It’s 2022, the lockdown restrictions are finally easing up, the economy is recovering, and it’s finally time to go big on your plans for buying a new house. Property purchase will always be a huge investment. Many steps need to be checked before following through. To ensure you make the right decisions as you pass through this phase, we have prepared a checklist for buying a house.
This checklist contains multiple tasks and what paperwork is needed to buy a house. The goal is to make your house ownership dream a reality.
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1. Be prepared with a checklist for buying a house
As mentioned above, buying a home involves several activities that will require time and effort. These activities can vary from boring (filing out documents) to exciting (open houses), and as a prospective homeowner, you have to prepare yourself for the task ahead.
While preparing, some items that need quick answers include the type of house you desire (house, unit), location (city centre, suburb), etc.
Tasks such as selecting a legal representative (conveyancer/solicitor), planning for mortgage, inspection, renovations, and deposit payments are daunting tasks. Sorting out these questions alone or with your partner helps you to see the big picture and how to handle difficulties that may come your way.
So before you get underway, be prepared.
2. Plan your financing
Buying a house requires considering several scenarios from mortgage financing, deposit payment, legal costs, home inspection, and renovation. Your financing plan should also include deposit payment, mortgage plan selection, and closing costs. Planning your financing is an essential item on the checklist for buying a house.
A mortgage affordability calculator is one way of planning your financing. This method, therefore, allows you to see how your monthly mortgage payment will cope with your current financial stance. Another way is to view your credit score, as this will be useful in determining your interest rate on your mortgage.
3. Wish list, selection, and finding an agent
Be you a first-time house owner or otherwise, finding your dream home can be a fun and challenging task. You will have to put in the resources (time, energy, money) to find a property that ticks off every item on your list for the same house of your choice. This will start by going through property platforms and attending a lot of open house inspections.
Selection and housing wish lists are vital aspects of your buying a house checklist. In this criteria, some necessary items such as access to schools, type of housing (condo, townhouse), safety, ease of transportation, features such as supermarkets, stores, and recreational facilities must be considered. Extra costs such as the property owner’s association fees and property taxes will also need to be considered.
Getting a great real estate agent will help you navigate the stress of finding appropriate housing. A great real estate agent understands the local market and will help you get listings of properties that suit your desire. It is ok to interview real estate agents to make a selection or ask for recommendations from friends with a recent history of property purchase.
4. Get a mortgage pre-approval
After deciding on your home buying budget and the type of home loan that will work for you, selecting the right mortgage lender is the next logical step in the buying a house checklist. Several lenders are available to service the Australian market, and some may even offer personalised service.
In selecting a mortgage lender, you will consider their rates and mortgage origination fees. Getting a mortgage pre-approval will give you the real numbers required to prepare your housing budget. The mortgage pre-approval usually lasts between 60 and 90 days and gives you an edge over others competing for a similar property.
5. Hire a conveyancer/ solicitor
A conveyancer is a person skilled and licensed in property sales. The conveyancer is tasked with providing necessary information about the sale of a property and advising a client about a property available for sale. A conveyancer may be a solicitor or not but is required to have completed a tertiary degree in conveyancing.
You should hire a conveyancer after making a shortlist of the property you intend to purchase. The conveyancer/solicitor will handle the following tasks on your behalf;
- Prepare a contract of sale and other legal documents, e.g., a memorandum of transfer
- Provide information on the property and its title certificate
- Pay the deposit payment into a trust account
- Keep you abreast of important information regarding the property
- Calculate taxes and rates adjustment
- Help in settling final payments for the property on your behalf.
- Represent client interest to seller and representative
The conveyancer helps to kick start your legal journey to house ownership. Although the buyer can handle the tasks carried out by a conveyancer, it is safer to engage the service. Your conveyancer will consider permits, constraints, planning controls, and heritage overlays.
6. Make an offer, inspection, and appraisal
With the support of your conveyancer and real estate agent, you should be able to select appropriate housing at this point. The next item is to on our checklist for buying a house is to make an offer. If your offer is accepted, you can get your mortgage lender to make payments on your behalf.
An appraisal helps the lending company value the property. The buyer is meant to pay for the appraisal, while the mortgage lender chooses the appraiser. When your offer is accepted, inspection and appraisal are the next steps on the checklist to buying a house.
An inspection helps you assess the extent of repair works to be carried out on the property. The buyer pays for it, and the inspection results will help you negotiate the property’s final price. You can negotiate a price reduction when inspection results show repair works that the seller did not disclose.
7. Close the deal, insurance
Once you are satisfied with the property, the next point is to close the deal. Ensure your lender provides you with the closing disclosure to ensure your lending rates remain the same. In conjunction with your real estate agent, your conveyancer will do a lot to help through this process.
Closing the deal requires a lot of documentation and should be done when you are satisfied with other items on the checklist for buying a house. With this stage done, you get the keys to your new house, and it’s a big congratulations.
Additionally, it is important to carry out an insurance cover on your house. The insurance cover should take effect from the day you close the purchase deal. Most lenders make the insurance a condition for giving you a mortgage, so make sure you have one handy when applying.
Paperwork to be filled when buying a house.
As you should expect, you will fill out a lot of paperwork. Some of the paperwork to be filled out includes;
- Loan contract; this document specifies the loan agreement between you and the lender.
- The vendor’s statement (also referred to as Section 32); this document includes the Title Certificate and provides relevant information (such as zoning, building permits, and utility rates) on the property.
- The settlement statement; this document is handed out to the buyer at the contract signing. Details include – purchase price, deposit, government fees, stamp duty, and rates.
- Transfer document; it is submitted at the relevant office in your state or territory and shows that the property has changed ownership.
- The contract of sale; this document signifies that a property is officially sold, and the key is handed over to the buyer. This document contains details such as buyer and vendor’s names, settlement date, the conveyancer’s names, agents, property price, and special conditions.
Looking for your dream home?
We can also help you out in that department. Browse our search page to check out some amazing listings available right now. But don’t just stop there, download our app to get the full Soho experience. Just remember to shortlist or swipe left on our listings so we can send you others that better match what you’re looking for.