Purchasing a house is an exciting process. It can also be time consuming, draining and emotional. It’s easy to get carried away during this process and forget to pay attention to certain key issues that you should be considering. Make sure you keep the following points in mind before you purchase a house in NSW.
Can you afford it?
Before applying for financing and getting a loan, you need to figure out whether it’s within your means to purchase the property. Buying a property is a long term commitment and you need to be able to gage where you might be a few years from now financially, to see if you can afford to make the purchase.
There are certain protections in place under the National Consumer Credit Protection Act which require home loan lenders to give you information about whether you can afford to borrow money. You can get information about the following financing options:
- Housing loans
- Credit cards
- Hire of goods
- Short term credit
Have you inspected the property?
It is a good idea to inspect the property you intend to purchase in person to see if it matches the description that was given to you by the vendor. Under Australian law, a vendor is required to disclose certain information to you when contracting to sell residential property. You should ensure that that vendor has disclosed all necessary information to you about the property. To know what information a vendor has to disclose, please see: (link to: I want to sell my house. What do I have to disclose to buyers?)
You can arrange for a pre-purchase property inspection report to be made. This report will account the condition of the property and will inform you of any defects in the house that may be of concern to you. For instance, if the house had cracked walls and a leaking roof then this is something you would want to know about as soon as possible since it may prevent you from purchasing the house. However, property inspection reports usually do not cover the following areas:
- Electrical wiring
- Whether the smoke detectors work
- Air conditioning
- Plumbing and the drainage
- Swimming pools and the pool equipment
- The carpet
You may also want to get a pest inspection report in case there are any termites or other pests living within the structure of the house.
Making an offer
Before you make an offer to the vendor of the property, you could speak with a property lawyer or conveyance. You could give your lawyer a copy of the contract of sale so that they can review it along with any special conditions that may be in the contract to see whether it is a good deal for you.
Once you have expressed your interest in a property to the vendor, you may be asked to make a deposit. This deposit is refundable if you change your mind and does not necessarily hold the property for you. For example, if someone else decides to proceed and exchange contracts then they will be legally allowed to purchase the property.
Purchasing a home can be very exciting however it is quite a tricky process. Since you’ll be living there for a while you need to make sure it is the right house for you and that the repayments are not going to send you broke. It is a good idea to get in contact with a property lawyer or a conveyance as soon as possible to get some advice on your options.
For more information on purchasing residential property in NSW, please see: http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Buying_property.page?
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