Buying a property is one of the biggest financial decisions you will make. It's an exciting time but it’s also daunting, and that is why it is reassuring to know your Red Circle agent is here to help. This book will guide you through the process of finding the property of your dreams with information such as finance and legal terms that may be new to you and the steps involved in buying property.

What type of property are you looking for?

Home ownership remains "the great Australian dream", regardless of whether it is for investment or residential purposes. Some people prefer houses; others might be looking for a unit, townhouse or villa. Choosing the property type is just the first of the decisions. How many bedrooms do you need? How many bathrooms? Do you need a car space or a garage? Would you like a garden or prefer a terrace, and what size kitchen do you require? All these need to be considered so that the property you're looking for meet your needs.

Then you need to think about where you want to live. Your budget might help that decision, but you still need to consider proximity to schools, transport, shops and sporting facilities to ensure the property suits your lifestyle or, if it is an investment, those you expect as tenants. When searching for a property, it’s good to select a property with at least one unique feature. It could be a renovated bathroom, large kitchen, original federation fixtures or beautifully landscaped grounds. Different properties are harder to replace, so historically they have a higher resale value.

Keep an open mind, the best deal might be just around the corner.


What can you afford?

Calculate what repayments you can afford. As a ‘rule of thumb’, lenders will base the loan on an amount that does not exceed a set percentage of gross (pre-tax) income. It makes sense to have your finance organised before you start looking. This ensures a smooth buying process so that if you find something you like, you know your limit and have your deposit ready.

You also need to allow for additional costs such as legal, conveyancing, stamp duty on the transfer of the property, stamp duty on the mortgage, loan application fees, moving expenses, repair and maintenance, insurance fees and adjustment fees such as water and council rates. If you are having trouble finding the right lender your Red Circle agent will be able to refer you to their recommended lender.


Do your research

  • Find out what is available at both ends of your price range
  • Attend auctions in your preferred area
  • Go to open for inspections to find out what is available
  • Contact your Red Circle office for a research profile on the suburb
  • Start your search and research early

Making an offer

The offer and acceptance process is quite formalised, so it is important to understand the process before making an offer.

I like it... What's next? Purchasing real estate can be a very exciting process; it can also be confusing for a buyer. As you may already be aware, each real estate agency may have different policies and rules for making an offer. To help you secure your new home, we would like to inform you of the buying process should you decide to purchase a property through us.

1. Let The Agent Know

Sometimes a buyer is so nervous that they feel they need to hide their interest in a home, this is a great way to miss out on the property you want. You cannot bypass the agent as they are controlling the sale, at some point you will need to advise the agent that you would like to put forward an offer to the owner.

2. Information Required When Making An Offer

We will ask you to confirm the following details, enabling us to meet legal requirements and to help you in the best possible way.

  1. The actual purchase price you would be willing to pay for the property.
  2. The method by which you choose to pay the deposit. e.g. cheque/ cash /other.
  3. The settlement period that you require. This is the date you would like to take possession.
  4. The name of your chosen Legal Practitioner.
  5. The name of your bank or financial lending institution, if applicable.
  6. Any special conditions or requests that you may want us to ask the owner.

Once we have the above information, we are in a position to arrange a meeting with the vendor to place your offer forward. As soon as we have the vendor’s instructions we will immediately call and let you know the outcome of your offer. The response you should expect from the owner is either yes or no, we always aim to get a conclusion immediately.

3. Get The Property Under Contract

Once your offer is accepted, the property is not yet sold. On frequent occasion another buyer may come along and place an offer on the property, which by law, we must deliver to the owner for their consideration. This is why it is vital that contracts are signed with the deposit paid as soon as possible after a verbal agreement is made, for until a property is Under Contract, it is still legally on the market for sale.

We hope that this information is helpful and we greatly look forward to finding your new home.


Inspecting & securing your property

Inspection times are usually displayed on the marketing material. There are two types: open house or inspection by appointment. In an open house arrangement the public is invited to view a property at set dates and times. Inspection by appointment requires you to contact the sales agent to arrange a time to inspect the property. When inspecting a property take your wish list and make notes about the property. Check with the selling agent if you can take photos of the property to remind you of its features.

Once you have inspected several properties, you will have a good idea of what is available and what your budget will buy. When you have chosen the property you plan to buy, you may choose to have a pest or building inspection. If the property is being sold at auction, it is essential that these inspections are completed beforehand, and you review the contract of sale. It is important to note that the laws differ in each State, so consult with your legal representative or local Red Circle agent.


Acceptance

Once your offer has been accepted, you are required to pay the deposit as specified in the contract. The seller will then sign the offer document, making a "contract", legally binding you to the sale. Some States have cooling off periods after contracts have been signed. We strongly recommend you seek legal advice before signing.


Buying at auction

Before attending an auction you must register as a bidder. Your Red Circle agent will be able to assist you with this process. Ensure you have conducted all inspections and you are ready to purchase the property. Auctions are held either on-site or in-rooms.

It is essential that your finances are in order, that you have money ready to pay a deposit and, if you intend on borrowing, a certificate from a mortgage lender indicating how much you can borrow. Prior to auction, your solicitor must check the terms and conditions of the Contract. If your bid is successful, you are required to pay the deposit and sign the contracts immediately. A personal or bank cheque is usually acceptable — consult with your Red Circle agent beforehand.

Each State is different, so consult your agent, but there is generally no cooling-off period, you are now committed to buy. If the bidding does not reach the reserve price, the house is not sold, and is termed "Passed In". The highest bidder at the auction now has the first opportunity to negotiate with the seller


Deposits

By law, all deposit monies are banked into an official trust account on the next day they are received or by no later than the next business working day. Real Estate agents do not receive any interest or benefits whatsoever from holding deposits on behalf of the seller. If purchasing at Auction the holding deposit must be paid on the day or as stated in the contract.


When is the property yours?

It is important for buyers to recognise that the legal process governing what happens after an offer has been accepted varies between States. It can be a lengthy process. The property does not become yours when you hand over the holding deposit. It is not until both parties have signed the contract and it becomes unconditional and binding that it is time to celebrate.

Red Circle Real Estate agents are professionals, and will keep in touch throughout the legal process to advise you of any developments. They will make sure that your purchase of your little piece of Australia is as worry-free as possible.