Buying your first property can feel like an overwhelming task. A tad daunting. Like you’re in deep water. Out of your depth. There are many obstacles to overcome to reach your goal of home ownership. Competition. Inexperience. Sharks. Rips. The feeling like you just got sand in the crack. You get the drift.
Where do I start? What do I ask? What do I offer? How do I put this all together?
Just like being in the ocean, the last thing you want to find yourself doing in a property purchase is thrashing about in panic.
Our clients refer to Step Up Property as lifesavers. Mission? To assist them safely to shore. To help them successfully and confidently manoeuvre their way through the buying maze of waves. If you’re considering dipping your toes in the property pool, we’ve thrown a life buoy out here. Advice on what’s important to keep your head above water. Tread on.
What makes up an offer and how should I submit it?
OFFER – When you find ‘the one’, it is recommended that you make an offer within the advertised range. Do your homework. Know the local market. Choose an amount that you will be comfortable to pay for the property. An amount that you are willing but not anxious to pay. Be ready to negotiate. Set yourself a ‘walk away’ or in this case, ‘swim away’ price and stick to it. Leave your emotions on the beach.
DEPOSIT – Ensure you have a minimum 10% of purchase price available to put down as a deposit. This is the usual amount you’ll be expected to be pay within a contract. Once negotiations are complete, you will most likely be asked to pay the deposit into the real estate agent’s treasure chest, ahh trust account. ie. A purchase price of $290,000 will require a deposit of $29,000.
CONDITIONS – subject to finance, within 14 days. You need to establish what your conditions are for the purchase. In the event that you are obtaining finance to purchase, you will need to make your offer ‘subject to finance’. This condition will protect you in the event that you are not able to obtain the finance. Or in other words, when ‘X’ doesn’t mark the spot. Pre approval on your finance however, gives you confidence that you’ve qualified the lending institution’s criteria and you know what you can afford to spend. Take our advice, get pre approved finance when you first decide property ownership is for you. Got coins?
CONDITIONS – subject to pest and/or building inspection, within 14 days. For the sake of a few hundred dollars, eliminate risk. Engage registered and qualified contractors to walk the property planks and scrutinise through their spyglass, that the property is all ship shape. Be on the lookout for termites, water leaks and major structural defects. If found unsatisfactory, these conditions will protect you from buying a shipwreck of a property. Polly doesn’t want a cracker.
UNCONDITIONAL – like the perfect smooth sailing day. There’ll be no capsizing this type of property purchase. It will forge ahead until settlement day, just like a sale at auction, unhindered.
SETTLEMENT – How many days you wish to settle in. Commonly aim to set sail in 30, 45, 60, or 90 days time. May or may not be an integral part of your offer. Dependant on each party’s circumstances.
IN WRITING – I hope that someone gets my message in the bottle. We recommend submitting your offer to purchase in writing. Perhaps not so much sealed with a cork but sealed by email. Consider an expiry date and time on your offer. Maintain momentum.
A recently thrown ‘post negotiation’ life buoy.
Congratulations again! Very exciting for you to acquire your own place!
As per our discussion today, I provide you the following.
As part of the conditions of your accepted offer you will need to organise the following within 14 days of signing the contracts.
Building Inspection – you can use anyone you like. I personally use and recommend Building Inspector – *******
Pest Inspection – you can use anyone you like. I personally use and recommend Pest Inspector – *******
Finance – advise your bank/broker asap of purchase so that they may organise your finance.
Deposit of 10% – $29,000. Upon signing contracts, you can pay this via transfer direct into Step Up Property Trust Account. Account name: Step Up Property. BSB: ******. Account: ********. Please use either your name or your mobile number as the reference and advise me once paid.