Buying Process
Buying property can be a complicated process. This step-by-step guide below has been designed to walk you through the process of buying property.
Register with us either through our online registration or visit our Ginza Salon where you can discuss your property requirements with one of our local property consultants.
Find out more about our seminars.
Buyers should also take into account the potential for interest rates to rise and currency fluctuation and ensure that they have a buffer which will allow them to continue to make repayments should that occur.
Learn more about FIRB’s foreign investment policy.
When it comes to buying a home, location is always a pivotal issue but it can mean different things to different people. Purchasing a property for investment can be quite different from purchasing a property to match your lifestyle. Here are some key factors to future capital growth when purchasing a property: location, transport, demographics, rent-ability, potential, affordability.
1. Location – safety, schools, shopping centres, medical services sporting facilities, parks, cafes and restaurants. These are all desirable aspects of suburban living and favourable attributes to potential buyers.
2. Transport - How do people get to work in that area? How far is it to bus stations or train stations?
3. Demographics - Look at the potential demand of the property by matching the household demographics to the property.
4. Rent-ability - Review the logical layout of the home. Does it have adequate sized bedrooms? Are there usable living spaces inside and outside, as well as storage space?
5. Potential - Is there an ability to increase the value of the property through future development in the neighborhood?
6. Price – Is the price within your affordability reach? How does the price compared to the median price in the area? What are the recent sale prices of surrounding properties?
Let API assist you with your property search and help you to make the right decision of your investment.
Learn more about API’s services.
Your notes will make it easier to compare properties and may include details such as the date and address, the price range, features of the property, have a copy of the floor plan, and note down you liked about the property and what you didn’t. A buyer should ask for a copy of the contract before they commence looking.
It is recommended that buyers clarify the status of a feature or item whether it is included in the sale of a property.
Fixtures are defined as “anything on the property that is ‘screwed in’, ‘glued in’, ‘nailed in’, and ‘bolted in’ or ‘plumbed in’ to the structures on the property.
Freestanding movable items are called chattels – they can be included with the sale of the property but must be noted on the contract.
If you are located overseas and cannot physically inspect the property. API assists you to source and negotiate your ideal property to ensure that the property you are buying represents a good opportunity.
Learn more about API’s services.
Before you sign the contract prior to the cooling off period, ensure that the contract of sale must include the clause “subject to FIRB approval”, otherwise you will be breaching the law.
If your Contract of Sale is subject to a building and pest inspection, ensure you carry these out within the specified timeframe. The building inspection report should cover issues such as the soundness of structures; the legality of existing structures on the property; existence of termites, etc.
It is very important that the contract you are signing has the clause “subject to FIRB approval” and 30 days must be allowed for a FIRB decision. At this point it is vital to check with your conveyancer or solicitor that the clause is stated in such a way so as to ensure that if your FIRB proposal is rejected that you will not lose your deposit.
Once you have exchanged contract, forward a copy of the signed contract to FIRB for formal approval.
During this period time, your lender will probably arrange for a valuation of the property and require you to take out building insurance effective from the exchange (unless you are buying a strata property). Your bank would have sent out the loan documents to you after formal approval. You can get help from your conveyancer or solicitor, you have the right to obtain legal advice about your loan contract. To accept the loan offer, sign the appropriate sections and return the loan documents back to the bank.
Do a final inspection on your property before settlement. This can be completed by you or your appointed agent.
Settlement of your loan usually coincides with settlement of the property - it’s when the lender transfers the money you’ve borrowed as per your instructions to the seller.
Once the Contract of Sale is unconditional – this is once all the conditions such as finance and building and pest have been met and the deposit has been paid - keep in touch with your solicitor with regards to any issues approaching the settlement date.
Your solicitor will usually attend settlement on your behalf. Once settlement has been completed, the title for the property is held by your lender and the keys to your new home can be released to you.
Register with us either through our online registration or visit our Ginza Salon where you can discuss your property requirements with one of our local property consultants.
1. Find out how much you can borrow
It’s important to know that you are eligible for a loan and how much you can borrow before starting looking for a property to avoid disappointment. We recommend that you get your mortgage pre-approved before you begin looking for a property. Good properties don’t stay on the market long. The buyer with a pre-approved loan has the advantage over other competing buyers who need to put their loan applications together. API organizes property investment seminars throughout the year to provide an excellent opportunity for you to learn more about the process and available loan products to choose.Find out more about our seminars.
Buyers should also take into account the potential for interest rates to rise and currency fluctuation and ensure that they have a buffer which will allow them to continue to make repayments should that occur.
2. Australian Government pre-approval
If you are a non-resident or a temporary visa holder, you are legally required to get permission from the Foreign Investment Review Board (FIRB) if you want to buy properties in Australia. Australian Citizens, Australian Permanent Residency holders and New Zealand (NZ) Citizens are exempt from obtaining FIRB approval. Getting FIRB approval is a simple process and usually takes around a month from the date the application is lodged.Learn more about FIRB’s foreign investment policy.
3. Decide on where to buy and do your research
Now is the time to begin your search for a property. API provides services to assist your research to find your ideal property.When it comes to buying a home, location is always a pivotal issue but it can mean different things to different people. Purchasing a property for investment can be quite different from purchasing a property to match your lifestyle. Here are some key factors to future capital growth when purchasing a property: location, transport, demographics, rent-ability, potential, affordability.
1. Location – safety, schools, shopping centres, medical services sporting facilities, parks, cafes and restaurants. These are all desirable aspects of suburban living and favourable attributes to potential buyers.
2. Transport - How do people get to work in that area? How far is it to bus stations or train stations?
3. Demographics - Look at the potential demand of the property by matching the household demographics to the property.
4. Rent-ability - Review the logical layout of the home. Does it have adequate sized bedrooms? Are there usable living spaces inside and outside, as well as storage space?
5. Potential - Is there an ability to increase the value of the property through future development in the neighborhood?
6. Price – Is the price within your affordability reach? How does the price compared to the median price in the area? What are the recent sale prices of surrounding properties?
Let API assist you with your property search and help you to make the right decision of your investment.
Learn more about API’s services.
4. Attend Inspections
When inspecting a property a buyer should:- Conduct a thorough inspection of the property
- Make notes
- Read and understand the contract of sale
- Organise a building and pest inspection, once a contract has been signed.
Your notes will make it easier to compare properties and may include details such as the date and address, the price range, features of the property, have a copy of the floor plan, and note down you liked about the property and what you didn’t. A buyer should ask for a copy of the contract before they commence looking.
It is recommended that buyers clarify the status of a feature or item whether it is included in the sale of a property.
Fixtures are defined as “anything on the property that is ‘screwed in’, ‘glued in’, ‘nailed in’, and ‘bolted in’ or ‘plumbed in’ to the structures on the property.
Freestanding movable items are called chattels – they can be included with the sale of the property but must be noted on the contract.
If you are located overseas and cannot physically inspect the property. API assists you to source and negotiate your ideal property to ensure that the property you are buying represents a good opportunity.
Learn more about API’s services.
5. Offer to the purchase
Ask a contract before signing and get your solicitor or conveyancer to look at the contract and add any additional conditions if necessary. Each state of Australia has their own property laws, use your conveyancer or solicitor’s expertise to help guide you. If the vendor allows a cooling off period, in this case you can put a holding deposit and sign the contract. Refer to your conveyancer or solicitor, they will let you know what checks you have to do before buying and will let you know when it is safe to sign the contract to buy the property. If you are unable to get a loan during the cooling off period, the penalty is the holding deposit which is usually up to $1000, and again please checks with your conveyancer or solicitor as this can vary across the different states.Before you sign the contract prior to the cooling off period, ensure that the contract of sale must include the clause “subject to FIRB approval”, otherwise you will be breaching the law.
6. Loan formal approval
When you’ve found a property to buy, you can then forward the contract of sale to the bank to proceed with formal approval. Remember don’t commit yourself to buy a property until your mortgage is approved. If there’s a cooling off period, in which case it is okay to sign the contract, otherwise do not sign the contract until you know that the bank issues a formal approval notice. This process might take a week or longer.7. Exchange contracts / pay your deposit
You can exchange your contract after your loan has been formally approved and your solicitor or conveyancer gives you the go ahead. Normally you will need to put down a 10% deposit. The amount of the deposit is negotiable and differs between the states. Note that once you have exchanged contacts it is very difficult if not impossible to back out so please seek legal advice before signing any contracts or paying your deposit.If your Contract of Sale is subject to a building and pest inspection, ensure you carry these out within the specified timeframe. The building inspection report should cover issues such as the soundness of structures; the legality of existing structures on the property; existence of termites, etc.
It is very important that the contract you are signing has the clause “subject to FIRB approval” and 30 days must be allowed for a FIRB decision. At this point it is vital to check with your conveyancer or solicitor that the clause is stated in such a way so as to ensure that if your FIRB proposal is rejected that you will not lose your deposit.
8. Arrangements between exchange and settlement
The time between exchange and Settlement is usually six weeks although this can change if both you and the seller agree to extend or reduce it.Once you have exchanged contract, forward a copy of the signed contract to FIRB for formal approval.
During this period time, your lender will probably arrange for a valuation of the property and require you to take out building insurance effective from the exchange (unless you are buying a strata property). Your bank would have sent out the loan documents to you after formal approval. You can get help from your conveyancer or solicitor, you have the right to obtain legal advice about your loan contract. To accept the loan offer, sign the appropriate sections and return the loan documents back to the bank.
Do a final inspection on your property before settlement. This can be completed by you or your appointed agent.
9. Conveyancing Process
During the conveyancing process your solicitor will make the following checks on the property:- Applications and permits
- Details of development approval permits previously approved
- Notices, orders, requisitions or certificates issued in previous years
- Land liable to flooding
- Ownership and real property details
- Sewerage mains, maintenance holes and property connection locations
- Sewerage and septic tank installation/plan details
- Water main locations
- Existence of easements on the property
- Body corporate records if buying a unit or townhouse
10. Settlement
Settlement of the property is when the balance of the purchase price is paid, and the keys and title deeds are handed over. If you have a mortgage, your lender will receive the transfer document and title deed. You also need to pay stamp duty at settlement.Settlement of your loan usually coincides with settlement of the property - it’s when the lender transfers the money you’ve borrowed as per your instructions to the seller.
Once the Contract of Sale is unconditional – this is once all the conditions such as finance and building and pest have been met and the deposit has been paid - keep in touch with your solicitor with regards to any issues approaching the settlement date.
Your solicitor will usually attend settlement on your behalf. Once settlement has been completed, the title for the property is held by your lender and the keys to your new home can be released to you.
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