Purchasing a home is likely the most significant financial decision you will ever make. Whether this is your first purchase or you're an experienced buyer, you must be careful in your decision-making.
There are numerous reasons for someone to purchase a new home. Whether you are putting roots down, buying your first property, improving your portfolio, looking to live closer to your child's school, or want to live somewhere new, we aim to make the home buying process as easy and seamless as possible.
Buying a home is a big step, and there can be a lot to consider. Here, we will run through the typical buying process you will go through with your agent when purchasing your new dream house.
The first step before buying a home is to ensure you have a deposit saved for your purchase. Most lenders will require you to have a deposit for your home loan. However, lenders typically have various loan products to borrow up to 100% of the property value if you qualify.
Approach lenders to get finance pre-approval to understand what price range you can receive for your new home purchase.
Explore some of your favorite neighborhoods that possibly suit your needs and, more importantly, your budget. You can do this online, where numerous property comparison sites will indicate the average sale price of houses, land, and units in that area. We also recommend visiting your chosen neighborhood at different times of the day. Does it still excite you early in the morning? Do you feel safe late at night? Can you see yourself living there comfortably?
If the answer is yes, and there are homes you are interested in, give their open houses a visit. Seeing them in person will provide you with a new perspective of the property while also allowing you to do a thorough inspection of the home.
The best way to make a formal offer and avoid confusion is to make the offer in writing. In most situations, we will provide you with a contract to start the process, highlighting any sale contingencies. Once we have written it up, we will then present your offer to the sellers.
If your offer is accepted and all parties have signed the contract, you will have to pay the required deposit.
Typically, the seller will nominate an attorney moving forward.
Financial fees vary greatly, depending on such matters as what percentage of the property value that you will be borrowing, the amount of the loan, the amount of the purchase, and which bank is lending you the funds. By speaking to your local Harcourts agent, you can quickly ascertain approximate costs for your particular circumstances.
Possible expenses you may incur:
Once escrow has closed, your bond attorneys will conclude the following
On settlement, your bond attorneys and conveyancing attorneys will conclude the following:
The attorney will lodge the transaction in the deeds office. This transaction will be registered within ten days, after which financial lenders will distribute monies accordingly.
Possession of the property usually occurs when escrow closes, although the seller and buyer can agree on a different date.
One of our team members will contact you to arrange a pre-escrow inspection. This walk-through 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 postpone the closing until your attorney can address your concerns.
Although this intel may seem like a lot to take in, you must trust that your Harcourts agent will be there with you every step of the way, making sure you are happy with your purchase.
When you are purchasing a home, you want to ensure that you inspect every aspect of it, eliminating any surprises that might occur later on down the road. Though it can sometimes seem overwhelming, we are here to help.
Here is a list of points to focus on while visiting a property:
These are just a few considerations to look into when examining a property. If, after inspecting the home and doing your due diligence, you decide the house is the right one for you, we highly recommend enlisting the help of independent property inspectors to lend a professional eye over the property.
Harcourts has already changed the auction game globally and continues to do so here in the United States. First and foremost, it is essential to understand the numerous advantages of purchasing your home through the auction platform.
Once you have identified an auction property that you’re interested in, it’s important to have your finances organised by the auction date. This is also a good time to get all of your other affairs sorted, such as finalising the sale of your existing property, organising a property check and familiarising yourself with all the auction documents.
If you’ve never attended an auction before it’s a good idea to have a look at a few before attending the auction of the property you intend to purchase. This will help you to become more familiar with the auction process.
Inspect the property as many times as necessary and, if you have any doubts, arrange for a builder, plumber, electrician or any other tradesperson to accompany you.
Also, check the auction documents. Make sure you’re familiar with and understand all the details and conditions of sale (the deposit, possession date, balance of payment, list of chattels, etc). You don’t want any unexpected surprises come auction day.
If you plan to buy at auction, it’s important to have your finances sorted out well before auction day to avoid disappointment. Buying a home through auction is a little different to buying a home through other methods of sale in that sales by auction are unconditional.
So it’s vital to have finance confirmed before you bid. Make sure you have a clear budget in mind for the property, and ensure you stick to it. If you are the successful bidder on auction day, the only thing left to do will be to sign the contract of sale.
At auction, you will need to have up to 10% of the purchase price ready to go at the fall of the hammer.
Once you have your finances in place, you’ve worked out your borrowing capacity, and sought pre-approval on your home loan, it’s now time to get to know the market.
If you have identified the property you intend to bid on, have a look at recent sales in the neighbourhood. 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.
Take advantage of an open home and use the time to perform a thorough property inspection. Later on, you’ll want to engage the services of a professional to inspect the building’s structure and for pests, again, this must be done before auction day.
Auction day will be your last opportunity to ask questions before the bidding begins. You should also have an opportunity to give the home one final inspection.
Most auctions are held subject to a reserve price
– the price below which a property may not be sold. When this level has been reached, the auctioneer will then announce that the property is for sale.
Be aware that any bid you make over the reserve price could be the one that buys the property.
Passed in is the term used when a property fails to reach the reserve price and negotiations between the highest bidder and the vendor do not result in a sale.
After being passed in, the property will now be open to the market, and everyone will have equal opportunity to submit their offer.
If you’re successful on the day you’ll be asked to sign the sales agreement and pay a deposit. This is normally 10% of the purchase price. You should be aware that there is no cooling off period on the purchase of a property at auction, as there is through other methods of sale. This is why it is important to do your due diligence on the property before auction day.
Buying your first home is exciting, a significant step in life, and there is quite a lot to consider. Thankfully, your Harcourts agent will help you understand every step in the purchasing process, which will allow you to make the best decisions for yourself and your family.
To accompany you through this thrilling adventure, we have put together a shortlist of items to keep in mind when purchasing your first property.
An excellent place to begin is drawing up a budget of what you can realistically afford, factoring in any additional expenses to homeownership (see below under Additional Expenses). Once you determine your budget, the next step is to talk to a mortgage broker about the best home loan on the market for you and the possibility of receiving home loan pre-approval. Pre-approval makes the lending process much easier when it comes time to apply for a home loan formally.
Our consultants can help you secure financing and share a wide range of home loan products and interest rates to help choose the best option suitable for you. Brokers work independently from lenders, so they're able to show you a broad range of home lending options and help you to find the lowest interest rate. Brokers also come at no extra cost to you, as their fees are paid for by the lender, so you're able to get independent financial advice at no additional charge.
It's vital to do your due diligence before buying a home. This process entails inspecting the property in person if possible and ensuring the proper building and pest inspections have occurred. Building and pest inspections incur a cost; however, they will confirm no structural damage or severe damage caused by pests, such as termites. Some contracts enable you to guarantee an inspection is carried out before escrow closes while blocking the seller from accepting any other offers during this time.
Knowing your budget and doing your due diligence is essential no matter what the method of sale might be. However, if the home you are interested in is up for auction, you will still need to carry out all building and pest inspections before the auction occurs, even if you are not the successful bidder. This action must happen because sales by auction are not subject to the usual sale contingencies. You can find out more about the auction process in our Guide to Buying at Auction.
Apart from a home deposit and the ongoing cost of mortgage repayments, there are other fees you should be aware of before buying your first home.
Attorney/Escrow Fees (in Canada, conveyancing fees):
It is a good idea to have a property lawyer look over the contract of sale and mortgage documents before signing a sale agreement. A lawyer can also assist with escrow (conveyancing in Canada) which means the transferring of titles. Fees vary.
Building and pest inspections:
As mentioned above, it's worth investing in a one-off building and pest inspection before signing a contract or as part of a contingency, conditions, or subjects of sale to ensure your potential home is structurally sound and pest-free.
Home and contents insurance:
Remember that home insurance is an essential part of the home-buying process. It needs to take effect as soon as you close on your property, not necessarily the date you move in. Ensure you have looked at your options and have chosen the premium that best suits your needs and budget.
Though there is a lot to consider when buying your first home, it should be an exhilarating experience. At Harcourts, we aim to make the buying process as smooth and straightforward for you as possible. This moment is a big step in life. Congratulations on reaching this milestone!
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