Your guide to buying Essential information, tips and checklists to help you move through each step of the buying process with confidence.
Contents 01 Welcome 02 Need to know before you get started 06 Finding the right property 08 Before making an offer 10 Making an offer 12 Contract exchange & settlement 14 Property settlement 16 About Hockingstuart
Peter Hanscomb CEO of Hockingstuart
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Finding and securing the right home or investment involves a lot more than just responding to a listing with an offer. Buying property is an exciting milestone in anyone’s life; however, it can also be a challenging and daunting process. In this guide, we have harnessed the expertise of our knowledgeable agents to provide the information you need to source and secure your ideal property sooner. We walk you through each essential step of the buying process – preparing briefs and shortlists, as well as negotiating, exchanging and settling purchases – and outline the strategies you need to succeed with confidence. We’ve also included some essential information around sale types and costs of buying to help make your experience as seamless as possible. We hope you find this guide useful and look forward to speaking with you soon.
Welcome
Need to know before you get started Before you start thinking about what you want in a property, it’s essential to understand a few basics, such as sale types – and costs on top of the sale price. 2
There are four main methods of sale in Australia: auction, private treaty, off-market, and expressions of interest. How you purchase a property can affect aspects ranging from the price tag to settlement. Consider what method of sale works best for you and keep this in mind when shortlisting properties.
Private treaty A private treaty sees a property publicly advertised at a set price for sale. This encourages serious buyers with appropriate finance to inspect the property and submit offers. All offers are presented to the seller, as and when they come in, for review. Private treaties can be advantageous for buyers, saving time, allowing for better negotiation, and providing greater privacy.
Auction Auctions create a competitive environment for qualified buyers, and while they can prove intimidating to some buyers, others may relish the excitement of the auction process.
Off-market Off-market sales invite qualified and highly motivated buyers to inspect a property before it is advertised to the public. This allows the seller to test market response, gain positive and negative feedback, and gauge pricing expectations. Today, more and more buyers and sellers favour off-market sales as they save both parties time and money.
Off-market sales can be advantageous to buyers as offers can be submitted, reviewed, negotiated, and accepted before a property lists on the market, thereby minimising competition.
The EOI method is often used for unique properties that are hard to compare or place in a local market. These properties are advertised with calls for EOI without disclosing the selling price. Once the intention to sell is made public, the market response is tested, allowing the seller to gain positive and negative feedback and gauge pricing expectations. EOI sales can be advantageous to buyers by offering a ‘first in’, off-market advantage.
Expressions of interest (EOI)
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Ways to buy
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Stamp duty Stamp duty (also called transfer duty or conveyance duty) is a charge applied by state governments in Australia in relation to the transfer of land or property.
Council rates Council rates are taxes collected by local governments which are used to fund a range of public or community services. Rates vary depending on the property’s value and local government area, so do your due diligence to understand what the council rates would be on a property so you are aware of the ongoing financial commitment.
Land tax
Land tax is an annual tax that landowners pay to state and territory governments. Your principal place of residence is typically exempt from land tax but other land or properties you own may be liable, so always check what you may be liable for with your local office of state revenue.
Buying a property involves more than just the purchase price and fees for professional services such as pest inspections or solicitors. Here are three costs that all buyers should consider before making an offer on a property in Australia.
Costs of buying
How much you pay is determined by the property’s value and the state where you are buying, but usually represents a substantial sum over and above the purchase price. Check the amount of stamp duty you would be liable for by visiting your local office of state revenue website.
How can we help? Our agents can advise on sale types, explain the costs of buying a property in your state and work with you to understand your local market. 5
the right property
any property buying
is to set some clear parameters – without which you are more likely to overspend or get lost in choice. Then, once you have found appealing properties that meet your search criteria, you can start carrying out due diligence on your top contenders. 6
Finding
The first step in journey
Compare the market
Identifying the true value of a property requires some homework, but understanding the market could save you a lot of money. Speak to your local agency for an in-depth suburb report and analysis of recent sales in the area, and attend open houses to compare and contrast property features and asking prices. How can we help?
Here are four considerations to help you write a property search brief.
Establish your preferred location
Note your areas for compromise State what elements are must-haves and what are nice-to-haves. Renovations are a significant consideration when searching for a property. If you’re not willing to do renovations, you may need to be willing to make compromises elsewhere. While knowing your requirements is incredibly important, it’s also essential to keep an open mind – what you want on paper simply may not be realistic.
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Create a clear map of ‘preferred’ and ‘potential’ suburbs. Take into consideration general factors such as affordability, transportation, access to schools, local facilities, amenities, and demographics. Along with more personal needs such as proximity to family or your workplace. Write down your requirements
Know your budget Know your budget or speak to your bank or mortgage broker to understand the maximum amount you can borrow. Then think about what you would ideally like to spend. Don’t forget to factor in other costs associated with buying such as conveyancing fees, building and pest inspections and of course stamp duty. Plus of course any potential costs of repairs or renovations.
Our experienced agents know the market and can provide feedback on your brief such as if you are asking for too much or if you should raise the bar. They can also expand your horizons by suggesting different dwelling types, alternative locations, and off-market sales.
Take the time to understand your wish list Requirements may include the number of bedrooms and bathrooms, land size, type of dwelling, yard size, design elements, Feng Shui, etc. Writing a property search brief
Organise inspections Often seen as a final hurdle, the inspection process is an essential part of the legal checklist for buying property. Building inspections include making sure electrics and plumbing have been installed to specific requirements, renovations have been approved by council, and boundaries are in the correct position.
Check the title Different types of titles exist for different property types, and each come with their own legalities.
When deciding what title is best for you, it’s essential to factor in the relevant pros and cons along with your intentions for the property.
Review the paperwork When a property is prepared for sale, a vendor will have a contract note or contract of sale written up detailing the property’s information –including zoning certificate, drainage diagram, a plan for the land, and a Certificate of Title –as well as the exchange, settlement and land transfer specifications. This information has legal implications and can be very complex to the untrained eye.
Here are five action items to be cognisant of before making an offer on one of your shortlisted porperties.
Before making an offer
Pest inspections are also crucial as serious issues such as termite infestation can cause structural damage. Investing in inspections before settlement can s ave you a lot of money in the long run.
You can engage a conveyancer at any time of the shortlist process to work with you to handle all steps outlined in this checklist.
Engage a conveyancer Once you’ve made your shortlist, it’s crucial to check over the finer details of each shortlisted property with a conveyancing expert. A solicitor or conveyancer will read the fine print of the paperwork and take care of the legalities. The conveyancing process is necessary to raise any red flags and pave a smooth road to settlement.
Australian houses typically have a freehold Torrens Title. Australian units, townhouses, villas, and commercial spaces are usually governed by Strata or Company titles, and each system has applicable by laws, levies and responsibilities.
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Our agents are standing by to provide you with a complimentary property evaluation that you can trust. We know the market and what it takes to secure premium outcomes every time.
Learn the vendor’s motivation to sell
Get your finances in order
Understanding the market could save you a lot of money. Research the history of neighbouring properties to understand local demand. Look at what has been sold and when it was sold, attend other open inspections and auctions, and compare the state of play. Conducting a robust analysis of comparable sales along with thorough local market research gives you the best chance of securing a property for true market value.
It’s beneficial to uncover the vendor’s motivation to sell, as there are often factors in play other than price, e.g., timing and sentiment. Building a positive relationship with the property’s real estate agent can help you learn about the seller’s requirements.
Making an offer
Negotiating can be a daunting prospect for buyers and sellers alike. No matter how stressful or intimidating the process is, it’s important to remember to leave your feelings at the door and apply pressure only if you are confident your terms are acceptable. Emotions and urgency can cost you a sale.
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Be clear about how much you can afford and get pre-approval from your bank or mortgage broker. If you know your ceiling, you will know your limit. And remember, price isn’t everything in a sale; often vendors are looking for a quick settlement with a buyer who has their finances in order.
Do your local research
Be prepared to compromise Negotiation is all about give and take, and the price isn’t the only thing on the table. Other areas for negotiation include the length of settlement, deposit, existing tenancy, and fixtures or inclusions. Everything and anything can be up for discussion. State what elements are must-haves and what are nice-to-haves. Leave your emotions at the door
Making an offer to buy a property is serious business, so it’s important to be as prepared as possible. Here are five tips to help you negotiate like a professional and seal the deal.
How can we help? Our experienced and knowledgeable agents can guide you through these steps and stand in for you during the negotiation. They understand the ins and outs of the industry and are quipped with efficient strategies to help secure your desired outcome.
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Once a final sale price is agreed, the buyer and seller then sign and exchange copies of the contract for sale. After this comes the settlement period, which concludes when the buyer pays the total sale price and receives the deed and property keys. Here are six action items to check off in the lead up to the contract exchange.
Contract exchange & settlement
Have you taken note of the cooling-off period?
A sale contract will typically outline the settlement date, which is the day the sale is finalised and ownership transferred to the buyer. This usually takes place six weeks after contracts are exchanged, although varying periods can be negotiated depending on seller and buyer requirements.
There is typically a cooling-off period in place for buyers. The timeframe varies from state to state in Australia, with extended cooling-off periods generally applied to properties sold off the plan.
The cooling off period starts as soon as the contracts are exchanged. The buyer may forgo their deposit if they use their cooling-off rights and withdraw from the agreement.
Have you reviewed the contract?
Exchanging contracts is the legal part of selling and buying. There will be two copies of the sale contract: one for the seller and one for the buyer. Each party must sign one copy before they are swapped and kept for record. At auction, exchange happens immediately after the winning bid is accepted. For private treaty sales, each party signs separately then exchanges documents by hand or post. The exchange is usually arranged by a solicitor, conveyancer or agent and must happen within two business days. The buyer and seller are legally bound once the contracts are exchanged.
Are the contracts ready to be exchanged?
Do you have the deposit ready?
This step should be done before making an offer; however, as the document has legal implications, it’s essential to do a final review before signing on the dotted line. Check over the finer details and make any necessary amendments for your conveyancer to raise with the other party. Once all revisions are accepted and finalised, it’s time for the exchange.
Take out building insurance Once contracts are exchanged, the point at which a buyer becomes responsible for the property (and any damage to it) varies according to the state the property is located in. In some states a buyer may not be responsible for a property until settlement occurs, while in others it may be as soon as contracts are exchanged. It is vital to understand when you are legally responsible for the property and any damage to it, and to arrange for building insurance from that point onwards.
At the time of the exchange, the buyer must be prepared to pay a deposit. Deposits are usually calculated between 0.25% to 10% of the purchase price, typically made by cheque, electronic funds transfer, and produced with the contract.
Check the settlement date
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A buyer can waive the cooling-off period by giving the vendor a ‘66W certificate’. It is also possible to reduce or extend the cooling-off period by written agreement from both parties.
Property settlement
Conduct one last inspection
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Take ownership Once payment is received the seller hands over the title deed to the property. Both parties then issue written consent that the settlement process has taken place and the keys are released to the buyer.
The amount owed on the day of settlement includes the agreed sale amount (minus deposit) plus stamp duty and any applicable utility bills or council rates. A buyer must have all their finances in place in order to make the final payment on settlement day.
Have all your finances organised
Buyers and sellers typically don’t need to attend settlement in person; instead, solicitors, conveyancers, and bank representatives organise the transfer of ownership, funds and associated paperwork. That being the case, there are some key aspects of settlement buyers need to keep in mind at this point:
On the morning of settlement day, it is wise to conduct a final inspection of the property to ensure it is in the same condition as when contracts were exchanged.
Yourprofessionals.Hockingstuart agent will be at your side each step of the way, as well as being able to connect you with professional services such as conveyancers where necessary.
How can we help?
The best strategy to facilitate a seamless exchange and settlement is to enlist the support of our experienced real estate
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sooner, with Hockingstuart 16
At Hockingstuart, we pride ourselves on being one of the most dynamic real estate brands in the market. We are always moving; continuously challenging the status quo with innovative property marketing, state-of-the-art technology and strategic Wepartnerships.areuniquely positioned to support our clients through unmatched local real estate knowledge and superior customer service, underpinned by an unwavering dedication to honesty, respect, integrity, trust, and innovation. Our customer-led approach to business has made us an industry leader, and cemented the Hockingstuart brand as a trusted name in Australia. Our people drive this success. We have the hardest-working agents in the industry, dedicated to helping clients achieve their property goals whether buying, selling, renting or investing. your goals
Achieve
Achieve your property goals sooner. Contact your local Hockingstuart agency today for advice and support you can trust.
Contact your local Hockingstuart office today for advice and support you can trust. hockingstuart.com