Buyer Information                                                                                                                                           Return to Top
We at DIY have put together this guide to assist buyers avoid the pitfalls that are involved in the purchase of a home. It must be remembered that this should be used as a guide only as there are still some legal matters that should be discussed with your solicitor or conveyancer.
By following this guide, we will step you through the process of buying a property and help in avoiding any problems that may otherwise crop up.

Dos and Don'ts                                                                                                                                                Return to Top
The best way to prepare to own a home is to educate you about the home buying process. Read the real estate sections of your local newspapers and property magazines. Determine what you want and need in a new house and make a list of priorities. Ask lots of questions of the seller and the real estate agent. If you think you are not receiving the answers that you want seek professional advice.
Do:
♦   Remember that the real estate agent you are dealing with is being paid by the seller and will have the seller's best interests as his or her professional goal.
♦   Project future needs. As children become older and move out your requirements will change.
♦   Walk the property boundaries looking for encroachments on the site.
♦   Review the section 32 thoroughly and then have them checked by a solicitor or conveyancer.
♦   Purchase home insurance once your offer has been accepted.
♦   Document all discussions.
♦   Save all you can for settlement costs and a down payment. Many lenders will not consider an application for finance without some evidence of a savings history and at least 10% of the purchase price as a deposit.
♦   Revisit your "wish list" and reconsider everything on it.
♦   Find out what you can realistically afford and consider buying a starter home that requires a smaller down payment with the idea of moving up in a few years.
♦   Look into whether you can apply for a First Home Buyer's Grant offered by the government.
♦   Some states also have local programs for low and moderate income families or first-time buyers, offering lower interest rates or down payments. These vary from state to state and last for limited periods of time.
♦   Check with parents and relatives for monetary gifts that can go toward a down payment or settlement costs.
♦   A 20% down payment can dramatically cut monthly costs and eliminate mortgage insurance premiums.
Don't:
♦   Accept as absolute truth statements by the seller or the agent.
♦   Make verbal agreements.
♦   Look for a home without financing pre-approval.
♦   Make your moving schedule too tight.
♦   Buy the biggest home in the neighborhood - it's usually the hardest to sell.
♦   Purchase without a quality home inspection. 

Negotiation Rules                                                                                                                                          Return to Top
Remember the simple things                                                                                    
♦   Keep the calculator handy. Both the buyer and seller should tally up the value of items under negotiation.
♦   Keep in mind the price and determine how it compares to the recent market action. You as the buyer should have evidence of the market prices and how well those prices compare to what you have offered.
♦   Who has the advantage in the negotiations all depends on who has control of the market. It is vitally important that you become familiar with this concept if you are doing your own bidding. If the buyers are in control push hard to win your points against a seller in a weak position. If the sellers are in control you had better not ask for too many concessions as the negotiations will quickly be broken off so they can deal exclusively with a less demanding buyer.
♦   If things become too bogged down and negotiations are becoming protracted you may be able to meet the other party by putting a price on the intangible aspects of the deal. For example the seller may accept all your offer if you agree to bring forward settlement to an earlier date or defer it to a later one to suit their needs. You may also agree to accept other items such as furniture in order to boost the cash side of the transaction and thus keep the seller happy. Be keenly aware and find out as much as you can about why the seller is on the move. Knowledge is everything in negotiating an outcome on your terms!
♦   Be sure all changes to the contract are made on the original form, no matter how messy it may look. If the agreement is re-written it is the perfect time for some item to be left out and forgotten about. Even small points must all be written down. Remember if it is not written down it does not count. 

Pre-settlement inspections                                                                                                                        Return to Top
Whether you have purchased a new home fresh from the builder or you are buying a house that someone else called home one rule always applies: make a final inspection before you settle. Examine the house closely with the contract to make sure any contingencies the seller agreed to have been met. If you are buying from a builder, check if the builder has made any changes since your last meeting. Don't be shy about asking questions during the final walk through. 

Settlement                                                                                                                                                      Return to Top
Settlement is the last step in the home buying process. Settlement is where the seller receives the funds from the buyer and the buyer acquires title to prime residential real estate, then the banker holds the title and the challenge of mortgage repayments become a monthly reality!
While everyone does their very best to meet the settlement date, it is important to remember that many things can crop up to delay the settlement and delays are commonplace.
Settlement delays are often caused by titles being misplaced, bank valuations being too low, pre settlement inspections not being approved or financial or personal difficulty.
Some of the fees associated with settlement include:
♦   Mortgage insurance
♦   Bank fees
♦   Establishment fees
♦   Valuation fee
♦   Insurance
♦   Title registration
♦   Solicitor/conveyancer
♦   Stamp duty 

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 Pre-Purchase Checklist                                                                                                                             Return to Top   
Simple tests that can reveal hidden problems
Floor joists
♦   If you see any evidence of termites seek advice from a qualified building inspector.
♦   Prod timber to test it. Termite damaged wood will give little resistance.
♦   Pay close attention to sill plates, header joists, ends of floor joists, bases of wall studs and flooring.
Windows, doors, drawers and handles
♦   Do all the doors open freely or do they get to a point and get stuck?
♦   Are all the door handles in working order?
♦   Check the locks. Do they work?
♦   Open the windows: tops down and bottoms right up! Check sashes.
♦   Do any glazing repairs need to be done?
♦   Pull out all drawers to check if they slide easily. Are they strong or of flimsy design? Are all the handles on the drawers?
♦   Cupboards: Do they all swing? Are the handles in place?
♦   Is there a security door? Look carefully at the back door as well.
Walls and ceilings
♦   Any evidence of water damage?
♦   Any brown-orange stains?
♦   Any cracks in walls?
♦   What condition is the paint in?
Floors
♦   Any loose boards?
♦   What sort of timber?
♦   Are they squeaky? Do a jump test.
♦   Are the floors level? Place a marble on the floor and see if it rolls.
Plumbing
♦   Look at the water pipes. Are they Copper or are they still old steel pipes that fill up with rust?
♦   Is the water pressure good?
♦   Any water saving devices?
♦   What is the hot water Service? Gas or electricity?
♦   Does the house have gas?
♦   Are shower roses compliant?
♦   What is the tap furniture condition? Do any taps leak?
♦   Test shower pressure, bath pressure and toilet flush.
♦   Check all garden taps. Are they in easily accessible locations and do they have good water pressure?
♦   Are hot pipes insulated?
♦   Does the plumbing look unprofessional?
Electricity
♦   Look at switchbox. Is it old or new? Is a safety switch installed?
♦   Do switches work? Do all faders work?
♦   Do the outside lights work?
Roof
♦   Any sign of leaking water?
♦   What is the state of the insulation?
♦   Are there any cracked tiles?
♦   What condition is the roof flashing in?
♦   Any rust in the gutters? Are they clean and well maintained?
Grounds
♦   Check garden taps.
♦   If you wish to install a water tank you will need at least 3 square metres.
Shed
♦   Any Storage space?
Garage
♦   Any storage space?
♦   Is the door working and well maintained?                                                                   

DISCLAIMER: This information is to be used and applied as a guide only. Please seek professional advice for more information. DIY Realty holds no responsibility for the use of information provided above.

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