Talk to a mortgage broker. Find out how much you can borrow.
Is this what is called arranging provisional finance? I take it that this is the step at which it’s a good idea to get written confirmation from your bank about how much you can borrow, correct?
Sort of. My first thought would be to find out from the Mortgage Broker a ballpark figure of what you can spend. Then you can put in an application to gain the provisional finance, and yes, you’d want to get it in writing!
Make an offer (in person to the real estate agent.
1. First up, the penguin home buyers guide says that after you have found an appropriate house, you should obtain the contract of sale. Is this the document that commonly used to make an offer? If not, what?
Some states yes, some no. Some actually have an ‘offer’ document. I would suggest obtaining Steve’s Buyer Beware templates. It goes into detail the steps required, and also has a template you could use to make your written offers.
2. Many escape clauses have been mentioned elsewhere in this forum. Is whatever document the offer is made with the document on which these are listed? Or is there more than one document on which the relevant clauses are listed?
3. Is there an offer document that a real estate agent will try and get you to sign that should commonly be avoided? I’ve been reading about contract notes, for example, and they seem dead dodgy, as in the website posted below:.
http://www.mericka.com.au/conveyancing/contractnote.shtml
Use the one above.
4. As a general rule, would you say it’s a good idea to run through any offer document I sign to my real estate lawyer first?
Depending on your state. If the offer doc becomes the contract once countersigned by vendors, then get it run by solicitor. If you then have to sign contracts afterwards, make sure your solicitor goes through that first.
5. In Queensland, are RE agents required to submit any offer I may make to the vendor?
In all states.
Agree on a price.
As a general thing, is this usually done by the real estate agent physically taking the offer document to show and discuss with the seller, or is this commonly done over the phone? I’m just curious as to the usual timeframe of the offer process.
Either or. Verbal offers are done often on the phone. Written offers that will be countersigned obviously are done in person. My sales/purchases have all been verbal, as nothing is definite until the solicitors exchange the contracts.
So what happens if you have arranged your pest, building and any other relevant inspections, you successfully organise finance, all is well, and the two weeks expires. Whoever’s living in the house then trashes it, between the end of the two week period and settlement. Or maybe the vendor rips out all of the lights and sprinkler systems for the new house he’s building. So, effectively, you’re not getting what you’re obliged on the contract to pay for. What happens then?
Ask your solicitor. YOu need to make sure that whatever you want to remain in the house is listed as an inclusion in the contract. You would also be wise to take out building/contents insurance after exchange to cover yourself.
So, after signing the contract,…
Probably a silly question, but this IS the same contract as referred to above as “contract of sale”, yes?
Yep
The Penguin Home Buyer’s Guide also mentions getting a survey done. Is this normally required, or is it unusual?
Not always needed – but depends on the property. I have never had one done, but I guess it depends where you are buying.
If it’s all satisfactory, the contract becomes “unconditional” and you can’t get out of it without paying some penalty.
What kind of penalty is usually applied? Are we talking loss of deposit, or other? Generally, how does it work?
Unconditional generally will mean loss of deposit, and possiblity of having to make up any loss the vendor suffers on trying to sell again.
You should also have a conveyancing solicitor. Give their name to the agent at the start and they will take care of all the details (including building and pest insp sometimes).
Does all of the conveyancing take place during the two week period?
No. They take care of settlement, with the bank, the other solicitor etc. at the end as well. I always use a solicitor, and they advise the things I should get done, and do searches to ensure the vendor does own the place etc.
Cheers
Mel
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