By Adrian Sacco
1. Have your finances in order early
If you need finance to fund your purchase, meet with your chosen lender or mortgage broker early on in your search in order to get loan pre-approval (sometimes called approval in principle) and ascertain how much money you can borrow. This way you will be ready to act as soon as you see something you’re keen to buy, with your lender quickly able to give you final loan approval for your purchase if you meet all of the necessary criteria.
2. Engage a conveyancer or lawyer
To undertake the conveyancing work for your purchase you will need to engage a solicitor or a registered conveyancer. Solicitors are often recommended when contracts are not straightforward and are likely to require complicated legal work. However, as experienced conveyancers specialise in conveyancing work they are ideal in most circumstances. In fact, many law firms employ registered conveyancers to undertake their conveyancing work.
3. Check the title of your chosen property
Freestanding houses generally have a freehold title, in Australia also known as Torrens Title, however other titles exist for different property types and come with their own legalities. Many apartments, townhouses are Strata Titled, which is a system for handling the legal ownership of a portion of a building and will incur quarterly strata fees. Less frequently you will come across a Company Titled apartment, a system which effectively means you purchase shares in a building rather than a designated space. Restricted Company Title means that you may not be able to lease out the property. In New Zealand another form of title is the Cross Lease.
4. Carry out the necessary inspections.
The building inspection and particularly in Australia, the pest inspection process, is an important part of the legal checklist for buying property. This inspection involves ensuring the electrics and plumbing have been installed to meet requirements, that any renovations have been approved by council, that the boundaries are in the correct position and that any pest issues are identified.
5. Have your deposit ready.
When buying at auction you will need to pay a 10% deposit on the day to secure your purchase. This can be done in the form of a personal or bank cheque or a deposit bond, which is effectively a guarantee for the bond which your lender may be able to arrange for you. If you are buying a property via private treaty, you will usually need to pay the deposit upon exchange of contracts. Make sure you have the deposit organised several days in advance if possible to avoid any complications.