Buying your
first home
a number of ideas
Buying your first home a number of ideas
Buying your first home is
one of the most
exciting ventures
you will undertake.
It is also a signifi cant
ongoing financial
commitment.
Before you buy
There are a number of things to consider before you set
out to buy a home. It makes sense to look around at
a broad range of properties, but you should also shop
around for various financial options.
To ensure a good outcome you should do your
research, compare all offers, and be disciplined
about your finances.
Make a ‘must-have’ list and maybe a ‘wish-list’. Let
these lists be your guide, but don’t confuse what would
be nice to have with what is essential.
Seek advice from people whose opinions you respect.
Advice from banks, credit unions, mortgage brokers,
real estate agents, conveyancers, will help you to get
a clear understanding of the process. And finally, use a
checklist such as this one to rate the features of all the
properties you see.
Don’t be hurried into a decision; take your time; read
everything before you sign, and ask questions.
Finding a property
Your home is somewhere to relax and spend time with family and friends.
It is probably the biggest investment you’ll make so choose wisely.
Make a list of the locations you would like to consider. Research the
facilities that are important to you, such as schools, shops, transport,
and local council services. Compare prices of similar houses in the areas
you prefer. Talk to agents; analyse recent sales and prices.
Attend open inspections and auctions to see what sells and for how much.
Work out your requirements
Unit or apartment
Attend as many open inspections as you
Owning a unit or apartment means
can to gain a better understanding of the
particular responsibilities and costs.
layout and amenities you want in a home.
Expenses can include quarterly or
Consider:
- whether you need a unit, townhouse,
apartment or a house
- how many rooms you will need,
including bedrooms
- how your needs may change over time
- the size garden you want or indeed
whether you want a garden
- whether you prefer an older or
newer house
- costs and time if you are planning
to renovate
- council regulations on renovations
or extensions.
annual corporation fees to cover security,
gardening, repairs, maintenance,
and so on.
There may be restrictions, for example,
on having pets, and with regard to
parking and noise.
Strata or community title
If the property is on strata or community title then
you should ask to see the records of the corporation,
including the minutes of meetings, the accounts and the
rules or by-laws.
- Is the corporation in debt?
- Is there a large expense imminent?
- What is the regular fee or levy?
- Is the particular unit up to date with payments?
- Do the rules allow you to use the property in the way you
would wish? (e.g. can you rent it out, can you have a pet)
More information about strata title and community title is
available on the Legal Services Commission website
www.lsc.sa.gov.au
Property checklist
When you find a property you are interested in, inspect
it thoroughly and speak with the selling agent. Ask for
a copy of the Buyers Information Notice (Form R3) that
outlines issues to consider, such as:
Negotiating
a sale
- Is the home insulated?
- Are there illegal or unapproved additions or alterations?
- Is asbestos present?
- Are there cracks, lifting tiles, peeling paint, fretting brickwork
or cracked roof tiles?
- Are there significant (protected) trees on the land?
- Is the property in a bushfire prone area?
- Are there ceiling fans, solar panels, water saving devices?
- What fixtures, fittings and chattels are included in the sale?
You can arrange for a building inspection by a qualified
person. The Australian Standards AS 4349.1 - 2007
- ‘Inspection of buildings - Pre purchase inspections
- R
esidential buildings’ sets out the requirements and
procedures.
A property will usually be offered
for sale at an expressed price,
within a price range, or by auction.
Regardless of how the property
is advertised, you can make a
realistic offer to the agent based
on your understanding of the
value of the property. You could
make an offer, subject to certain
conditions, such as obtaining
finance or building inspections.
An offer can be withdrawn at any
time before a contract is signed
by you and the vendor.
First home owners grant
From time to time, State or Commonwealth Governments
will offer incentives to first home buyers.
To find out more contact Revenue SA
www.revenuesa.sa.gov.au
Finance
Most home buyers need to borrow money but the more you
can save towards the deposit the less you will have to borrow.
Borrowings
Other expenses
Lending institutions have varying eligibility requirements
Assess your financial situation and
which they use to calculate how much they will lend you.
desired standard of living to
Generally the amount they will lend is based on your
calculate a loan amount you think
income and ability to repay. Some basic advice –
you can comfortably afford.
- Analyse your spending habits and work out how much you
Remember to plan for future
can afford to borrow and repay. Although there are many
commitments or changes in
reasons to justify buying a home, only go ahead if you can
circumstances. Extras may include:
really afford it.
- Shop around for a loan. Always ask questions about fees
and charges, and make sure you study the fine print on all
contracts, brochures and information leaflets.
- If you borrow to your maximum capacity today, you might
find yourself in difficulties in future if the interest rate goes
up or if there is some unforseen expense that you must
meet. And remember, you will be required to pay
mortgage insurance if you are borrowing more than 80%
of the purchase price of a property.
- Work out whether fixed or variable rates suit you best, and
whether you prefer fortnightly or monthly repayments.
- Remember, brokers are not always independent – ask
them to justify their recommendations, and always read
the loan conditions carefully before signing anything.
- loan establishment fees
- legal and conveyancing fees
- government charges such as
GST and stamp duty (payable on
the mortgage and the transfer of
property)
- property inspection fees
- moving costs
- any outstanding council rates
- insurance (building and contents)
- immediate repairs required, and
- furniture you may need to buy.
The offer to buy
If your offer is accepted by the vendor then a contract is
prepared. The terms and conditions of the sale are set out in
the contract and include:
- the name and address of the vendor
- your name and address
- details of the property for sale
- chattels included and excluded from the sale
- the sale price (including GST if applicable)
- deposit amount
- settlement date
- conditions of the sale (including finance conditions).
If your offer is accepted, the vendor will countersign the
contract and it will become legally binding. Once the contract
is signed and has been presented to you, the cooling-off
period will commence.
The contract
Cooling-off
If you buy a property in SA, other than at auction, you have a cooling-off period in which
to reconsider the purchase, conduct further inspections, or to just change your mind if
you feel you have made a hasty decision. The cooling-off period extends to the end of
two clear business days from the making of the contract or the service of the Form 1,
whichever is the later.
Buying at auction
There are strict rules about the conduct of auctions that ensure the process is transparent
and fair. For example:
- T
he vendor’s statement and a buyers information notice (Form R3) are available for
three (3) consecutive business days before the auction and again 30 minutes before the
auction commences.
- Everyone intending to bid at an auction must provide ID and register on the bidders register.
- T
he successful bidder will be required to pay a deposit on the day (unless otherwise agreed
in writing).
- R
emember – you cannot make the contract subject to conditions and a cooling-off period does
not apply to properties bought at auction. It is important to sort out finances and conduct any
inspections prior to the auction.
If you want to bid at auction, be clear about your bidding limit.
Checklist
- Will the home suit your lifestyle?
- Is the home located near places you visit
regularly such as work, shops, friends
and family?
- Is the street-traffic light/heavy?
- Is the home big enough for your needs but not
so big as to increase energy consumption?
- A
re the eaves large enough to provide shading
when needed?
- D
o windows facing east or west have adequate
shading?
- A
re windows and doors located appropriately to
get good natural cross ventilation?
After sale
Advise your lender that your offer has
been accepted and finalise your loan
documentation. Arrange building and
contents insurance effective from the
date of signing the contract.
Involve your conveyancer as early as
possible in the process.
Organise a pre-settlement inspection
- Is electricity, gas, solar connected to
the property?
- W
ill neighbouring buildings cause
overshadowing problems?
- Is there insulation in the roof and walls?
- Is there a rainwater storage tank or solar hot
water system?
- Are existing heating and cooling systems, taps,
appliances, lighting and hot water systems
adequate and energy efficient? Do they work as
they should?
- Are the building materials and appliances durable
and low maintenance?
of the property to ensure it is in the
condition you expect.
The sale is fi nalised at settlement when
all checks have been made, the title
and transfer documents exchanged,
and the balance of the purchase price
Further information
It’s about the house: a guide
to buying or selling a home.
has been paid. Once settlement is
Consumer and Business Services
completed, make arrangements to pick
publications available in print or
up the keys to your new home.
electronically from
www.cbs.sa.gov.au
ISBN 978-0-9803847-6-5
Buying a home is a time-consuming and complex process.
We hope this information helps you find the right home.
Consumer and
Business Services
Advice in your language
Chesser House
Telephone Interpreting Service. A
91-97 Grenfell Street
person will interpret for you in a
Adelaide SA 5000
three-way conversation.
Postal address
Ask to be connected to Consumer
GPO Box 1719
Phone 131 450 to use the FREE
and Business Services on 131 882
Adelaide SA 5001
www.cbs.sa.gov.au
Phone 131 882
Knowledge...not just numbers