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					  Ultimate FiRSt
  home BUyeRS
  GUide
   May 2011, First Edition




   Buying a home can be a daunting task and is one of the biggest
   financial decisions you will ever make.
   Searching for the perfect home in the right area, organising finance
   and negotiating the sale is a lot of hard work but if you do your
   homework and invest the appropriate time you will find the ideal
   home that meets all of your criteria.
   This guide has been designed to help you to navigate the process
   of buying your first home.

   www.realestateVieW.com.au




The following guide is an overview of the buying
process. Each state will vary with rules and
regulations. Your relevant state authority should be
contacted to obtain the most accurate information.
                                                Ultimate FiRSt home BUyeRS GUide:
                                                                            May 2011, First Edition




Ultimate First home Buyers
Guide — Contents

Should I Buy or Rent?   Table 1: Pros & Cons of Buying vs. Renting                               1
                        Understanding the Costs involved When Considering                        1
                        to Rent or Buy?                                                          2
                        Table 2: Calculate the Cost of Renting                                   2
                        Table 3: Calculate the Cost of Buying & Home Ownership (Your Own Home)   3



Finance                 What Can you actually afford? don’t Guess!                                5
                        how much Can you Borrow?                                                  5
                        Understanding the types of loans available on the market                  6
                        Table 4: Types of Loans Available to First Home Buyers                    6
                        Pre-approval                                                              6
                        What is Pre-approval?                                                     9
                        Why do you Need It? The Benefits                                          9
                        Government assistance                                                     9
                        First Home Owner Grant                                                    9
                        Eligibility Checklist                                                    10
                        How to Apply for the FHOG and Additional Grants                          10
                        applying For a home loan                                                 11
                        Choosing the Right Home Lender                                           11
                        What a Lender Can Expect of you                                          12
                        Table 5: Process & Criteria                                              12
                        Your Loan Documents – What to Expect!                                    14
                        Questions you Should Ask your Lender when Taking Out a Mortgage Loan 14



The Property            Understanding the market                                                 16
                        Sources of information/Research                                          16
                        making a list                                                            17
                        Buying an off the Plan home vs. an established home                      17
                        Table 4: Pros & Cons Buying Off the Plan vs. Established Homes           17
                        Buying methods                                                           20
                        Table 5: Various Buying Methods                                          20
                        the Role of a Buyer’s agent                                              25
                        Who are Buyer’s Agents?                                                  25
                        How a Buyer’s Agent Can Help You Purchase Your Home                      25
                        Costs Involved                                                           25
                        Finding a Professional Buyer’s Agent                                     25
                        locating Properties For Sale                                             26
                        inspecting a Property                                                    27
                        Planning Your Schedule                                                   28
                        Open for Inspection Planner                                              29
                        attending an open For inspection                                         29
                        Things to Bring to an Open For Inspection                                29
                        Things to Look Out For at an Open For Inspection                         29
                        Checklist – Open For Inspection Buying Checklist                         33
                        Other Questions & Things to Consider




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                                                  Ultimate FiRSt home BUyeRS GUide:
                                                                          May 2011, First Edition




Ultimate First home Buyers
Guide — Contents


Taking the Next Step          Finding out Reasons For Selling                                 34
                              the Contract of Sale                                            34
                              additional documentation                                        35
                              Professional Building inspections                               38



Things To Consider at         Exchanging Contracts                                            39
                              Before Settlement                                               39
Settlement
                              At Settlement                                                   39
                              After settlement                                                39



Things to Do When Moving In   moving Checklist                                                40




Glossary                      Glossary                                                        45




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                                                         Ultimate FiRSt home BUyeRS GUide:
                                                                                    May 2011, First Edition




Should i Buy or Rent?


When it comes to property, the age-old issue has always been should you rent or
should you buy? There are strong arguments for both and therefore it is important
to consider the facts and your own personal circumstances before making a final
decision. The comparison chart below will assist you to weigh up the pros and cons
to make an informed choice.

Table 1: Pros & Cons of Buying vs. Renting
          Renting                                         Buying
 Pros     > You can live in an area that you may not      > Investing in your own asset.
            be able to afford to buy in.                  > Full flexibility to add your own personal
          > Easier and more cost effective to move          touch to the property.
            between properties.                           > Once your mortgage is paid, your
          > Fewer financial commitments.                    monthly expenses decline significantly.
          > Property maintenance is the                   > Equity is being built as it is an investment
            responsibility of the property owner.           which grows in value over time.
          > In many cases, weekly/monthly                 > The repayments of your loan act as
            payments are cheaper than owning                a compulsory saving plan.
            a home.                                       > You can borrow against equity to further
          > It provides you with flexibility on the         invest or convert it into cash and use it
            term in which you choose to live in a           for other purposes.
            particular property/location.
          > Lower start up costs (bond vs stamp
            duty).

 Cons     > Your money is not being put towards           > You now have a financial commitment
            an asset.                                       to the bank.
          > You don’t have any control over renewal       > Your budget might restrict where you
            of your rental agreement.                       can live.
          > You are paying off someone else’s asset.      > Property maintenance is your
          > Lack of flexibility to change the property      responsibility.
            to suit your individual taste.                > Saving a big deposit. With property
          > Limited by landlord guidelines                  values rising, saving a 10% deposit
            i.e. no pets, visitors, smoking, etc.           can take years.

          > Threat of eviction/or lack of ability         > The purchase process is a costly one
            to renew lease.                                 – with the need to pay a 10% deposit,
                                                            stamp duty, legal fees, loan establishment
          > You do not have control over rent               costs and mortgage insurance.
            increases.
                                                          > Affordability of the loan during major
                                                            life events i.e. pregnancy/job loss.
                                                          > Interest rate fluctuations can impact your
                                                            weekly budget and disposable income.




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                                                         Ultimate FiRSt home BUyeRS GUide:
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Should i Buy or Rent?



Understanding the Costs involved When Considering to Rent or
Buy?
There are various costs involved in the buying and renting processes. These must
be individually calculated and examined in order to determine which option is more
suitable for your personal circumstances.

Table 2: Calculate the Cost of Renting
Use the following table to establish the costs you will incur by opting to rent a property.

 expense                  once off /              amount          Notes
                          ongoing
 Upfront Rental           Once Off Payment        iNSeRt          In most instances you will be
 Payment                                          amoUNt          required to pay a month’s rent in
                                                                  advance; however this payment
                                                                  amount differs from state to state.
                                                                  For more information about the upfront costs
                                                                  you will incur by state refer to “All You Need
                                                                  to Know About a Bond and Upfront Rental
                                                                  Payment”, pg 7 of our Ultimate Rental Guide.

 Bond                     Once Off Payment        iNSeRt          The rate of the bond will slightly vary
                                                  amoUNt          from state to state, but generally is
                                                                  equivalent to 4 weeks’ rent.
                                                                  For more information about the upfront costs
                                                                  you will incur by state refer to “All You Need
                                                                  to Know About a Bond and Upfront Rental
                                                                  Payment”, pg 7 of our Ultimate Rental Guide.

 Rental application       Once Off Payment        iNSeRt          You may be requested to pay a
 Fee (if applicable)                              amoUNt          rental application fee which is used
                                                                  to cover the cost of a credit check
                                                                  or other costs related to processing
                                                                  the application.
 monthly Rental           Monthly Payment         iNSeRt          Cost of rent will vary from property
 Payment                                          amoUNt          to property and depends on the
                                                                  location. Research the cost to rent
                                                                  properties in your preferred area
                                                                  online to calculate costs.
 Utilities                Quarterly Payment       iNSeRt          You will need to pay for electricity,
                                                  amoUNt          gas and in some cases water usage.
 Contents insurance       Annual Payment          iNSeRt          This will cover you for damage or
                                                  amoUNt          loss of personal belongings.
 Connections              Once Off Payment        iNSeRt          This includes cost of the
                                                  amoUNt          connections of all the utilities
                                                                  and services you will need or wish
                                                                  to have, which are not paid by
                                                                  the landlord as part of the rental
                                                                  agreement.

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                                                         Ultimate FiRSt home BUyeRS GUide:
                                                                                          May 2011, First Edition




Should i Buy or Rent?



Table 3: Calculate the Cost of Buying & Home Ownership
(Your Own Home)
Use the following calculator to establish the costs you will incur by opting to buy your first property.

 expense                  once off /              amount          Notes
                          ongoing
 deposit                  Once Off Payment        iNSeRt          The deposit needed to purchase a
                                                  amoUNt          home is 10% of the asking price.
                                                                  However, if you borrow in excess
                                                                  of 80% of the property value, you
                                                                  will be required to pay mortgage
                                                                  insurance.
 loan                     Once Off Payment        iNSeRt          Some financial institutions will
 establishment Fees                               amoUNt          charge an establishment fee to
                                                                  cover the set up costs for your loan.
                                                                  Consult your financial institution to
                                                                  determine establishment fees.

 lenders mortgage         Once Off Payment        iNSeRt          If your deposit is less than 20%
 insurance                                        amoUNt          of the value of the property,
                                                                  the lender will require you to pay
                                                                  mortgage insurance.
                                                                  Consult your financial institution to
                                                                  determine likely costs to insure your loan.

 mortgage                 Once Off Payment        iNSeRt          Your mortgage deed must be
 Registration                                     amoUNt          registered with the government.
                                                                  This process will incur a fee.
                                                                  Consult your financial institution to
                                                                  determine likely costs of your mortgage
                                                                  registration.

 Connections              Once Off Payment        iNSeRt          The cost of the connections of all
                                                  amoUNt          the utilities and services you will
                                                                  need or wish to have.
 Property Valuation       Once Off Payment        iNSeRt          A third party often chosen by the
                                                  amoUNt          Lender needs to determine the value
                                                                  of your land and improvements.
 Stamp duty               Once Off Payment        iNSeRt          Stamp duty costs will differ from
                                                  amoUNt          state to state and will depend on
                                                                  the purchase price of the property.
                                                                  Consult your financial institution to
                                                                  determine likely costs of your stamp duty.

 legal                    Once Off Payment        iNSeRt          Will cost you approximately $600-
                                                  amoUNt          $800. This covers the legal transfer
                                                                  of ownership and will be conducted
                                                                  by a solicitor or conveyancer.




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                                               Ultimate FiRSt home BUyeRS GUide:
                                                                        May 2011, First Edition




Should i Buy or Rent?



 mortgage             Monthly Payment      iNSeRt   Mortgage rate will depend on
 Repayments                                amoUNt   a variety of factors including
                                                    institution, loan type, whether
                                                    payment consists of interest only or
                                                    principal and interest. You also need
                                                    to consider the impact of rate rises.
 Utilities            Monthly Payment      iNSeRt   You will need to regularly pay for
                                           amoUNt   the costs of all your utilities and
                                                    services.
 Council Rates        Quarterly / Yearly   iNSeRt   Payable yearly or quarterly, your
                                           amoUNt   council rates will depend on the
                                                    council in which your property is
                                                    located and the value of your home.
 Body Corporate       Quarterly Payment    iNSeRt   If your property resides on a shared
 Fees                                      amoUNt   block (e.g. is a townhouse, unit
                                                    or flat), it is likely to incur body
                                                    corporate fees. These fees cover
                                                    maintenance of common areas
                                                    and sometimes cover building
                                                    insurance. The fees will largely
                                                    depend on the condition of the
                                                    property, its features and the area.
 insurance            Annual Payment       iNSeRt   If your property resides on its own
 (house & Contents)                        amoUNt   block, it will not be subject to body
                                                    corporate fees – however you will be
                                                    responsible for building insurance
                                                    as well as content insurance.
 yearly mortgage      Annual Payment       iNSeRt   Your loan may be subject to a
 account Fees                              amoUNt   yearly loan account fee. It is
                                                    important to consult your financial
                                                    institution to determine if this is
                                                    applicable.
                                                    Also make sure you budget for
                                                    possible rate rises, as interest rates
                                                    fluctuate yearly.




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Finance



What you Can actually afford? don’t Guess!
Before you begin house hunting the most important thing to do is to work
out exactly how much you can afford to spend on your new home. Many first
home buyers do this by simply calculating if they can afford monthly mortgage
repayments. However mortgage repayments, whilst significant, are not the only
thing that needs to be considered when determining how much you can afford to
spend on your new home. Buying a home can result in many unforeseen costs.
It is important to know all the expenses involved upfront to avoid any unwanted
surprises along the way.


how much Can you Borrow?
The amount you can borrow will depend on a number of factors;

1) Your Income
   This is the most important factor which will determine the exact amount you can borrow. Your
   income needs to be able to cover repayments on your loan as well as your basic living costs. If you
   are applying for the loan jointly with another person your repayment capacity may be greater,
   which can mean greater borrowing power.


2) Employment Status
   One of the main things that lenders will look at is if you are employed. The lender will look at
   where you are employed and how long you have been employed by that corporation.


3) Financial Commitments
   Lenders will look at all other financial commitments you still having owing. This can include car
   repayments, personal loans, credit card debts and HEC’S debts.


4) Your Assets & Investments
   Your savings and other investments will also impact your borrowing capacity.


5) Your Deposit
   First home buyers should save around 10 – 20% of the property value as a deposit. The greater
   the deposit, the less you will have to borrow and the lower your repayments will be. However, if
   you borrow in excess of 80% you will be required to pay lenders mortgage insurance (LMI).




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



pg 5                                                                                 www.realestateVieW.com.au
                                                                     Ultimate FiRSt home BUyeRS GUide:
                                                                                                      May 2011, First Edition




Finance



6) Your Credit Record
   The lender will check to see that you have no red flags against your name for defaulting on
   previous loans, credit cards or other lines of credit by looking at your credit record.
   It is worthwhile to check your credit record before you apply for a home loan so you are able to
   amend information in your credit history if you believe it to be inaccurate.
   Where can you check your credit record?
   Veda Advantage Ltd provides a range of consumer information services to help consumers to be
   better informed in making major decisions such as applying for a home loan. Veda Advantage
   Ltd will give you access to your credit history so you can analyse your financial situation before
   applying for that home loan.
   To access a copy of your credit history, go to www.mycreditfile.com.au or phone (02) 9464 6000.


Understanding the types of loans available on the market
Every person is different and it is important to find the right mortgage that suits your needs and
lifestyle. To find the right mortgage it is important to assess the options available on the market to
determine which option is appropriate for you.


Table 4: Types of Loans Available to First Home Buyers
Use the following table to help you compare the types of loans available to first home buyers.

 home loan definition                                    advantages                         disadvantages
 type
 Standard              A Standard Variable               1. If interest rates               1. If interest rates rise,
 Variable              Rate Home Loan is one                drop this means                    repayments will rise
 home loan             of the more popular                  repayments                         along with the amount
                       types of loans for a first           might drop.                        of interest paid.
                       home buyer. With this
                                                         2. Pay off your home               2. Extra features mean
                       mortgage the interest
                                                            loan faster by making              you may pay a higher
                       rate is not locked in and
                                                            extra payments                     interest rate than a
                       thus it moves up and
                                                            without incurring                  basic variable loan.
                       down when interest
                                                            penalties.
                       rates change.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



pg 6                                                                                 www.realestateVieW.com.au
                                                                     Ultimate FiRSt home BUyeRS GUide:
                                                                                                      May 2011, First Edition




Finance



 Basic                 Basic variable home               1. Lower interest rates            1. Not as flexible as
 Variable              loans are sometimes                  than the standard                  standard variable
 home loan             referred to as ‘no frills’           variable loans.                    home loans.
                       loans. This type of loan
                                                         2. Repayments are                  2. Offer less features
                       is a good home loan
                                                           generally lower than
                       to consider if you are                                               3.If interest rates
                                                           standard variable
                       not interested in added                                                 rise repayments
                                                           loans.
                       features but still want                                                 will increase
                       some flexibility with the         3. If the Reserve Bank
                       interest rate.                       of Australia or one of
                                                            the four banks drops
                                                            interest rates this
                                                            means repayments
                                                            might drop.
 Fixed Rate            Fixed rate home loans             1. Even if interest rates          1. If interest rates fall
 home loan             are popular for those                rise borrowers will                the borrowers
                       people who like to know              continue to pay the                repayments will not,
                       what they are paying                 same amount.                       they stay the same.
                       each month. The interest
                                                         2. Fixed rate loans                2. If you decide to sell
                       rate for a fixed home loan
                                                            generally offer cheaper            your home during
                       can be fixed for anything
                                                            interest rates than                the fixed rate period
                       between one and 10
                                                            flexible home loans.               and you want to pay
                       years and it will remain
                                                                                               off the loan in full the
                       the same for the duration         3. Allows more precise
                                                                                               borrower can be stung
                       of the loan regardless               budgeting.
                                                                                               with heavy fees.
                       what happens to interest
                       rates.
 Split Rate            A split rate home loan            1. When interest rates             1. If interest rates rise,
 home loan             is when you split your               rise you can have the              the repayments on the
                       home loan so part of the             interest rate security             variable part of the
                       loan is a variable rate              of a fixed loan joined             loan will also increase.
                       home loan and the other              with the repayment
                                                                                            2. If interest rates
                       half as a fixed rate home            flexibility of a variable
                                                                                               drop, the repayment
                       loan. This type of loan              rate loan.
                                                                                               on the fixed rate
                       usually has a time frame.
                                                         2. Additional payments                portion of the loan
                       After the time frame has
                                                            on a variable portion              will remain the higher
                       past the whole amount
                                                            can be made.                       fixed amount.
                       of the loan is converted
                       into a variable rate loan                                            3. Allows limited
                       unless you renegotiate to                                               additional
                       extend the split rate loan.                                             payments only.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



pg 7                                                                                 www.realestateVieW.com.au
                                                                     Ultimate FiRSt home BUyeRS GUide:
                                                                                                      May 2011, First Edition




Finance



 introductory          The introductory                  1. What you save in                1. Most banks charge
 Rate home             rate home loan or                    repayments can                     penalties if you decide
 loan                  ‘honeymoon’ home loan                help offset the costs              to get out of the loan
                       offers first home buyers             of stamp duty,                     within the first 3-4
                       a lower interest in the              solicitors and moving.             years after settlement.
                       first year of the loan.
                                                         2. When payments                   2. Payments increase
                       At the end of the first
                                                            are made at the                    after the introductory
                       year the interest rate
                                                            introductory rate,                 period.
                       changes back to the
                                                            the principal can be
                       standard variable rate.
                                                            reduced quickly.
                       This loan allows for lower
                       fees because it usually
                       provides less features
                       and extra payment
                       rules to borrowers than
                       other loans.
 No deposit            No deposit home loans             1. No need to save the             1. The strict lending
 home loans            offer borrowers a                    10% - 20% deposit                  criteria make
                       chance to borrow up to               typically required by a            approval difficult.
                       100% of the purchase.                bank and non-bank.
                                                                                            2. Only certain types
                       However, there are very
                                                         2. Most no deposit                    of properties can apply
                       strict requirements and
                                                            home loans include                 for this loan.
                       assessment criteria
                                                            additional features
                       which can make approval                                              3. Higher interest rates
                                                            such as repayment
                       very difficult.                                                         initially and because
                                                            and redraw options.
                                                                                               you are borrowing
                                                                                               more money you will
                                                                                               also pay more interest
                                                                                               in the long term.
                                                                                            4. Borrowers will most
                                                                                              likely be charged
                                                                                              Lenders Mortgage
                                                                                              Insurance (LMI) when
                                                                                              you borrow more than
                                                                                              80% of the property
                                                                                              price. In addition, extra
                                                                                              costs such as stamp
                                                                                              duty and legal fees.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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                                                                     Ultimate FiRSt home BUyeRS GUide:
                                                                                                      May 2011, First Edition




Finance



Pre-approval

What is Pre-approval?
A home loan pre-approval illustrates clear guidelines provided by your lender, on
how much money you have to work with, helping you narrow your property search
and put you in a strong position to negotiate with a vendor or bid at auction.
A home loan pre-approval is similar to full finance approval except that the property
you intend to purchase has not yet been determined. Some conditions usually need
to be met before full finance approval will be granted.

Why do you Need it? The Benefits
> Pre-approval can give you a good idea of the type of mortgage you will be qualified for and the price
  range you can afford.
> Provides proof to the real estate agent and seller that you are conditionally approved for a specific
  loan amount.
> When you have found the right property you can focus on the purchase process rather than having
  to sort out finance at the same time.
> Sometimes, sellers will accept an offer below listed price and take a property off the market because
  they know the buyer is serious.
> Is offered by most lenders at no cost
Getting your loan pre-approved can make sense from both a peace of mind and time management
point of view but it is important to speak to your broker or lender to work out the best option for you.

 Buyers tip: once you find a house you like, ask your lender for a pre-approval letter
 that shows you’re approved up to that home’s asking price only. this will help
 discourage the seller from increasing the asking price.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



pg 9                                                                                 www.realestateVieW.com.au
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Finance



Government assistance

First Home Owner Grant
The First Home Owner Grant (FHOG) scheme was established by the Australian Federal Government
to encourage and assist home ownership. The First Home Owners Grant is a one-off, tax-free $7,000
payment provided to people buying their first home in Australia.


Eligibility Checklist
     You are an Australian citizen or permanent resident buying or building your
     first home in Australia.
     The property you want to buy is a recognised house, unit or flat specifically
     designed for people to live in.
     You or your spouse/partner have not received a grant in any State or Territory of Australia.
     You or your spouse/partner have not owned residential property, either jointly, separately
     or with some other person prior to 1 July 2000, in any State or Territory of Australia.
     You or your spouse/partner have not previously owned an interest in land in Australia that had a
     residence for at least 6 months on it prior to July 1, 2000.
     You or your spouse/partner have not received a grant in any State or Territory of Australia.
     You are a person (not a company) and at least 18 years of age at the time of settlement
     or completion of construction.
     You must be able to occupy the home within 12 months of settlement or 12 month of building
     completion if it’s a newly built home.
     Note: There are minimum periods of occupancy required by each state or territory.
     You must be able to apply for the grant within 12 months of settlement or completion
     of a newly build home.
     Understand joint applicants are restricted to a single application for a single property and only
     one payment of $7,000 is made.
Based on the above information if you believe you are eligible to apply for the first home
owners grant, ensure to consult with legal representation beforehand to guarantee you are
a candidate to apply.


How to Apply for the FHOG and Additional Grants
The First Home Owner Grant is distributed on behalf of the Federal Government by the state and
territory governments. Each state in Australia may also offer additional grants for first home buyers.
For more information about the First Home Owners Grant or to obtain an application form take a
look at the website of the revenue office in your state or territory.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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                                                                     Ultimate FiRSt home BUyeRS GUide:
                                                                                                      May 2011, First Edition




Finance



applying for a home loan

Choosing the Right Home Lender
Before you can even apply for your home loan, you will need to go through a home mortgage lender.
There are a number of different types of home mortgage lenders, some who deal directly with
prospective home buyers and others who merely put up money. The list below will help you compare
the types of home mortgage lenders available for first home buyers.


Mortgage Brokers
Mortgage brokers are professionals who bring together lenders and borrowers. A Mortgage Broker
will help you find the right home loan for your needs by researching a range of loans available from
multiple lenders even hundreds of lenders (usually banks) very quickly. Because Mortgage Brokers
are up to date with all the current home loans available, they act as the go to person for you for
mortgage information and will help you through the application and settlement process.
They generally charge the borrower nothing for their service, as brokers are paid a commission by
the lender when the mortgage is settled.


Mortgage Managers vs Mortgage Broker
A Mortgage Broker doesn’t actually lend you money. Their role is to facilitate a loan - helping you
choose from a range of Lenders.
A Mortgage Manager or Non Bank Lender, on the other hand, does lend money. Non Bank Lenders go
into the financial markets, obtain funds, and then offer those funds to borrowers at particular terms.


Banks, Credit Unions and Other Lending Institutions
The loan officer at a bank, credit union or other lending intuitions is an employee who work to sell
and process mortgages and other loans provided by the employer. They often have a wide variety of
loan types to choose from, but all loans originate from one lending institution.
The loan officer will take your application and works to find a home loan that suits your needs. If
your personal credit is approved they will also help process the purchase.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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What a lender Can expect of you
It is not unusual for a lender to ask you different questions during your meeting to examine if you are
suitable for a loan.


Table 5: Process & Criteria
Use the following table to help you better prepare when meeting with a lender.

                           What a lender is looking for                     What to bring
 Proof of identity         > Proof of identity and photographic             > Drivers license or Passport
                             identification.
 Proof of                  > Your capacity to repay your                    > At least the three most
 employment                  mortgage.                                        recent pay slips
 and wages                 > The lender will be looking to see              > A letter from your employer
                             how much you earn and the length                 detailing your income and
                             of your employment                               length of employment.
 Financial                 > Have you had credit issues in the              > Up to six months of bank statements
 commitments                 past as well as -what you may owe                including personal loans, credit cards
                             to other financial institutions.               > This time frame may vary depending
                                                                              on the lender, be sure to confirm
                                                                              before your meeting.
                                                                            > The lender will also be referring
                                                                              to your overall credit history.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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 assets,                   > are you receiving                              > Up to three months of bank
 investments                 additional income?                               statements including transactions
 & additional              > What are your existing assets                    and savings accounts.
 income                      and investments?                               > this time frame may vary
                           > are you receiving                                depending on the lender, be sure
                             additional income?                               to confirm before your meeting.
                                                                            > A letter from Centerlink if
                                                                              you are receiving a pension / family
                                                                              allowance.
                                                                            > Investment papers – e.g.. A letter
                                                                              from your real estate agent if you
                                                                              are receiving rental income or if you
                                                                              have shares and receiving income
                                                                              you will need to provide all the
                                                                              relevant paperwork.
                                                                            > An approximate value of
                                                                              other assets such as furniture and
                                                                              jewellery.
 insurance &               > details of your personal                       > Documentation relevant to
 Superannuation              insurance policy if relevant.                    your life insurance.
                           > details of your superannuation                 > Superannuation details i.e.
                             account.                                         How much you have in your
                                                                              superannuation?
 home / Children           > how long you have lived at                     > If you own your current home
                             your current address?                            you should bring your previous
                           > your dependent children?                         settlement documentations.

Be sure to confirm with your lender what is required from you to bring to your meeting beforehand to
avoid slowing down the process.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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your loan documents - What to expect!
When all your documentation is received the lender will have to verify and validate that all of
the information you have provided is true and correct. Verification requests may be sent to your
employers, mortgage holder/landlord and lending institutions.
The process of a loan application usually takes about one to two weeks but can be delayed depending
on the lender. If you have been approved for a loan, the lender should make you an offer by providing
you with your loan documents. You will need to read, sign and return these documents so your lender
can take the next steps when settlement time comes around.


Questions you Should ask your lender When taking
out a mortgage loan
When you are applying for a loan you should be sure to ask what features are offered with the loan.
Loan features can often save you money and help you pay off the loan faster.
> Can I make additional payments without a penalty charge?
> Is there a redraw facility I can use at any time? How can I access it?
> Can I switch between loans?
> Is the loan transferable to another property when I move?
> What are the repayment options?
> Can I switch the type of loan I have (fixed, variable etc) at no extra cost?
> How often can I make repayments (weekly, fortnightly, and monthly)?
> Do I have a choice of principle and interest or interest only repayments?
> How much are these feature to use?

It is important that you ask your lender about the costs of all the above features and consider
how often you are likely to use these features.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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What is the Comparison Rate?
It is mandatory for all lenders to publish a Comparison Rate to help you compare different
types of loans. The rate helps borrowers know how much the loan will cost them per year / over
a long period of time.
Before you sign for a loan you should know exactly what fees and charges will be charged to your
loan account. The comparison rate does not include all the costs of a loan, so it is very important to
know exactly what is and is not included.

What the comparison rate doesn’t include.
> Government and statutory fees.
> Lenders Mortgage Insurance or valuation charges.
> Fee waivers or any discounts that your lender might apply to the loan.
> Event based charges – redraw fees or early repayment fees.

What the comparison rate does include.
> The interest rate.
> Loan approval and any other up-front fees.
> Any ongoing account keeping fees.




This document was prepared as a guide by Tomorrow Finance Group Pty Ltd
ABN 81 141 534 269 ACL 385347 (“Tomorrow Finance”). The information in this document is general and if you need advice
should seek professional financial advice on your circumstances. Tomorrow Finance is not responsible for any reliance on the
information in this document. The information in this document is current as at May 2011.



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Understanding the market
Before you venture out to inspect potential properties to purchase it is important to
do your research. These days real estate institutes, property portals and data sites
provide an array of information that enable you to be more informed about current
market conditions, suburb trends and other key information which may impact your
decision of where to buy and at what price.


Sources of information/Research
1. data Sites
Over recent years a number of sites have been established to enable consumers to access current
sales results and historical sales data. This information will assist you to gain a good grasp of
current market trends and historical growth patterns.
Some of them include;
> Propertydata.com.au
  PropertyDATA.com.au contains data collected by the real estate institutes across Victoria, New
  South Wales and South Australia. The site will allow you to access the same comprehensive,
  accurate and up to date property sales information relied upon by estate agents, valuers and
  Australia’s major banks. The site provides free as well as paid property reports, median prices,
  capital growth figures and suburb profile information.
> Residex
  Residex provides consumers with the ability to purchase information on all areas of the real estate
  market, such as analysis of market movements, price estimation, historical growth data and more.
> Real estate institutes
  There are real estate institutes across each state of Australia that act as the industry body in that
  specific state. The institutes amongst other things publish market commentary as well as median
  prices and other market data.

2. Sold archives on Property Portals
Aside from dedicated data sites, property portals also have sold archives to enable you to browse
recent sales for your suburb of interest.

3. Newspapers – auction Results & Commentary
Whilst newspaper readership and property advertising has declined in recent years, many of the
major newspapers provide detailed market analysis and commentary from a range of industry
leaders. Major newspapers will also publish weekly auction results on Sundays and Mondays.




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the Property


4. News & Blogs
It is also important to read some of the latest news and blogs to get a feel for what factors are
impacting the market at present.
Some of the best ones include;
> Australian Real Estate Blog - http://reic.com.au/blogs/default.aspx
> Australian Property Investor - http://www.apimagazine.com.au/
> News.com.au – property section - http://www.news.com.au/money/property

5. attending open inspections
Attending open inspections are a necessary part of the research process. During the early stages of
your property search attend opens and take the time to talk to real estate agents as they are the
experts on real estate in your local area. For full details on things to consider at an open inspection
refer to page 19 of this guide.


making a list
Before you begin looking at potential properties it is also important to make a list of exactly what
you are looking for and why. This will ensure that your decision to buy a certain property is based on
facts not just emotion. In addition if you are buying with a partner, family member or friend it will
ensure that you agree on the things that are important to both parties when buying a home.
Some important things to consider when buying;
> What type of property are you looking for?
  One of the most important decisions you will need to make is the type of property you wish to
  purchase. There are three main things you will need to consider. These include:
  » The type of residence you are looking for i.e. house, apartment or townhouse. The type of
    residence you choose will impact your level of privacy, shared areas and maintenance fees.
  » The type of material you require your home to be constructed from i.e. weatherboard, solid brick
    or concrete to name a few. The type of material a home is built from is important as it will impact
    the level of upkeep you will need to make on the property.
  » Would you prefer a newly built or established home? There are pros and cons to both. For more
    information about the pros and cons for buying a newly built home vs. an established home refer
    to ‘Buying a home off the plan vs. an established home’ on page 7 of this guide.
> Will the property accommodate your changing needs over time?
  When buying a house you need to consider if the property will accommodate your needs not only
  now but in the coming years. If you are planning to start a family or wish to start your own business
  do you need additional rooms?
> What public facilities are important to you?
  It is important to consider what amenities you need close by. Do you need to be near public
  transport to get to and from work? If you are into health and fitness is there a local gym? Or if you
  have children, living close to a school may be important.
By considering some of these crucial questions early on you will be able to spend your time on seeing
properties which are in line with what you are looking for.




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Buying an off the Plan home vs. an established home

Table 4: Pros & Cons Buying Off the Plan vs. Established Homes
         established home                               off the Plan
 Pros    > Know your settlement date:                   > lock in a price: Able to buy a home
           When you purchase an established home          and lock in the price while construction
           you know exactly when your settlement          takes place. This means that even if
           date will be and have the opportunity to       property values rise during construction
           negotiate this on occasion.                    you will still pay the same amount for
         > Building inspections: With an                  the property.
           established home you can hire a              > have time to save for a deposit:
           professional building inspector, surveyor      Typically properties purchased off the
           or architect to provide a professional         plan have a longer settlement period
           building inspection report of the              as you have to wait for the property
           property you intend to purchase.               to be built. This means you will have
         > Know exactly what you are getting:             more time to save for the deposit on the
           There are no surprises; you can see            property and more time in general to
           exactly what you are going to get for the      organise your finances.
           purchase price.                              > Stamp duty Savings: Stamp duty
         > more choice: There are more                    costs for properties off the plan will
           established homes than new ones which          generally be lower than buying an
           means you can be a critical shopper,           established home.
           comparing different features until you       > low cost in maintenance: You will not
           find exactly the right combination at the      have to pay as much for maintaining
           right price.                                   the building as everything will be new
                                                          and should not break.
                                                        > Builders’ guarantee: All new homes
                                                          built in Australia come with a 7 year
                                                          builders guarantee which means
                                                          structural or interior building faults
                                                          must be repaired by the builder.
                                                        > more environmentally friendly:
                                                          There is a 5 star environmental standard
                                                          for all new homes and for renovations
                                                          and relocations of existing homes. It is
                                                          compulsory for new homes to have:
                                                          » 5 star energy rating for the building
                                                            fabric
                                                          » Water efficient taps and fittings
                                                          » A rainwater tank for toilet flushing or
                                                            a solar hot water system.




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 Cons      > Concessions: When buying an                  > don’t know what you are getting:
             established home you may have to               Whilst you have an idea of the
             make concessions with regard to                layout, furnishings and structure of
             features / design you want. As a result        the property, you are unable to see
             you may need to spend money to                 exactly what you are buying. Once the
             change the look and feel of the property.      build is complete it may not live up to
           > Stamp duty costs: Stamp duty costs             expectations.
             for an established home will always be       > Construction and weather problems:
             greater than buying a home off the plan.       Construction or weather issues may
                                                            delay delivery. If a home’s construction
                                                            is delayed you may need to seek
                                                            alternative accommodation which is an
                                                            added expense.
                                                          > limited recourse with the builder:
                                                            If there is a dispute with the builder,
                                                            you may have limited recourse as the
                                                            contract for large scale developments
                                                            resides between the developer and the
                                                            buyer.
                                                          > Not allowed to inspect property:
                                                            The buyer will generally not be able to
                                                            inspect the property until completion
                                                            date which can be months or years.
                                                          > Settlement date can change:
                                                            If construction is delayed this means the
                                                            settlement date can change which can
                                                            affect you organising your finance.



 Buyers tip: if buying off the plan, get a firm completion date from the developer
 and ensure you seek professional legal advice before signing a contract with the
 developer.




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Buying methods
Before you venture out in the field to find your dream home it is important to
familiarise yourself with the various ways to buy property. This is because the
method for which the property is being sold will impact the process you need to go
through to acquire it.

Table 5: Various Buying Methods
               auction          Private Sale/          expression of             tender
                                treaty                 interest
 What is it?   A public sale    A private sale has     An expression of          A tender is a
               of property      no specified closing   interest is similar to    very formal sale
               where the        date and is usually    a private sale/treaty     process, which
               highest bidder   negotiated between     however a formal          requires potential
               is normally      a buyer and vendor     written offer must        buyers to submit
               the successful   with the assistance    be submitted for the      a proposal in
               buyer.           of an agent or legal   property by a specific    response to
                                representative.        date.                     the request to
                                                                                 the owner’s
                                                                                 advertised
                                                                                 tender. Given
                                                                                 the complexity
                                                                                 of this process,
                                                                                 it is usually
                                                                                 only reserved
                                                                                 for premium
                                                                                 properties in the
                                                                                 residential sector.




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making an   If a property        The offer is made        The offer is made via       Your proposal
offer       is for sale via      via the agent. The       the agent; however          to the owner’s
            auction there        vendor does not have     you will be required to     advertised tender
            are two ways         to accept your offer,    fill in an ‘expression of   is your offer.
            you can make         as they may wish to      interest’ document by       This detailed
            an offer;            wait to see what other   a certain date.             document may
                                 offers are made on the                               include price,
            1. Before the
                                 property.                                            interest rates and
            auction: You
                                                                                      terms. Because
            can make an
                                                                                      of the complexity
            offer prior to the
                                                                                      of this process
            auction. Keep in
                                                                                      each party
            mind a property
                                                                                      would have an
            remains on
                                                                                      agent and legal
            the market
                                                                                      representative
            while a vendor
                                                                                      to help complete
            considers your
                                                                                      the tender for
            offer. A vendor
                                                                                      submission.
            does not have
            to accept pre-
            auction offers,
            even generous
            ones, and may
            prefer to sell at
            auction.
            2. at auction:
            You can make
            an offer at
            auction. If you
            are the highest
            bid at the fall
            of the hammer
            after the
            property was
            declared on the
            market you will
            purchase the
            property.




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 Negotiation   There is no       There is either an          As a buyer you can            Commonly there
               negotiation       asking price or an          negotiate with the            will be an initial
               if you are the    indicative range in         vendor to make the            meeting between
               highest bidder    which the owner             sale subject to certain       the vendor and
               above the         will consider offers.       conditions; however           yourself to
               reserve price.    As a buyer you can          the vendor does not           discuss terms
               However, if       negotiate with the          have to agree to your         and negotiate
               the property      vendor to make the          terms.                        before you
               is passed in      sale subject to certain                                   submit the final
               and you are       conditions; however                                       tender document.
               the highest       the seller does not
               bidder you have   have to agree to your
               the right to      terms.
               negotiate with
               the vendor.
 deposit       You must pay a    If your offer is            If your offer is accepted     The owners
               deposit on the    accepted you will           you will be required to       advertised tender
               day following a   be required to pay a        pay a deposit, if you         will disclose if
               successful bid.   deposit, if you have        have not already done         there is also a
                                 not already done so.        so.                           required deposit.
                                                                                           In most cases
                                 If the vendor is not        If the vendor is not
                                                                                           there is also a
                                 using an agent the          using an agent the
                                                                                           cost to submit
                                 deposit must be             deposit must be
                                                                                           the tender.
                                 paid to their legal         paid to their legal
                                 representative and          representative and
                                 held in their trust         held in their trust
                                 account.                    account.

 Cooling-off   There is no       The cooling-off period      The cooling-off period        The cooling-off
 period        cooling-off       varies from state           varies from state             period depends
               period for        to state. Below is a        to state. Below is a          on the tenders’
               residential       breakdown for each          breakdown for each            terms. Each
               properties sold   state;                      state;                        tender will have
               at auction.                                                                 completely
                                 ViC: Victorians             ViC: Victorians who
                                 who buy residential         buy residential property      different terms
                                 property are legally        are legally entitled to       set out. So each
                                 entitled to a cooling-      a cooling-off period of       transaction needs
                                 off period of three clear   three clear business          to be treated
                                 business days.*             days.*                        differently.
                                 Wa: A cooling-off           Wa: A cooling-off
                                 period for a contract for   period for a contract for
                                 sale of land does not       sale of land does not
                                 apply.**                    apply.**
                                 Qld: Queenslanders          Qld: Queenslanders
                                 who buy residential         who buy residential
                                 property are legally        property are legally
                                 entitled to a cooling-      entitled to a cooling-
                                 off period of five clear    off period of five clear
                                 business days.***           business days.***




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 Cooling-off   There is no       The cooling-off period      The cooling-off period        The cooling-off
 period        cooling-off       varies from state           varies from state             period depends
               period for        to state. Below is a        to state. Below is a          on the tenders’
               residential       breakdown for each          breakdown for each            terms. Each
               properties sold   state;                      state;                        tender will have
               at auction.                                                                 completely
                                 taS: A cooling-off          taS: A cooling-off
                                 period for a contract       period for a contract of      different terms
                                 of sale of land             sale of land does not         set out. So each
                                 does not apply in           apply in Tasmania.            transaction needs
                                 Tasmania.                   Sa: When purchasing           to be treated
                                 Sa: When purchasing         residential property          differently.
                                 residential property        in South Australia a
                                 in South Australia a        cooling-off period of
                                 cooling-off period of       two clear business days
                                 two clear business days     applies for a contract of
                                 applies for a contract of   sale of land.****
                                 sale of land.****           Nt: In the Northern
                                 Nt: In the Northern         Territory a cooling-off
                                 Territory a cooling-off     period of four clear
                                 period of four clear        business days applies
                                 business days applies       and only from the
                                 and only from the           day after the legal
                                 day after the legal         representative /
                                 representative /            conveyance receives
                                 conveyance receives         the contract.
                                 the contract.               aCt: A cooling-off
                                 aCt: A cooling-             period of five clear
                                 off period of five          working days applies
                                 clear working days          to residential properties
                                 applies to residential      sold in the Australian
                                 properties sold in the      Capital Territory. *****
                                 Australian Capital          NSW: When
                                 Territory. *****            purchasing a residential
                                 NSW: When                   property in New South
                                 purchasing a                Wales the cooling-off
                                 residential property        period starts at the time
                                 in New South Wales          the sale of contract is
                                 the cooling-off period      made and concludes at
                                 starts at the time          5.00pm on the fifth day
                                 the sale of contract is     after the contract was
                                 made and concludes at       made.******
                                 5.00pm on the fifth
                                 day after the contract
                                 was made.******




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the Property



 Buyers tip: if you are not confident negotiating with the agent, you may prefer to
 engage a Buyer’s agent or other professional to do the bargaining for you. For more
 information about buyer’s agent please refer to page 14 of this guide.


 Buyers tip: the best way to learn how an auction works is to go to as many auctions
 as possible. Go to a couple of auctions on properties that you’re not intending to
 buy. observe the process and the way the auctioneer runs the show. take note of the
 strategies employed by those who are successful.

Notes:
*Victoria – There are exceptions to this rule. For more information, consult the Sale of Land Act 1962 (Section 31)
or Consumer Affairs Victoria.
**Western Australia – There are exceptions to this rule. Under the Retirement Village Act a cooling-off period only applies
to a contract of sale of land located within a retirement village.
***Queensland – There are exceptions to this rule. For more information, consult the Property Agents and Motor Dealers Act
2000 (PAMDA).
****South Australia – There are exceptions to this rule. For more information, consult the Office of Consumer and Business
Affairs.
***** Australian Capital Territory - The cooling-off period does not apply in the following cases:
      - The property was purchased on the same day as a public auction at which the property was passed in.
      - The buyer waives the cooling-off rights after having received independent advice from a solicitor
      - A corporation
      - The property was sold at auction or by tender
******New South Wales – There are exceptions to this rule. For more information, consult with your solicitor/conveyancer.




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the Role of a Buyer’s agent

Who are Buyer’s Agents?
A Buyer’s Agent is a person who works closely with the buyer through all the
relevant steps of purchasing a property. They are either fully licensed or act as a
representative under a licensed agency. A Buyer’s Agent is employed to eliminate
the stress and anxiety that is common when purchasing a property.

How a Buyer’s Agent Can Help You Purchase Your Home
A Buyer’s Agent can provide end to end services to support a buyer’s search and purchase on the
home. They can help you with:
> Sourcing properties and creating a shortlist of the most suitable.
> Suggest whether the property requires a building inspection and providing a contact.
> Provide an accurate summation of the property’s worth.
> Having the contract and other documents reviewed by a professional.
> Assisting in the preparation of a Power of Attorney.
> Negotiating the most beneficial deposit and settlement terms for your requirements.
> Negotiating on your behalf for a private sale.
> Bidding on your behalf for a sale by auction.
> Negotiating access to the property before settlement if required.
> Accompanying/representing you at the final inspection.

Costs Involved
> An upfront fee is usually payable, sometimes described as an administrative fee. This amount varies
  from $500 to $3,000 and is usually reimbursed once a property is secured.
> The fee for a full service (which includes assistance from start to end of the purchase) is
  approximately 2% of the purchase price.
> The fee to secure a property that a buyer has found themselves varies between .5% and 1% of the
  purchase price, depending on the work and time involved.
> Consultancy fees may also be charged.

these are indicative fees only and can vary.


Finding a Professional Buyer’s Agent
A good place to find a licensed professional Buyer’s Agent in your area is on the Real Estate Buyers
Agents Association of Australia (REBAA) site - http://www.rebaa.com.au/
Information provided by Michael Ramsay, Director of Michael Ramsay Property (Buyer’s Agents) Vic 3141.




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locating Properties For Sale
Once you have made a list of what you are looking for in a property and
understand the property purchase methods, the next step is to begin to shortlist
properties to inspect.
There are a variety of methods that buyers can use to help locate properties. These include;

1. the internet
As the internet is now used by 87% of consumers to search for property it is the number one tool
agents use to advertise. The most popular sites in Australia to search for properties online are;
  » realestateVIEW.com.au
  » myhome.com.au
  » Domain.com.au
  » realestate.com.au

2. Newspapers
As the internet has grown in popularity listings in newspapers have reduced. Many agents do
however still use newspapers to advertise property and thus local and metro newspapers can still
be a useful resource to identify potential property.

3. direct Contact
One of the benefits of contacting your local agent is that you have someone else helping you to find
your ideal property. If you are top of mind the agent may also notify you of new properties on their
books before they are listed on the internet.

4. Promotional magazines
Larger real estate agencies usually produce weekly or monthly magazines to provide potential
buyers with a comprehensive list of properties they have for sale. These magazines are available
free of charge from most agencies as well as handed out at open inspections.




pg 26                                                                www.realestateVieW.com.au
                                                       Ultimate FiRSt home BUyeRS GUide:
                                                                                  May 2011, First Edition




the Property



inspecting a Property
Once you have shortlisted some potential properties the next stage is to attend
open inspections.

Planning Your Schedule
As most open inspections are held at similar times and on similar days it is important to plan your
weekly open inspection schedule to ensure you don’t miss viewing properties of interest.
Use the following inspection planner to help you plan weekly property inspections and keep track of
properties you have viewed.




pg 27                                                                www.realestateVieW.com.au
                              Ultimate FiRSt home BUyeRS GUide:
                                                 May 2011, First Edition




the Property
open For inspection Planner
offer



            $




                $




                      $




                              $




                                      $




                                                $
location
auction
date/time
auction
agent’s
Phone
agent
asking
Price $


            $




                $




                      $




                              $




                                      $




                                                $
date/time
Viewing
Property
address




pg 28                                  www.realestateVieW.com.au
                                                           Ultimate FiRSt home BUyeRS GUide:
                                                                                           May 2011, First Edition




the Property



attending an open For inspection
As a property buyer you should view a property several times before deciding to buy
it. The first visit will give you an initial impression and will allow you to determine
if the property meets requirements such as: location, size, age, style and access to
facilities. A second visit will allow you to identify things you may have overlooked on
your first visit, as well as clarify any questions you may not have asked the agent.

Things to Bring at an Open For Inspection
When you enter a property at an open inspection, you may be asked to provide proof of identity as
well as contact details to the agent. This is a security measure. It is not a legal requirement for you
to leave your details with an agent at an open house, but sellers can make this a condition of entry
to their property.
Aside from proof of identity, it is also advisable to bring a checklist and/or notepad to write detailed
notes about the property.


Things to Look Out For at an Open For Inspection
When inspecting the property there are a few things you should look out for, aside from those items
on your wish list.

Structural issues
A major structural issue can add significant costs to home ownership. Some of the key structural
issues you should look out for include;
> Sloping or bouncy floors may mean stumps need replacing.
> Damp brick walls can indicate rising or salt damp.
> Blisters or bubbles on paintwork can indicate termite activity.
> Cracked walls can indicate subsidence, requiring the replacement of stumps.
> Mouldy walls, lifting tiles, peeling paint or pools of water in wet areas can indicate
  excessive moisture.
> Fretting (cracked) brickwork can indicate major structural problems.

traffic/Noise levels
Make sure to visit the property at different times of the day to determine traffic and noise levels.
The street may be peaceful and quiet in the morning but in the evening, it may overflow with traffic.

Proximity to Key activities
When inspecting the property make sure to find out the proximity of the property to key services
such as public transport, supermarkets and even schools. Although these services may not be
important to you they may be important to a potential buyer in the future when you decide to sell
the property.




pg 29                                                                     www.realestateVieW.com.au
                                                         Ultimate FiRSt home BUyeRS GUide:
                                                                                    May 2011, First Edition




the Property



Open For Inspection Buying Checklist
When inspecting a home it is beneficial to use a checklist to conduct a thorough review of the
property. Checklists can reveal problems a home may have which may indicate to you that major
repairs are needed on the home.
Following is a helpful checklist for you to use during your open for inspections to ensure you don’t
miss anything inside and outside the home.




pg 30                                                                 www.realestateVieW.com.au
                                                                                       Ultimate home BUyeRS GUide:
                                                                                                            May 2011, First Edition




open for inspection
Buying Checklist

PRoPeRty detailS                                                      toiletS                      1         2              3           4
Address                                                               In bathroom                 Y    N    Y    N         Y    N     Y     N
Agent/Agency                                                          Powder room                 Y    N    Y    N         Y    N     Y     N
Agent/Agency contact details                                          Windows                     Y    N    Y    N         Y    N     Y     N
Inspection Date/Time                                                  Ventilation fans            Y    N    Y    N         Y    N     Y     N
Sale price/auction price                                              KitCheN
Price negotiable                       Yes       No                   Size
Auction date (if applicable)                                          Breakfast bar/Benchtop               Yes       No
Any offers already made?               Yes       No                   Countertops                          Yes       No
           Details                                                    Cooktops                             Gas       Electric
GeNeRal                                                               Oven                                 Gas       Electric
Land size (sq. metres)                                                Hot water                            Gas       Electric
Total property size (sq. metres)                                      Dishwasher                           Yes       No
Age of home                                                           Rangehood                            Yes       No
Anyexistingapprovedextensionplans      Yes       No                   Ample cupboard space                 Yes       No
           Details                                                    liViNG aReaS               LOuNGE    DINING         FAmILY     STuDY
Any rising damp?                       Yes       No                   Size
Easements on property                  Yes       No                   Air Con/Ceiling fans        Y    N    Y    N         Y    N     Y     N
Stories/Floors of building                                            Heating/Fireplace           Y    N    Y    N         Y    N     Y     N
Schools proximity                                                     Flooring type
Public transport proximity                                            Telephone points            Y    N    Y    N         Y    N     Y     N
Shops proximity                                                       Storage space               Y    N    Y    N         Y    N     Y     N
Views                                  Yes       No                   laUNdRy
Fees       Council                     Yes       No   $               Size
           Body Corporate              Yes       No   $               Separate room                        Yes       No
           Other                       Yes       No   $               Storage space                        Yes       No
BedRoomS                       1        2             3       4       Flooring type
Size                                                                  Outside access                       Yes       No
Built-in robes                 Y   N   Y     N        Y   N   Y   N Room for washing machine               Yes       No
Walk-in robes                  Y   N   Y     N        Y   N   Y   N Room for dryer                         Yes       No
Ensuite                        Y   N   Y     N        Y   N   Y   N CaR SPaCe
Air Con/Ceiling fans           Y   N   Y     N        Y   N   Y   N Garage                                 Yes       No
Heating/Fireplace              Y   N   Y     N        Y   N   Y   N            Number of spaces
Flooring type                                                                  Lock up                     Yes       No
Satisfactory paintwork         Y   N   Y     N        Y   N   Y   N            Remote control              Yes       No
BathRoomS                      1        2             3       4       Driveway                             Yes       No
Size                                                                           Number of spaces
Ensuite                        Y   N   Y     N        Y   N   Y   N Street parking                         Yes       No
Shower                         Y   N   Y     N        Y   N   Y   N            Number of spaces
Bath tub                       Y   N   Y     N        Y   N   Y   N            Permit necessary            Yes       No
Vanity                         Y   N   Y     N        Y   N   Y   N            Visitor permits             Yes       No
Cupboard space                 Y   N   Y     N        Y   N   Y   N
Tiled/Painted                  Y   N   Y     N        Y   N   Y   N
Flooring type                                                                                                               Please turn over



         pg 31                                                                               www.realestateVieW.com.au
                                                                            Ultimate home BUyeRS GUide:
                                                                                          May 2011, First Edition




open for inspection
Buying Checklist

oUtdooR aRea                  FRONT               BACK       otheR
Size                                                         Balconies
Fencing/Walls          Yes      No        Yes      No        Tennis court
Landscaping            Yes      No        Yes      No        Swimming pool
Pool                   Yes      No        Yes      No        BBQ
Clothes line           Yes      No        Yes      No
Deck/Veranda           Yes      No        Yes      No
Security locks/Gates   Yes      No        Yes      No
Storage                Yes      No        Yes      No
Roofing type
Yard faces             North      South   North      South
                       East      West     East      West
NoteS




       pg 32                                                                    www.realestateVieW.com.au
                                                         Ultimate FiRSt home BUyeRS GUide:
                                                                                     May 2011, First Edition




the Property



other Questions & things to Consider
> is there sufficient sound proofing?
  If you are looking to buy a unit or apartment, it is important to check if the property has
  sufficient sound proofing so you don’t have to listen to your neighbour’s music or conversations.
  Take particular notice of the building materials used and if they are solid and sturdy to provide
  a good sound barrier.
> is there sufficient insulation?
  Ensure you ask or check the type of insulation the property has, to ensure the property is
  well insulated for the cold and hot months. This will also affect things such as heater and
  air conditioner running costs.
> do special restrictions apply?
  Some local councils have restrictions on the type of changes that can be made to a property.
  These are generally known as covenants and can affect everything from the style of a fence
  or even the colour of a roof.
> are there potential zoning changes?
  Find out if there are any changes to zoning planned for the area before you consider buying
  and decide if these are a possible advantage or disadvantage to the area and property value.

Extra Questions for Apartment/Flat/Unit Hunters:
> does the body corporate allow a BBQ on the balcony or courtyard?
  With so many fire restrictions these days, some buildings do not allow BBQs to be lit on balconies.
  Make sure to ask if there are such restrictions; if yes is it relevant for whole year or only during
  certain time frames?
> does the body corporate allow tenants/owners to have animals?
  If you have a pet this is the first question you must ask when considering a property.
  Some complexes allow cats only, while others do not allow pets at all.
> is there permit parking?
  Most apartments/flats or units only come with one car spot. However if you need more room it
  is important to consider where you will park the additional vehicles. Some councils don’t allow
  occupants to apply for a permit if they live in an apartment complex. Make sure to ask the agent
  if there is permit parking available; if yes, how much is it going to cost you?




pg 33                                                                  www.realestateVieW.com.au
                                                            Ultimate FiRSt home BUyeRS GUide:
                                                                                      May 2011, First Edition




taking the Next Step



Finding out Reasons For Selling
Once you have found a property that you are interested in buying it is a
good idea to find out a bit more information about the property and reasons
the owner is selling.

Questions to Consider;
> Has the owner already purchased elsewhere or needs to move for their job? This presents an
  opportunity to possibly negotiate the price as the vendor may need to sell quickly.
> How long has the property been on the market? The timeframe the property has been on the market
  will give you an indication of interest in the property. If the property has been on the market for a
  while it is important to probe the agent to find out why.
> How many offers have been made on the property? If it is a private sale, finding out how many other
  offers have been made is important. If there is a lot of competition it may mean you need to go in
  with a higher offer to secure the property.
> Has the property been passed in at auction (if so, what was the highest bid?). If a property has been
  passed in and you would like to make an offer finding out what the highest bid was will help you work
  out what your starting offer should be.
> Is the vendor open to offers before auction? If you are keen to buy a property and don’t want to wait
  until auction find out if the seller is willing to take offers before the auction. You never know they
  may accept your offer.


the Contract of Sale
The contract of sale is the key document which commits you to the purchase
of a property.
A copy of the contract may be made available to the buyer and can be obtained
from the vendor through the agent. It is also important, as the buyer, to have a
solicitor or conveyancer check the document.
The contract contains;
> Particulars of the sale such as details of the property
> Names of the vendor and buyer
> Vendor’s estate agent
> Price of the property
> The deposit paid
> Balance owing at settlement
> Date of settlement (the day you become the owner)
> Special and general conditions
> Additional documentation relevant to the property (alternatively known as the Vendor Statement)




pg 34                                                                   www.realestateVieW.com.au
                                                             Ultimate FiRSt home BUyeRS GUide:
                                                                                               May 2011, First Edition




taking the Next Step



additional documentation
In most states in Australia there will be additional documents attached to the
contract which provides the buyer with detailed information about the property.
As this document’s contents and name differs by state the table below will help you
determine what the document is referred to and its contents in your state.

 Victoria       Vendor Statement Section 32
 (ViC)          What is it? The Vendor Statement is a document prepared by or on behalf of
                the vendor’s solicitor/conveyancer. The document informs you, the potential
                buyer, of any relevant information about the property you must be aware of.
                What does the document include?
                What does this document include?
                This document may include;
                > Building restrictions and copies of any permits issued for work carried out
                > A copy of the title showing existing boundary measurements of the land
                > Details of any mortgage over the property
                > Details of any outgoings such as any rates, body corporate fees or any other
                  charges that may apply
                is it compulsory? In Victoria it is compulsory for the vendor to provide a
                potential purchaser with the Vendor’s Statement before a contract of sale is
                signed. If the property is being sold at auction, a copy of the Vendor’s Statement
                and the contract of sale must be available for inspection before the auction.
                Note: If the Vendor’s Statement contains incorrect or insufficient information, as a buyer you
                should discuss these issues with your solicitor/conveyancer.

 New South      Schedule 1 Prescribed documents
 Wales          What is it? The Schedule 1 Prescribed Documents are documents prepared by
 (NSW)          the vendor’s solicitor / conveyancer which inform you, the potential buyer, of
                any relevant information about the property you must be aware of.
                What do these document include?
                These documents may include;
                > Copies of all deeds and restrictions on the use of land
                > Details of any mortgage over the property
                > Details of any outgoings such as any rates, body corporate fees or any other
                  charges that may apply
                The full contents of Schedule 1 Prescribed Documents can be found in the
                Conveyancing (Sale of Land) Regulation 2010 (NSW).
                is it compulsory? In New South Wales it is compulsory for the agent to have
                a copy of the Schedule 1 Prescribed Documents with the contract of sale before
                they can market the property.




pg 35                                                                         www.realestateVieW.com.au
                                                       Ultimate FiRSt home BUyeRS GUide:
                                                                                   May 2011, First Edition




taking the Next Step



 South            Form one disclosure Statement
 australia        What is it? It is the vendor’s sales agent’s responsibility to prepare the Form
 (Sa)             One Disclosure Statement and to make all the inquiries necessary to do so
                  accurately. This document discloses any information about the property which
                  may negatively alter the value of the property. This is to ensure that you, the
                  potential buyer, know exactly what you are purchasing.
                  What does the document include?
                  This document may include;
                  > Building restrictions and copies of any permits issued for work carried out
                  > A copy of the title showing existing boundary measurements of the land
                  > Details of any mortgage over the property
                  > Details of any outgoings such as any rates, body corporate fees, or any other
                    charges that may apply
                  is it compulsory? In South Australia it is compulsory for the vendor to provide
                  a potential purchaser with a Form One Disclosure Statement before a contract
                  of sale is signed.

 Queensland Currently there is no requirement under legislation in Queensland for a seller to
 (Qld)      provide relevant information about the property to prospective buyers.

 Western          Seller’s disclosure Statement
 australia        What is it? The Seller’s Disclosure Statement is a document prepared by the
 (Wa)             vendor’s solicitor/conveyancer for the estate agent. This document discloses
                  any relevant information about the property which you, the potential buyer,
                  must be aware of.
                  What does the document include?
                  This document may include;
                  > Building restrictions and copies of any permits issued for work carried out
                  > A copy of the title showing existing boundary measurements of the land
                  > Details of any mortgage over the property
                  > Details of any outgoings such as any rates, body corporate fees, or any other
                    charges that may apply
                  is it compulsory? In Western Australia it is not compulsory for a seller to
                  provide the Seller’s Disclosure Statement to a potential buyer.

 Northern         Currently there is no requirement under legislation in the Northern Territory
 territory        for a seller to provide relevant information about the property to prospective
 (Nt)             buyers.


 tasmania         Currently there is no requirement under legislation in Tasmania for a seller to
 (taS)            provide relevant information about the property to prospective buyers.




pg 36                                                                www.realestateVieW.com.au
                                                  Ultimate FiRSt home BUyeRS GUide:
                                                                             May 2011, First Edition




taking the Next Step



 australian   Required documentation for the sale of residential property or land
 Capital      What is it? In the Australian Capital Territory, the vendor of a residential
 territory    property must provide certain documents and reports before the property is
 (aCt)        offered for sales. These documents disclose any relevant information about the
              property which you, the potential buyer, must be aware of.
              What do these document include?
              These documents may include;
              > An assessment of the physical condition of the property structure
              > Statement of any provisions that may influence or restrict what can be done to
                the house or land
              is it compulsory? In the Australian Capital Territory it is compulsory for the
              vendor to provide a potential purchaser with the required documents before the
              property is offered for sale.




pg 37                                                          www.realestateVieW.com.au
                                                         Ultimate FiRSt home BUyeRS GUide:
                                                                                     May 2011, First Edition




your Complete Guide to
Buying your First home

Professional Building inspections
Sometimes it is a good idea to hire a professional building inspector, surveyor or architect to provide
a professional building inspection report for the property you intend to purchase. This can be
particularly important if you have noticed any potential structural issues like cracking but still wish
to proceed with the purchase.
A qualified inspector will know what to look for and will see through any cosmetic improvements
covering up faults that may be missed by the untrained eye. The inspector will provide a written
report listing faults in the property, whether they can be repaired and how much these repairs are
likely to cost.
You may be able to use this report to negotiate the price and conditions in the contract with the vendor.


 Buyers tip: the fee for a professional inspection service is small compared with the
 cost of buying a property requiring extensive unforseen repairs. even if major faults
 are not found, you can use minor faults discovered in the pre-purchase inspection as
 the basis of an ongoing maintenance program if you decide to buy the property.




pg 38                                                                  www.realestateVieW.com.au
                                                          Ultimate FiRSt home BUyeRS GUide:
                                                                                      May 2011, First Edition




things to Consider at Settlement



Exchanging Contracts
Exchanging contracts is one of the main components of buying a property. Neither you nor the seller
is legally bound to go ahead with the sale until a written contract is exchanged.
Two identical copies of the contract of sale are prepared, one for the purchaser and one for the
vendor. Each party must sign their own copy of the contract of sale, and then they are exchanged.
The time between the exchange of contract and settlement can be anything between 30 to 125 days;
however this can change or be negotiated with the vendor.


Before Settlement:
> Arrange the balance of the purchase price. This means ensuring your mortgage loan has been
  approved by the bank so you have sufficient funds at settlement.
> Ensure that your solicitor/conveyancer has prepared all the documentation that will be required to
  complete the purchase on the day of settlement.
> Ensure your solicitor/conveyancer has contacted the vendor’s legal representative to arrange the
  date, place and time of settlement.
> Ensure your solicitor/conveyancer contacts you prior to settlement with the exact date, time of
  settlement and the amount of funds that you are required to provide.
> It is also important to make sure the property is insured before settlement because some lenders
  may not lend you money unless the building is insured and evidence of insurance prior to settlement
  is provided.

At Settlement:
> Ensure your solicitor/conveyancer has paid the balance of the purchase price at the time and place
  specified prior to settlement.

After Settlement:
> After settlement, the vendor’s solicitor will contact the real estate agent that sold you the property
  and instruct them to release the keys of the property to you. This normally occurs after settlement
  on the same day.
> Your solicitor will contact you to confirm settlement has taken place. They will also send you a
  Statement of Adjustment to show you how the funds have been paid to all parties.




pg 39                                                                   www.realestateVieW.com.au
                                                                 Ultimate home BUyeRS GUide:
                                                                                      May 2011, First Edition




moving Checklist



things to do when moving in
Moving into a home is a difficult, exhausting and tedious task. Below is a helpful
checklist you can use to ensure you complete all of the necessary tasks during
your move.


6-8 weeks before moving:
   Plan your moving transportation (truck rental, hiring movers, friends, etc.).
   Create a folder to keep a record of everything related to your move (receipts, inventory, etc.).
   Include any estimates you may have acquired:
        Removalists             Truck Hire                 Cleaning Services

   Confirm with the agent when you can pick up with keys. This will determine your moving day.

   If you are hiring removalists, get estimates from different movers to help compare prices.

   Research storage facilities if needed.

   Redirect your mail and fill out a Change of Address form at a post office or online.

   Plan how you will move vehicles, plants, pets and valuables.

   Design and pre-plan your space. Try to establish the exact purpose of every room;
   this will enable you to pack boxes accordingly – you can use a floor plan or sketch.

   Hold a garage sale, donate, sell, or throw out unnecessary items.

   Acquire packing materials:
        Boxes                   Tape/tape gun              Newspapers/bubble wrap
        Labels                  Markers
   Pre-plan and schedule repairs to be done that you have committed to making.

   Return borrowed or rented items.

   Contact the local council to arrange a rubbish pick up if you are getting rid of a lot of stuff.



2-4 weeks before moving:
   Finalise moving transportation and make necessary arrangements (i.e. helpers) .

   Schedule disconnection / connection of utilities at old and new home:
        Phone                   Internet                   Cable                        Water
        Garbage                 Gas                        Electric

   Discontinue any delivery services, automated payment plans and local memberships (i.e. gym).

   Change your contact details with various service providers (banks, licence , insurance, lawyer, etc.).




pg 40                                                                   www.realestateVieW.com.au
                                                               Ultimate home BUyeRS GUide:
                                                                                    May 2011, First Edition




moving Checklist



   If you have a pet you must change/update its registration with your council.

   Organise contents insurance if you don’t already have any.

   Create an inventory list of items (furniture, boxes etc) to use as a check list on moving day.

   Begin packing non-essential items.

   Label boxes by room and contents (bathroom, kitchen, laundry, etc.).

   Identify valuable items to transfer separately – label as DO NOT MOVE.

   Create an essentials box to keep with you on the day of your move and the first couple
   of days of moving so you don’t have to search through and open all of the boxes.

   Store valuable items like jewellery and legal documents at the bank /
   or in a safe place while moving.

   Confirm the time of settlement with your Lawyer/Conveyancer if buying.

   Contact a cleaning service, if you are using one, to ensure they are available on moving day.

additional tips if you are renting:
   Formally notify your landlord or property manager of the date you’re vacating the premises.

   When moving out of a rental property, you may need to steam clean your carpet,
   and ensure the property is returned in a satisfactory state.

   Arrange for a property inspection to recoup the bond.




1-2 weeks before moving:
   Continue packing and clean as you go.

   Call and confirm all details with the moving company if you are using one.

   Arrange for a lock smith to change the locks on moving day.

   Arrange time off work if possible for moving day.

   Disassemble non – essential furniture (desks, shelves, etc.) and wrap it to minimise damage.

   Try to use up perishable food.

   Contact your council about practical things like rubbish collection day.




pg 41                                                                 www.realestateVieW.com.au
                                                                    Ultimate home BUyeRS GUide:
                                                                                          May 2011, First Edition




moving Checklist



1-4 days before moving:
   Make a schedule or action plan for the day of the move.

   Plan when/how to pick up the truck (if rented).

   Defrost the freezer and clean the fridge.

   Drain fuel from lawn mowers and discard any hazardous or flammable substances which could
   prove dangerous during the moving process.

   Make sure essential tools are handy (screwdrivers, tape, padlock if renting a truck, vacuum cleaner, etc.).

   Pack a bag for water bottles, pen/paper, snacks, documents, and essentials.

   Set aside boxes/items that you have decided to move yourself.



moving day:
at your old home:
   Remove bedding and disassemble beds – be sure to pack bedding in your essential items box.

   Take movers/helpers through the house to inform them of what to do.

   Check off all furniture and boxes against your inventory list as they go into the moving truck.

   Complete one last check of the old property to ensure nothing was left behind ( i.e.) look behind
   doors and in cupboards, etc.

   Leave your contact information for new residents to forward mail.

   Make sure the movers have the correct new address and you have their mobile number to
   contact them if there is a confusion.

   Carry all important items with you (passports, cash, other important documents, etc.).

   Lock the windows, doors and turn off the lights.

   Return keys if applicable.

at your new home:
   Verify utilities are working:
        Phone                      Internet                  Water
        Gas                        Electricity               Heating & Cooling

   Clean the kitchen and vacuum as needed (especially where furniture will be going).

   Direct movers/helpers where to put things.

   Change the locks.

   Assemble beds and make up beds as soon as possible.

   Begin unpacking – start with the kitchen and bathroom and other essentials.


pg 42                                                                      www.realestateVieW.com.au
                                                    Ultimate home BUyeRS GUide:
                                                                    May 2011, First Edition




moving Checklist



ChaNGe oF addReSS CheCKliSt
Use the following checklist to help you keep track of who you have provided your
new details to.

 Financial             Company   account        Reference      Contact            done
                       Name      Number         Number         Number

 Home Insurance

 Building Insurance

 Bank 1

 Bank 2

 Bank 3

 Rental / Hire
 Purchase

 Health Policy

 Employer - Payroll

 Other


 Services              Company   account        Reference      Contact            done
                       Name      Number         Number         Number

 Telephone Land Line

 Mobile

 Internet

 Cable

 Water

 Gas

 Electricity

 Electoral Roll

 Garbage

 Mail Redirection

 Other




pg 43                                                    www.realestateVieW.com.au
                                              Ultimate home BUyeRS GUide:
                                                             May 2011, First Edition




moving Checklist



 health                Company   account   Reference    Contact            done
                       Name      Number    Number       Number

 Private Health
 Insurance

 Medicare

 Doctor

 Dentist

 Other


 others                Company   account   Reference    Contact            done
                       Name      Number    Number       Number

 School / University

 Newspaper

 Gym Membership

 Pet Registration -
 Council

 Other


 miscellaneous                                                             done




 Notes




pg 44                                              www.realestateVieW.com.au
                                                            Ultimate FiRSt home BUyeRS GUide:
                                                                                        May 2011, First Edition




Glossary


> agent (Real estate): A licensed and fully trained individual who aids in the process of selling a
  property.
> auction: The public sale of property where the highest bidder is normally the successful buyer.
> Building inspection: An inspection generally carried out prior to the purchase of a property
  to ensure the building is structurally sound. Contracts of sale can be made to subject to the
  satisfactory building inspection.
> Building insurance: Insurance taken out by the owner of the property to insure the property
  against risks such as fire, landslip etc. The responsibility to insure the property often passes to the
  buyer on exchange of contracts.
> Comparison rate: The Comparison Rate provides an indicative interest rate that takes into account
  certain costs associated with setting up a loan.
> Contents insurance: Insurance that covers the material possessions within your home, for
  example, electrical goods such as Plasma TVs and stereo systems, furniture, curtains and carpets.
  Certain items, such as expensive computers, may need additional insurance.
> Conveyancing: The legal process for the transfer of ownership of real estate.
> Cooling off Period: A length of time in which the two sides to a purchase agreement, or contract,
  can think things over and cancel. The length of time may vary between each state or territory.
> expression of interest: An expression of interest is like a private sale / treaty, however a formal
  offer must be submitted for the property by a specific date.
> mortgage Protection insurance: This type of insurance is taken out by a borrower to cover the
  borrower’s loan repayments in the event that they are not able to meet them through specific events
  such as serious illness or redundancy.
> Passed in: A property is ‘passed in’ at auction if the highest bid fails to meet the reserve price set by
  the seller.
> Private Sale/treaty: A method of sale which has no specified closing date and is usually
  negotiated between a buyer and seller with the assistance of an agent.
> Reserve Price: At an auction, this is the minimum price acceptable to the seller of the property.
> Settlement of the Property: Settlement of a property is when the balance of the purchase price is
  paid to the seller. The buyer receives the keys and becomes the owner of the property.
> Settlement of the loan: Settlement of the loan happens with the settlement of a property
  purchase. It’s when the buyer’s lender transfers the borrowed funds to the seller or the seller’s
  mortgage holder.
> Stamp duty: A State Government tax based on the purchase price of the property. Each state and
  territory has different set of rules and calculations.
> Strata Property: The Conveyancing (Strata) Act 1961 was introduced to enable the subdivision
  of lots into strata and the transfer of these titles. This allowed owners to split a piece of land and
  receive their title deed to a unit.
> tender: A tender is a very formal sales process, which requires potential buyers to submit a
  proposal in response to the request to owner’s advertised tender.
> Valuation: A professional opinion of a property’s value.




pg 45                                                                     www.realestateVieW.com.au

				
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