The order of getting a property

penguin

Talk to a mortgage broker. Find out how much you can borrow. Find a property in your price range. Inspect it yourself. Make an offer (in person to the real estate agent). Agree on a price. Look at the sale contract with a solicitor or an experienced investor that you trust. Make sure there is a condition on the contract about finance. It is usually 2 weeks to arrange finance and if you can’t, you can get out of the contract without a penalty. The same goes for building and pest inspections. The contract also states the date of “settlement” that’s when you become the owner.

So, after signing the contract, call your mortgage broker with the details and he/she will look after you from there regarding finance. Call a professional builder who has insurance to do a building inspection and give you a written report. Same for pest inspection. These things should all be finalised by the “inspection date” that you agreed to on the contract. If it’s all satisfactory, the contract becomes “unconditional” and you can’t get out of it without paying some penalty. 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).

Another sourse of free info are legal secretaries. Go into a conv. solicitors office and talk to the person at the front desk.

You will have a solicitor, a lender and a RE agent all working to make sure everything goes ahead according to plan.

Judi

No Penguin, that’s about what I would do.

You definitely need to see a broker first, to establish what range you can buy in. There’s no point looking at $300K houses when you can only afford to buy a $200K place.

Cheers
Mel

Hi Penguin,

My recommend is;

1. Learn as much as you can about investing but set yourself a timeline to do something.
2. While learning start to clarify your goals and preferred style of investing.
3. Ask lots of questions to further clarify what you want to do and how.
4. Determine borrowing potential and buying capacity. (You may not be comfortable spending all you can borrow)
5. Identify areas you can afford to invest in then go and do it!
6. Put your offer in subject to the regular clauses.
7. When your offer is accepted get the solicitor and broker onto the job and at the same time get those inspections organised.
8. Ensure all finance documents (pay slips etc) are current and give these to your broker.
9. Closer to settlement carry out your pre-settlement inspection to ensure property is as offered.
10.Select property manager – who does not have to be with the selling agent.
11. Notify property manager of impending settlement date so they can start looking for a tenant.
12. Ensure solicitor and broker are on target to meet deadlines.
13. Collect keys and give to PM upon settlement.
14. Celebrate the occasion.
15. Set up and maintain record keeping books.
16. File all documents for possible CGT liability later.
17. Start looking again.

Note some of these actions are a little interchangeable and will also on occasions happen very close together.

Derek
[email protected]

I think you can add the line “and or sign” at the end of your name so in the future you can transfer the title of property into a trust or some other entity (if say you initially bought the property in your own name).

Just one quick comment.

I’ve never needed or used a solicitor. Just hire a settlement agency – its their bread and butter and they know what to do. Solicitors cost too much and they probably get a junior to do it anyway.

Hi Judi.

I found your earlier post to PenguinJr to be very helpful and informative. I have some further questions, however.

Originally posted by judi:
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?

Find a property in your price range. Inspect it yourself.

Yup.

Make an offer (in person to the real estate agent.

Right. I have a few questions about this bit.

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?

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

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?

5. In Queensland, are RE agents required to submit any offer I may make to the vendor?

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.

Look at the sale contract with a solicitor or an experienced investor that you trust. Make sure there is a condition on the contract about finance. It is usually 2 weeks to arrange finance and if you can’t, you can get out of the contract without a penalty. The same goes for building and pest inspections. The contract also states the date of “settlement” that’s when you become the owner.

Right. So these escape clauses (subject to building inspection satisfactory to the purchaser etc) go on the actual contract, then, and they’re only valid for two weeks. They are not valid up until the date of settlement. Is this correct?

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?

So, after signing the contract,…

Probably a silly question, but this IS the same contract as referred to above as “contract of sale”, yes?

…call your mortgage broker with the details and he/she will look after you from there regarding finance. Call a professional builder who has insurance to do a building inspection and give you a written report. Same for pest inspection. These things should all be finalised by the “inspection date” that you agreed to on the contract.

The Penguin Home Buyer’s Guide also mentions getting a survey done. Is this normally required, or is it unusual?

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?

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?

Another sourse of free info are legal secretaries. Go into a conv. solicitors office and talk to the person at the front desk.

Great source! Thanks!

You will have a solicitor, a lender and a RE agent all working to make sure everything goes ahead according to plan.

Judi

Thank you.

Originalsin.

Not dead yet.

Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.

Thank you for your help.

I gather that the bank will want to inspect the property at some stage, to get a rough value of it and thereby ensure that it’s not lending you money on a lemon. Does this normally also happen within the two week period after exchange of contracts?

Not dead yet.

Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.

In your loan app you need to put the contact details of the agent. The bank valuer will contact them and go out and have a look. You don’t necessarily get told when they are doing it.

Cheers
Mel