Purchasing a House in New South Wales: An Informative Guide
Acquiring a Residence in New South Wales (NSW) might appear overwhelming, but it doesn't have to be. We walk you through the process step by step and offer valuable suggestions along the way...
What are the key stages for purchasing a house in NSW?
So you've made the decision to buy a house in NSW - congratulations! However, if this is your first home purchase, or if it has been many years since you last bought a house, or if you have previously purchased in another state, you may be feeling a bit inundated and uncertain about where to begin.
Rest assured, because MMJ Real Estate is here to assist you. We have put together this informative guide to purchasing a house in NSW, which will lead you through the process step by step.
In a nutshell - there are approximately 5 critical steps to purchasing a house in NSW:
- Arrange your finances
- Search for and examine properties
- Present an offer
- Arrange legal matters (solicitor or conveyancer)
- Negotiate contracts and place a deposit
We will elaborate on each of these steps further in the following sections.
Purchasing a House in NSW: Step 1 - Arrange your finances
Before you can buy a home, you will need to arrange your finances.
According to Corelogic's Home Value Index, in Jul 2020 the average price of a home in NSW (Sydney) was recorded as $1,122,000. Of course, most individuals don't have this kind of money readily available! Prior to embarking on your search for your dream home, it would be wise to contact various banks and lending institutions to determine your eligibility for borrowing. The Department of Fair Trading offers an outstanding article explaining the range of finance options that are available to you.
Once you know the amount you can borrow, calculate the repayments to ensure that you can comfortably make them - the borrowing amount might not necessarily align with your repayment capabilities!
This initial step is quite significant - you wouldn't want to discover a house, fall in love with it, and then realize it's beyond your price range. Even worse, you don't want to actually purchase the house and then realize that you are unable to meet the repayments.
Purchasing a House in NSW: Step 2 - Search for and inspect properties
So, now you are aware of your borrowing capacity and confident in your ability to meet the loan repayments. It's time for the enjoyable part - searching for your dream home!
Some key considerations at this stage include:
- Location: Obviously, if you are reading this article, you are interested in purchasing a house in NSW. However, NSW is a large state - do you have any specific regions or suburbs in mind?
- What type of property do I want to purchase? House, apartment, townhouse, unit - there are various options.
- How many bedrooms, bathrooms, and parking spaces do I require?
Once you have an idea of the type of home you are seeking and the area in which you want to reside, enter this information along with your price criteria into a real estate listing website.
Search real estate listings with MMJ Real Estate or sign up for the Property Alerts eService and have listings delivered directly to your email inbox. MMJ also allows you to bookmark properties you are interested in viewing through our add to shortlist feature, which is a convenient option when contacting agents or sharing information with others. Moreover, you can give us a call or email us to discuss your property needs - our team is here to assist you. Once you have your shortlist, simply contact the listing agent via email or phone to schedule your inspection.
It’s exceptionally important prior to purchasing a house in NSW, that you examine it. This allows you to eliminate any major problems, ensure the property meets your criteria, and that you adore it! Another option available to you is to arrange for a building inspection report which is a building inspection conducted by a professional who is trained to evaluate the condition of the property.
Buying a House in NSW: Step 3 - Presenting an offerSo you’ve conducted your research, looked through dozens of properties and you’ve found the one. This is truly a thrilling time! But the third step in the process - putting in an offer for the property you adore - can be intimidating. Let’s examine what’s involved and how you can make this less stressful.
When you decide to place an offer on a property, you need to request the agent to provide you with a copy of the sale contract for that property. This contract is a legal document which formally identifies the property being sold and will include a number of significant documents related to the property. You should pass this contract on to your conveyancer or solicitor for them to review and ensure there are no major problems or important items missing which would prevent you from purchasing the property.
Once your conveyancer or solicitor informs you that the contract of sale is in order, it’s time to actually ‘make the offer’. When purchasing a house in NSW, it is acceptable to submit either a verbal or written offer. Many agents will also request a deposit to be placed at this time. This deposit does not guarantee that the property will be sold to you, and you are also not under obligation to buy the property at this stage. If the contract does not proceed, you will be refunded the deposit.
It’s quite possible that other offers will be submitted to the vendor after yours and if this is the case, the agent will keep you informed. This can be a tense time as you await to hear if your offer has been accepted. However, if your offer is accepted, it’s time to exchange contracts with the seller.
Buying a House in NSW: Step 4 - Arrange legalitiesFantastic news - your offer has been accepted! You are one step closer to realizing your dream of purchasing a house in NSW!
The fourth step is quite a formal process as legal documents need to be exchanged and signed in order to complete a property purchase. It is absolutely recommended that you engage a conveyancer or a solicitor who specializes in property law to assist you at this stage. When selecting a conveyancer, you should ensure they are licensed with NSW Fair Trading - this is a requirement by law. In addition to this, both conveyancers and solicitors should hold professional indemnity insurance which will protect you should any mistakes be made during the process.
Whether you engage a conveyancer or solicitor when you are buying a house in NSW, they should perform the following key tasks:
- Evaluate and assess the sales contract
- Exchange the sale contract with the seller’s legal representative
- Arrange payments such as deposit and stamp duties
- Prepare the mortgage agreement
- Evaluate any payments owing on the property
- Arrange change of title
- Represent you during settlement
Buying a House in NSW: Step 5 - Negotiate contracts and place a depositNow that you have engaged a conveyancer or a solicitor who specializes in property law - these professionals will act on your behalf during the contract negotiation process.
When purchasing a house in NSW, the exchange of contracts is what legally completes the purchase process. Both you and the vendor (seller) will receive a copy of the sale contract and you will need to sign your copy before these are then exchanged.
Your conveyancer or attorney will arrange this and at this juncture you will also be obliged to make a down payment for the real estate. The down payment typically amounts to 10% of the agreed upon buying price, although both parties can mutually decide on an alternative sum that should be clearly stated in the contractual agreement.
A five day grace period after agreement is customary when purchasing a house in NSW. This duration permits a buyer to retract from the contract with written notice. If you do withdraw from the contract during this period, you will need to pay the seller 0.25% of the agreed purchase price.
Following the exchange of contracts, you will then have approximately 6 weeks (this timeframe can vary from 4 - 8 weeks) until the finalization. This interval is typically utilized to complete your payment on the property and for your conveyancer/solicitor to prepare legal documents in anticipation of the settlement day.
Your conveyancer/solicitor will meet with the seller's legal representative and representatives from both parties' banks on the settlement day to exchange cheques and formally transfer the property to you. And once this process is completed.... the property officially becomes yours! Congratulations, you are now a homeowner!
And there you have it - MMJ Real Estate’s manual to purchasing a house in NSW. We trust this has been beneficial in clarifying the procedure and making you feel more knowledgeable when it comes to purchasing your ideal property. If you have any inquiries, feel free to get in touch with us as we are here to assist.
If you are prepared to commence the search for properties in NSW,Why not explore our properties available for sale in NSW.
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