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Who do I Need to Deal With?
Buying a house means that you will need to deal with some or all of the following:
Financial advisers and brokers
You may need to seek guidance on your financial position. The bank or credit union you usually deal with will be able to provide advice from a loans officer or manager about your suitability for a housing loan. If you are in an immediate position to apply it is wise to seek other options including use of mortgage brokers or general loan advisers.
In the current lending market loan options allow you to select various features which are best for you.
Honeymoon loans have a fixed low interest rate for a set period which reverts to the current rate levels. Rate levels can be lowered if you refinance other loans with the one lender and receive a low single interest rate. The options need to be explored and explained.
Financial organisations offer internet services including advice and options available. There are independent mortgage specialists available to advise on types of mortgage loans and offer advice on fee and repayment options.
Most homes are sold through real estate agents. The agents role is to act for the owner to get the best price possible.
It is up to the buyer to be informed about the market. The agent can make you aware of what is available, but his or her role is to sell property. It is up to you to get the best deal. The Real Estate Institute of Tasmania can provide information on contacting member agencies.
Seek legal advice before entering into any agreement to list a property for sale through an agent or to buy a property through an agent. Ultimately, only you have your best interests at heart, nobody else.
The final decision to buy is the responsibility of the purchaser and the consequences of entering into a contract may be costly. It is important not to rush into a purchase. Ask to see a copy of the house description and purchase contract and be sure you understand them thoroughly before you sign. The agent can explain them to you, but should also get independent legal advice.
Auctions are a popular means of selling property. Prospective purchasers bid on the auction day. For a bid to be accepted the price must reach the level or reserve price acceptable to the seller. A sale is established on the fall of the hammer to the highest bidder.
If you are bidding at auction it is essential that you have your finance limit approved by the lender prior to auction. You should also ask for a copy of the property title and contract prior to auction. This will establish exactly what is being sold.
Vendor bidding is permitted in auctions conducted in Tasmania. This means that the auctioneer or a person in the crowd may make bids on behalf of the seller. Watch for this, because you may be the only person making genuine bids. Vendor bidding is not permitted beyond the reserve price, but, the problem is that you do not know what the reserve price is until it has been reached. Also the reserve price may be unrealistically high. Know how much you are prepared to pay and don't be tempted to go beyond.
You need to be aware of the terms of the auction because if you are the successful bidder you will be asked to provide a deposit on the auction day.
If the reserve price or owner's minimum acceptable price is not reached the property is "passed in" and the agents will enter into negotiation between owner and interested buyers.
The auctioneer, like the real estate agent, must be licensed to act as an auctioneer in Tasmania by the Property Agents Board. The role of the auctioneer is to enable the property sale through the auction process.
Building consultants, architects and builders
If you decide that a property may be worth investigating further you may ask somebody to assess the structure and possible maintenance issues. This obviously requires qualified building and engineering experience.
Consultants and architects will provide this service as will building industry bodies such as the Housing Industry Association or the Master Builders Association for a fee.
Individual builders will give you their opinions but these will not be as detailed as a specialist report.
The fees involved in building inspection could save many times the cost of building work to fix any building problems. The problems may not be obvious now but an experienced builder could pick up possible future building concerns.
Advice on maintenance issues can be obtained by talking to trade organisations, for example a member of the Master Painters Association can give quotes on painting requirements. Landscapers could assess the quality of any paved or terraced areas which are often overlooked in inspections.
A property valuer is certified and registered by the Australian Property Institute and must be a practising member of the industry.
The advantage of a property valuation is that it is independent of the sale process and it is from a qualified industry professional. The valuation is supported by relevant evidence and research by the valuer.
It is important that you are aware that an appraisal or sales opinion is very different from a formal valuation. If you are dependant or reliant on a valuation it should be a formal valuation.
The local council is responsible for property records about existing services, building approvals, and property development.
The council can introduce future planning schemes or by laws which could influence the building plans you already may have in mind. You should check council records for approvals granted for any recent additions or renovations. You may become responsible for costs if the building work is not approved.
The property records will include any detail on easement or access to the property which is important for any future planning.
The zoning of the property is important. It may be zoned residential but be close to a commercial zone. The area may also have been approved for subdivision. This will effect how close you are to other houses.
If you have purchased an older property there may be restrictions on building for heritage reasons which will limit renovations to certain styles that fit the building era.
The council also has records of any landslip activity in the area. You could also contact an organisations who specialises in landslip and mines searches. For example, Tasmania Property Search.
The council is able to inform a buyer of council fees and charges, and relevant regulations such as the building code and general building requirements.
For information on contacting your local Council, view the Tasmanian Local Government Directory.
Insurance is advisable because you are protecting your asset. A lender may require the property to be insured.
The buyer should consider income insurance as a protection of your property investment. The future employment climate may be hard to predict and loss of employment will make it harder to service the loan. Insurance companies will offer policies to cover costs while you may be between jobs.
Loan insurance is recommended and can be built into the set up costs of a mortgage with a lender. Loan insurance is only required by lenders if your deposit is less than twenty percent of the amount of the loan. This insurance only protects the lender.
If you have signed a contract of sale and paid a deposit on a property it is advisable to take out a cover note with an insurer until settlement.
Housing indemnity insurance is a requirement for property built after 1993 in Tasmania and sold within 6 years of completion. Where a builder has died, disappeared or become insolvent, homeowners may claim on their housing idemnity insurance for loss arising from building work not being completed and defective building work caused by the builder. If you are unsure if the property should have a policy contact the local council. They will have details about the building application and whether it has or should have indemnity insurance.
When you have negotiated on price you should take the contract to your solicitor before signing. People often see their solicitor after they have signed the contract. This may well be too late. It is usually impossible to change the terms of the contract after you have signed. You cannot expect to be an instant expert in contract law, so why not use the services of someone who is. If you do not currently have a solicitor you are best served by asking for details of solicitors available in your area and who specialise in conveyancing through the Law Society.
A solicitor will provide general legal advice on the contract conditions and advise of legal consequences of signing the contract. It is advisable but not essential to use a solicitor to do your conveyancing.
Because it is a legal process it is generally seen as safer to engage a professional conveyancing solicitor. The conveyancing process involves the legal transfer of property title from the previous owner to the new owner. A solicitor is also covered by professional indemnity insurance which will protect you against any loss caused by your solicitor's negligence.
The legal profession has become competitive for conveyancing business. It is possible to negotiate a lower fee by asking for quotes from legal firms.
A cost that is sometimes not considered is the expense of moving into the new house. You should have a schedule for moving based on the settlement date for your purchase. It is recommended you have a prepared inventory of goods and chattels you intend to move. If the inventory includes large or difficult items you should engage removalists to assist with the move. This is also recommended if the new property is difficult to access.
You should check that the quote for moving your goods includes insurance for all the items being moved. Government does not license removalists however the Australian Furniture Removers Association requires accreditation. They administer a code of conduct and can advise consumers on the hire of a removalist.
