Purchasing a house is an incredible accomplishment and one of the biggest steps you’ll take during your life. Though the process may seem overwhelming, breaking everything down will help you keep your head straight while hunting for the house of your dreams. Here are a few points to consider when purchasing a house in NSW.
Can you afford it?
Prior to applying for finance and obtaining a loan, you need to discern whether purchasing the property is within your means. Buying a property is a long-term commitment and you need to be able to foresee what your financial situation might be like in a few years’ time. Which will help determine whether or not you can afford to make the purchase.
There are a number of protections in place under the National Consumer Credit Protection Act which requires home loan lenders to provide you with information regarding how much money you can afford to borrow.
Have you inspected the property?
It is critical that you personally inspect the property you plan to purchase, to see if it matches the description that was given to you by the vendor. Under Australian law, a vendor must disclose certain information to you when contracting to sell residential property.
The information that the vendor is required to disclose to you is as follows;
- A copy of the Folio Register
- An Environmental Planning and Assessment Certificate
- A diagram of the sewerage system of your property
- Evidence of any restrictions to the use of your property.
For example, if there is a footpath that crosses over your front lawn.
You may also arrange for a pre-purchase property inspection report. This report will outline the condition of the property as well as any defects in the house that may be of concern to you. However, Property inspection reports do not cover the following areas;
- Electrical wiring
- Whether the smoke detectors are functioning properly
- Air conditioning
- Plumbing and the drainage
- Swimming pools
- The carpet
We also recommend that you arrange for a pest inspection report to be prepared for you in case there
are any termites or other pests living within the structure of the house.
Making an offer?
It is important that you speak with a property lawyer before you make an offer to the Vendor of the property. You could give your solicitor a copy of the Sales contract so that they can review it along with any special conditions that may be in the contract, in order to see whether these conditions set out by the selling party are in your best interests.
Once you have notified the Vendor that you are interested in the property, you may be asked to make a holding deposit. This holding deposit equates to 0.25% of the purchase price and is non-refundable if you decide within the cooling-off period, that you no longer want to purchase the property.
Upon the expiration of the cooling off period, the purchaser must pay the remainder of the deposit. Whilst purchasing a home is an exciting experience, the processes associated with it are also quite complicated and at times can be overwhelming. Since you’ll be living there for a long time you need to make sure that the property will fit you perfectly, both financially and structurally.
In saying that it is a good idea to get in contact with a property lawyer as soon as possible to get further advice.