Helping Aussies buy their first home

Frequently Asked Questions &

Jargon.

So the whole thing is free, what is in it for you?

We get a small referral fee from the mortgage brokers we recommend you to however it is in their best interests financially to get you the very best product that you will be happy with. If you refinance within 12 months they lose their commission. (See Mortage brokers pay explained video)

What should I buy first, a home or an investment property?

See our video “rentvesting” explained.

Is this only applicable for people looking to buy in Victoria?

Most of the process is universal throughout the different states of Australia however there may be some different steps involved mainly when it comes to the contract of sale.

The agent is telling me the section 32 is not available but the auction is next week what do I do?!

This is a common tactic by real estate agents to not release the section 32s to the buyers until the week of the auction. It minimises the chance of someone making an offer that the vendor will reject forcing the agent and vendor to increase the asking price prior to auction. (See our video “underquoting explained”)

Should I make my offer subject to finance or unconditional?

Unconditional always has stronger negotiating power ie, a vendor is likely to consider an unconditional offer of $455,000 over an offer of $460,000 subject to finance. (See our video “how to negotiate” for more info.)

Should I build or buy established?

This depends on what you are looking for. Please see our video (build vs buy established.)

I am looking to sell my home and upsize, should I sell before or after I buy my next home.

It is very important you seek advice from your mortgage broker prior to committing to another property on paper. They will guide you through this step depending on your financial position.

I am interstate and am not able to make it to the open homes. What should I do?

I would recommend having a chat to our buyers advocates. They will manage the whole purchase process for you after sitting down and noting all of your criteria. You will receive detailed reports and photos of properties of interest before deciding remotely as to which property to purchase.

Is it necessary for me to do a final inspection prior to settlement?

It isn’t compulsory however it is STRONGLY advised. In the instance something is broken for example, if you report it to your conveyancer prior to settlement you can be compensated. If it is reported after settlement it is very unlikely anything can be done.

Should I change the locks after I buy a home.

Yes

Jargon explained:

 

 

Section 32: A collection of documents about the property provided with the contract of sale. These include the title search, plan of subdivision, body corporate information, rates notice, water bill plus more. A section 32 may also be referred to as a “Vendor’s Statement”

Unconditional offer: an offer that is not subject to finance or any special conditions i.e. building inspection or subject to you selling your home before committing to buy this one. Generally the only term an unconditional offer will be subject to is the 3 day cooling off period (When not purchased at auction.)

Subject to finance: Subject to finance is referring to making your offer on a home only applicable if the bank will loan you the money require to purchased eg making your offer subject to finance for 14 days (giving you 14 days for the bank to give you the greenlight)

Cooling off period: A Cooling off period is a period of 3 days after a you make an offer that you are legally allowed to pull out of the deal for whatever reason. You are liable to be penalised a small fee if the seller has already accepted your offer in writing. This is generally a few hundred dollars but hey, It is a lot better than being stuck with a mortgage you don’t want! *Please note* a cooling off period is not applicable if you make an offer 3 days prior to or after an advertised auction including the auction day itself. Refer to your conveyancer for more information.

Conveyancer: A conveyancer is someone who will represent you legally during the purchase / sale of a home they are generally substantially cheaper than hiring a lawyer too.

Mortgage Broker: A mortgage broker is a professional who helps you shop around for the best home loan that will suit your needs. Seeing a good broker is substantially better than dealing direct with a single bank and can save you literally thousands of dollars.

Reserve price: A reserve price is the price a vendor will set with the selling agent at an auction. This price is the absolute bottom figure the seller will take but will not be publicly broadcasted prior to the auction day in the hopes steady competition will lift the final price higher than this price. As a participant on the day of auction you are entitled to ask the auctioneer “Are we on the market” which is asking if the bidding has surpassed the vendor’s reserve price.

Under contract: also referred to as “under offer” this is the period in which the vendor has accepted an offer and is waiting for the conditions to be adhered to. For example, if an offer was made subject to finance for 14 days there would be a period of 2 weeks before the buyer is granted finance and the greenlight to proceed with the purchase. If a property is under contract there is a chance it may fall over and come back on the market.

(S.T.C.A): “Subject to council approval” This means the agent believes it may be possible to substantially change the property (i.e. building units) but the local council would need to approve it first.

Stamp Duty: The tax a purchaser pays to the government based on the value of the property. See www.sro.vic.gov.au

Lenders mortgage insurance (L.M.I): Lenders Mortgage insurance is a fee the bank will charge a person taking out a home loan with a smaller deposit, generally anything less than a 20% deposit will incur some degree of LMI. This fee offsets the risk to the lender.