information a seller is required to give you about their property and any relevant matters also varies, so some important information may need to be requested by you. In these circumstances, it is best that you seek professional legal advice.
With the right amount of research and preparation, you’ll be sure to find the property to suit your needs in no time. And, remember, if you need more information on buying there is no better point of contact than Ray White Yamba. Happy house hunting!