First home buyers' checklist by deafeningbuzz


									  Consumer Affairs Victoria
  Real Estate Factsheet

  First home buyers’ checklist
  October 2007
 Buying your first home could be one of the biggest financial transactions
 you will ever undertake.
 This checklist is designed to guide you through the steps involved.
                          Financing your home                        • Lodge your First Home Owners
   Quick tip              • Establish your budget and savings
                                                                       Grant application if you are eligible.
   Use home loan and                                                   Contact the State Revenue Office
                            plan. Analyse your spending habits –       for information. Go to
   stamp duty               knowing how much you spend each
   calculators on                                             Some lenders
                            week is essential in determining how       will lodge this application for you.
   websites run by
   lenders, real estate     much you can afford to borrow.
   agents and the
   State Revenue
                          • Include the extra costs of buying a      Finding your home
                            home when planning your purchase.
   Office.                  Lenders’ fees, inspection costs, stamp   Property research
                            duty, insurance, legal fees, moving      • Make a list of the essential features
                            costs, estate agent fees, body             you must have in a property, as well
   Quick tip                corporate fees and council rates can       as a ‘wish list’ of desired but non-
   A buyer’s advocate       add thousands to the cost of a new         essential items.
   can source
                            home. You may also need extra for        • Determine your preferred suburbs
   properties and
   negotiate on your        home improvements or renovations.          according to your price and location
   behalf for a fee,      • Determine how much your deposit            requirements. School zoning may
   usually based on a       will be. Be aware that you will be         also be a consideration when
   percentage of the        required to pay mortgage insurance if      choosing a suburb.
   purchase price.          you are borrowing more than 80 per
   Check that he or                                                  • Take your time. Don’t hurry into
                            cent of the purchase price.                buying before you have thoroughly
   she is a licensed
   estate agent.          • Speak with mortgage brokers and            researched the market.
                            lending institutions to determine        • Research recent sales in your
                            how much you can borrow. Take your         preferred suburbs. Talk to agents, and
   Environmental            future family planning considerations      analyse recent sales and prices.
   tips                     into account when you calculate your       Attend as many auctions and open
   • Check the              borrowings to ensure repayments can        inspections as possible to familiarise
     property has           be met on one income if applicable.        yourself with the market and selling
     adequate               You may need to reassess your              processes. This will enable you to get
     insulation and         spending patterns to ensure you can        a feel for the prices properties are
     make provisions        service the loan.                          selling for and, if necessary, refine
     in your budget to
                          • Shop around and compare loan types         your suburb choices.
     improve the
     insulation if          and lending institutions to ensure       • Appoint a solicitor or conveyancer to
     necessary.             you get the loan that is best for you.     undertake your conveyancing work.
                            Determine whether a fixed or variable      Know the difference between using a
   • Visit
                            rate loan best suits your needs, and       conveyancer and legal practitioner.
     www.ourwater.vic. for advice      whether you would prefer fortnightly       Go to
     on what you can        or monthly repayments. Also, find
     do to make your        out if additional repayments are
     home as water          possible.
     efficient as
                          • Gain pre-approval from your chosen
                            lender before making an offer or
                            participating in an auction.
1300 55 81 81
Real Estate Factsheet

Date of Issue:
                            Buying a unit or apartment                     • Don’t sign any agreement until you’re
October 2007                                                                 ready. Get legal advice before you sign
                            • Research the facts about the particular
                              rights and responsibilities that relate to     a building contract.
  Environmental               owning a unit or apartment. Go to            • Use an independent building
  tips                                     consultant to help you check aspects
  • Use a design that       • Consider the extra expenses involved           of the project or carry out your
    maximises north-                                                         contract administration. Depending
                              with owning a unit or apartment.
    south ventilation                                                        on the scope and cost of this work,
                              Expenses can include annual owners’
    flow to cool your                                                        your building consultant may need to
    house during              corporation fees to cover the costs of
                              management, security, cleaning,                be registered.
    summer, rather
    than relying on           repairs and gardens, as well as fees and     • Choose your own building surveyor –
    air-conditioning.         levies for administrative expenses.            you will be more confident that he or
  • Use eco-friendly        • Consider possible restrictions to              she will perform independent
    products and              parking, noise, traffic and pets. You          inspections to ensure your building
    materials where           will also need to deal with close              complies with building regulations.
    possible.                 neighbours, whether they are owners            Remember: your building surveyor
                              or tenants.                                    does not check that contractual
  • When furnishing
                                                                             requirements have been met.
    your home, buy
    appliances and          Building a new home                            • Remember that a domestic building
    products that are                                                        contract has a fixed price. After
                            • If you decide to a build a new home
    energy efficient.                                                        signing the contract, the price can be
    Sustainability            after seeing a display home, remember
                              the builder must generally produce the         varied by you or the builder, but only
    Victoria provides
                              same quality house.                            as permitted by the Domestic Building
    advice on rebates
                                                                             Contracts Act 1995.
    and products            • Ensure you have detailed plans and
    designed to make                                                       • Only pay the deposit and stage
                              specifications that suit your budget
    your home more                                                           payments according to percentages of
                              and your land, and comply with the
    energy efficient.                                                        the total contract price set out in the
    Go to                     relevant regulations.
                                                                             Domestic Building Contracts Act 1995.
    www.sustainability.     • Ensure your house complies with the               mandatory energy rating system in            • Don’t pay for a stage before it is
                              Victoria. To find out the requirements,        complete. Ensure the works have
  • Make your new
                              visit and        passed your building surveyor’s
    home as water
    efficient as     You             inspection and you have thoroughly
    possible. Visit           can choose to go beyond the                    checked that the builder has met all
    www.ourwater.vic.         minimum required standard of energy            contractual requirements.                   rating when including features,              • Act immediately if things go wrong.
  • Avoid blocks that         materials and systems that conserve            Communicate with your builder, get
    are overshadowed          energy and water, and minimise waste.          agreements in writing and if you can’t
    in winter by                                                             resolve the issue, contact Building
                            • Choose a registered builder with
    buildings, big                                                           Advice and Conciliation Victoria on
    trees, fences or          builders’ warranty insurance. Contact
                              the Building Practitioners’ Board or           1300 55 75 59.
    other obstructions
    to the north. A           Consumer Affairs Victoria for details.
    block that allows
    you to site your
    home facing north
    means that you
    get best access to
    the sun.

                          Page 2 of 4
Real Estate Factsheet

Date of Issue:
October 2007              Making an offer –                               • Provide a copy of the contract of sale to
                                                                            your solicitor or conveyancer so they
                          private sale                                      can check for special conditions or
                          • If you are interested in a property, spend      caveats. (This may negate your right to
  Quick tip                 time in the area at different times of the      cool-off.)
  • Be aware that the       day and night to check for noise,
                                                                          • The offer is binding when both you and
    seller’s verbal         parking and traffic. You could also check
                                                                            the seller have signed the contract note
    acceptance of an        with the local council for any proposed
                                                                            or contract of sale and all conditions are
    offer does not          building or developments in the area.
    mean that the
                          • Obtain a copy of the vendor’s statement
    property is sold to                                                   • Check that all measurements and
                            (section 32) and read it carefully. This
    you. There will                                                         boundaries of the land correspond with
                            statement contains information about
    always be a risk                                                        those on the title. Your solicitor or
                            the property’s title, easements, zonings
    that another keen                                                       conveyancer will send a plan of the land
                            and outgoings. It is a good idea to have
    buyer will make a                                                       to you.
                            the vendor’s statement checked by your
    higher offer or                                                       • Pay your deposit to the estate agent. The
                            solicitor or conveyancer prior to
    propose more                                                            deposit is held by the agent in a trust
    favourable terms                                                        account until the settlement date.
    of sale. Until your   • Make a realistic offer to the agent based
    offer has been          on your understanding of the value of
                            the property. Be careful that your offer is
                                                                          Buying at auction
    accepted in
    writing, the seller     not too low – if another keen buyer           • Attend as many auctions as possible to
    has the option to       makes a higher offer, the seller may            learn how the process works. This will
    accept an offer         accept the offer and enter into a               also help you find out what prices
    from another            contract with the other buyer.                  properties actually sell for compared
    buyer.                                                                  with the advertised prices.
                          • Consider making a conditional offer,
                            subject to certain conditions, such as        • Check newspapers and online
                            obtaining finance, the sale of an existing      advertisements to see whether the
  Quick tip                 property or building and pest                   advertised price for a property you are
  Be aware that the         inspections.                                    interested in has changed closer to the
  seller is not                                                             auction date.
                          • Make sure you know which fixtures and
  generally compelled       chattels are included in the sale and         • Ask the agent what price the property is
  to sell to any            check that they have been listed in the         expected to sell for. Also ask for
  specific person and       contract.                                       comparable sales data the agent has
  can change his or                                                         used to establish the estimated selling
                          • Do not sign anything until you have
  her mind at any                                                           price of the property.
                            read it carefully and understood the
  time before signing
                            content of the document.                      • As the property is being sold at auction
  the contract. A
                                                                            and will sell to the highest bidder, think
  seller may not          • Know your rights with regard to
                                                                            carefully about spending money on
  necessarily sell to       ‘cooling-off’ periods.
                                                                            services such as building inspections
  the person who
                          • Insert in the contract a date by which          before the auction day.
  makes the highest
                            your offer will lapse. Then you will
  offer.                                                                  • Be clear about your bidding limit and
                            know whether your offer has been
                                                                            bid confidently.
                            accepted within the specified timeframe
                            and you will be free to make offers on        • If you are the highest bidder at the fall
                            other properties.                               of the hammer, you will be required to
                                                                            sign the contract and pay the deposit
                                                                            specified in the contract. There is no
                                                                            cooling-off period at an auction.

                             Page 3 of 4
Real Estate Factsheet

Date of Issue:
October 2007      After the sale                                   More information
                  • Advise your lender that your offer has
                    been accepted, and finalise your loan          Estate Agents Resolution
                                                                   Service (EARS):
                  • Organise building and contents                 Consumer Affairs Victoria
                    insurance, effective from the date of          Victorian Consumer &
                    signing the contract. Lenders will             Business Centre
                    generally require this to safeguard their      113 Exhibition Street
                    interest as mortgagee.                         PO Box 123, Melbourne 3001
                                                                   Melbourne 3000
                  • Change your address with necessary             Telephone: 1300 55 81 81
                    organisations; organise electricity, gas,      for buyers: 1300 73 70 30
                    telephone and internet connections;            for building: 1300 55 75 59
                    and book a removalist for your move in         Website
                    date.                                          Email:
                  • Organise a pre-settlement inspection
                    one week before settlement to ensure           Law Institute of Victoria
                    that the property is in good condition.
                    The seller has an obligation to hand
                    over the property in the same condition        The Land Channel
                    as it was when it was sold.          

                  Further reading                                  Real Estate Institute of Victoria
                  • Real Estate: A guide for buyers and sellers
                  • Building & Renovating Quick Tips
                  • Conveyancing factsheet

                  The information contained in this fact sheet is of a general nature only and should not be
                  regarded as a substitute for a reference to the legislation or professional advice.
                  Authorised by the Victorian Government, 121 Exhibition Street, Melbourne, Victoria, 3000.

                     Page 4 of 4

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