So you've found your property, what's next? We explain how the purchasing process works
It’s a great feeling when you find your perfect property match. But maybe you’re not sure what follows from here. The purchasing process is actually quite straightforward when you know what’s involved.
Step 1. Cooling off period
If you have purchased your first home through private treaty (that is, you’ve made an offer to the owner and it’s been accepted), rather than at auction, you may get a cooling-off period after the contract is exchanged.
During this period you can cancel the contract though there may be a penalty, which can be around 0.25% of the purchase price. The number of days in a cooling off period varies from state to state but your mortgage broker and conveyancer can explain what will apply to your situation.
Buying at auction is very different as there is usually no cooling off period. If you are the highest bidder when the hammer falls, you are generally obliged to go ahead with the purchase.
Step 2. Exchange to
“Exchange” is the first step to buying a home, and it refers to when the buyer and seller each sign a copy of the contract of sale, then swap their copies over so that everyone has a signed contract.
Neither you nor the seller is legally bound to go ahead with the sale until a written,
Once contracts are exchanged, it usually takes six weeks until “settlement”. This is when the sale is finalised and you can move into your new home. Your mortgage broker will be busy at this stage, liaising with your lender to ensure your home loan is ready to go on
Step 3. Purchase price vs bank valuation
As part of the loan approval process, your lender will likely want to value the property. It’s not necessary for you to do anything at this stage. Your lender will organise its own bank valuation to be sure they don’t loan you more than your property’s worth.
The lender may not disclose what the bank valuation came to, and it could be different to the purchase price anyway because lenders tend to take a conservative estimate. The main point is that the bank needs to be comfortable that the loan doesn’t exceed your home’s value.
Step 4. Help
finding a property: using a buyer's agent
If you need help finding a property, using a buyer’s agent can offer a solution.
A buyer’s agent works on your behalf to find a home that meets your needs and then negotiate with the seller to help you secure a good price.
It can sound tempting, and a buyer’s agent may be able to help you save time and money but they do charge for their services – often based on a percentage of the property’s sale price. So it’s an extra cost you need to factor into your buying budget.
The purchase process takes you one step closer to your own home, and rest assured, your Aussie Broker will be by your side keeping you up to date on how things are progressing.
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Take the next step to buying your first home
- Chapter One : Getting started
- Chapter Two : Your dream home
- Chapter Three : Money matters
- Chapter Four : Ways to purchase
- Chapter Five : Understanding interest rates
- Chapter Six : Understanding home loans
- Chapter Seven : Lending sources
- Chapter Eight : Getting your loan
- Chapter Nine : Choosing a home
- Chapter Ten : Steps to settlement