Top 5 Legal Tips for Buying Your First Home
You’ve paid off all your debts, saved up your deposit and found your dream home! Now what?
Buying a house in Australia is a pretty straightforward process, but there are a few things to keep in mind to make sure your dream home doesn’t become your worst nightmare.
Make sure you speak to your bank! Find out how much you can borrow and obtain conditional approval. Finance can take time and if you are in breach of your finance clause it may give rights to the seller to claim penalty costs, or terminate the contract.
2. Finance Clause
Your bank will want to appraise your home and formally approve your loan. Your contract will have a ‘Subject to Finance’ clause enabling you to terminate the contract in the event that your finance falls through. Take care when considering your finance clause that the time periods provided for finance arrangements are sufficient.
Most contracts of sale require a 10% deposit. It is important to remember that, except in very limited circumstances, this deposit is not refundable!
4. Cooling off period
Unless you are buying at auction, your contract will have a cooling off period, allowing you a few precious days to consider your purchase. Beware though – in some states the seller is still entitled to keep a percentage of your deposit.
5. Don’t forget your searches
Building inspections, unpaid land tax, and strata reports are just a few of the searches that are necessary to ensure you are getting what you pay for. Unexpected search results are not necessarily fatal to the purchase of your home, but, if they are discovered before settlement you can ensure that associated costs are reflected in the sale price. The costs of searches can add up, but remember that unexpected surprises discovered after settlement can be significantly more expensive.
Your solicitor or conveyancer will walk you through this process and make sure your journey to home ownership is uneventful.