Are you ready to make an offer on your dream home? Unsure about what comes next in the home buying process?
As a first home buyer, we know you probably have questions. Take a look at some of the things you can expect when buying a first home: from making an offer, to paying your deposit, getting house insurance, and what happens on settlement day.
Making an offer
If you’re ready to move ahead on a home you’d like to buy, you’ll need to make an offer by completing a sale and purchase agreement. Before signing a sale and purchase agreement, these are some of the things you’ll need to decide on:
- The price you’re offering.
- The deposit amount – this is usually 10 per cent of the purchase price, payable on the contract becoming unconditional.
- The settlement date.
- Confirmation that the property will be vacant when the transaction settles.
- A list of chattels and furniture to be included in the purchase.
- And the conditions that need to be satisfied before you finally commit to purchasing the property. Conditions like a written offer of finance from your lender, your solicitor approving the title, a building inspector confirming the condition of the property, and a LIM report.
Once the seller accepts your offer and signs the sale and purchase agreement, it becomes a binding contract. So that you’re in the best possible position to move ahead with your finance, your Mortgage Adviser at Max Mortgages will work with you to complete your home loan application by compiling all of the documents your lender will require to finalise your loan.
What’s more, our team can guide you in determining the optimal loan structure with repayments to suit your lifestyle and budget.
Once all conditions in the agreement are satisfied, your lawyer will notify the seller’s lawyer and the agreement becomes unconditional. That means you’re now committed to buying the property and you’ll be required to pay the deposit.
Loan and mortgage instructions are passed onto your lawyer by the lender and the loan amount is deposited into your lawyer’s trust account for payment to the seller on the settlement date. Any funds you’re contributing directly also need to be paid into your lawyer’s trust account, ensuring the funds are cleared in good time before settlement date.
As part of your home loan approval, your lender will require you to have insurance cover for the value of your loan amount. You must have house insurance in place before settlement date so that the property is insured from the day you take possession.
Max Insurances can help you find the right insurance cover for your new home and contents. You can go to Max Insurances’ website to find more information about the types of insurance cover that Max Insurances can assist you with.
Before the settlement date, you’ll also have a chance to have one last look at your new home before you move in. This is your opportunity to check that property and chattels are in the same condition as they were in when you signed the sale and purchase agreement. We recommend the pre-settlement inspection takes place at least 48 hours before settlement date.
These are some of the things to look out for in the pre-settlement inspection:
- Check the condition of any chattels and make sure all those listed are still in the property.
- Check the property is in the same condition as when you signed the agreement and check for any damage. Any maintenance required by the seller as part of the agreement, should have been completed.
- Check the fixtures – lights and plugs – are all working, and that any curtains listed in the agreement are still in the property.
- Check all belongings and rubbish have been removed.
- Make sure all keys, remotes and alarm codes are accounted for.
Any damage or items missing or in need of repair must be brought to your lawyer’s attention so that the seller has time to rectify the issues or compensation can be negotiated ahead of your moving in.
The big day!
Settlement day: your lawyer will work with your lender to ensure all of the paperwork and payments happen on time. Rates for the property are apportioned on the settlement statement and any rates paid in advance by the seller will need to be reimbursed by you. Your lender will pay any remaining funds in accordance with the settlement statement and your new home becomes yours!
Most settlements operate like clockwork, but if things do go wrong, your lawyer is your first point of contact to liaise with the seller and arrange to fix any issues with the property.
Contact Max Mortgages
At Max Mortgages, our Mortgage Advisers are experienced at helping first home buyers get into their first homes, with guidance at every step of the home buying process. That’s why we’re confident we can help you too.
If you’d like to find out more about buying your first home, or you have questions as a first home buyer, get in touch with our team today. You can request a call with one of our Mortgage Advisers and we’ll be in touch to set up a meeting time.