The process of purchasing property
If this is your first step onto the property ladder, it is imperative that you gain an understanding of the process of purchasing property. For all others, it’s still important!
Here is a general description of the stages of a property purchase and reading through this may help you ask the right questions of your legal advisor, real estate agent or even your Multi-Choice Home Loan expert.
Before continuing, the most important point to note is that you should always seek professional advice before committing yourself to a legal contract.
Overview of a standard REIQ contract from signing to settlement.
Before shopping for your new home, let a Multi-Choice Mortgage Broker get your loan pre-approved. This will give you confidence when out shopping for your home and possibly even make you a little cheeky in your negotiation with the agent! You’ll be thanking us for the help when it works and you’ve saved big dollars.
Once you have a pre-approved loan in place you can start shopping, but before signing the actual purchase contract please see your solicitor to make sure that the terms of the contract are correct. Please note that conveyancing detail differs between the states.
Stage I – Get your Loan Pre-approved
Prior to house hunting it is advisable to make application via a Multi-Choice broker secure a pre-approval for you with the lender of your choice, selected from over 25 lenders on our panel. The mortgage broker will help you choose the right loan for your particular circumstances by utilising sophisticated software. You can either have your loan approved for a specific sum or alternatively a maximum lend. Don’t forget that the maximum loan offered by lenders differs vastly from one bank to another. A Multi-Choice mortgage broker will very simply show you maximum limits offered by different lenders so please contact us today to put yourself in a strong position for your property purchase. A pre-approved loan won’t cost you a cent and you will get the benefit of some personal help from us with regards to the process of making an offer on a property.
Stage II – A Conditional Contract
Once you have signed the property purchase contract please email a copy of the contract to your Multi-Choice mortgage broker ASAP. This way there will be no time wasted in ordering bank valuations, if required, which can sometimes take up to five working days if the valuer is delayed. Waiting on unconditional finance approval with the deadline looming is no fun for anyone!
Please note that a pre-approval certificate is still no absolute guarantee! The property will have conditions such as the purchase property being deemed suitable as security for the loan (which is normally not an issue if the property is in a major metropolitan area). In other words the lender has to be happy with the house or unit you are purchasing.
The contract as depicted is conditional upon a 14 day finance clause and a 7 day building and pest inspection clause. This means that you need to have those conditions met to your satisfaction, or as stated by your contract, prior to letting the vendor know that all is fine and you will proceed with the purchase. Please be sure to refer to your solicitor and also ensure that you communicate with your solicitor. Don’t forget to arrange an insurance cover note on the property being purchased from the moment it is accepted by the vendor.
Stage III – An Unconditional Contract
Once you have met all your conditions of purchase you can then proceed to stage 3, the “point of no return”. ie the point at which the contract is unconditional. At that point the vendor usually will expect a large enough deposit that clearly evidences your intention to settle. Should you fail to settle as per the contract terms, you will be in breach of contract and the vendor could expect you to forfeit your deposit – in other words the deposit is “hurt money”. The vendor is also entitled to pursue it further in a court of law. Therefore, make certain you communicate with your solicitor through this process and also with your Multi-Choice mortgage broker.
To summarise, do not go unconditional on the contract until you are absolutely certain that the finance is in place. The bank must have articulated their intension to lend you sufficient money for you to purchase the property and you must see this in writing before you give the go-ahead to proceed to an unconditional status on the contract.
Speak to a broker today
Having a Multi Choice broker negotiate finance on your behalf is the smart way to go as we look to save you time, stress and money.Book a free appointment