House Buying guide 101
You have probably heard about conveyancing before. It just means buying a house, right? Correct! … mostly.
Conveyancing is the fancy name given to buying and selling property. It is when one person ‘conveys’ property to another person. Hence… conveyancing! I know, super exciting stuff.
But you probably still don’t know what conveyancing actually involves. To help you out, we’ve prepared a handy step-by-step guide to illuminate the darkness, and shed some light on this down right confusing and (at times) overwhelming process.
Why you need help
Lets get one thing out of the way first: yes, individually, none of the steps in a conveyance are that complicated. In fact, a lot of them could be handled by anyone. However, there are two HUGE reasons why you shouldn’t do it yourself:
- There are a LOT of things that need to be done. It can be overwhelming. It is all too easy to skip or forget a crucial step.
- There are a LOT of hidden dangers. You need someone with knowledge and experience to guide you and protect you against any hidden dangers that may be lurking in the darkness.
- When the colloquial stuff hits the fan, it REALLY hits the fan. Timing is of the essence, so it is best to have someone on board and ready to help straight away.
So... What happens?
Sometimes the steps can be moved around and swapped in or out, but most of the time, the process will go a little something like this:
01 Finances: talk to your bank, mortgage broker, accountant or financial planner to find out your price range. You can also use an online calculator, like this one published by ASIC, to give you a rough idea.
02 Find a house: Browse listings (e.g. on realestate.com.au), talk to agents and inspect houses.
03 Valuation: when you find a house that you are happy with, you should obtain a valuation to help you make an informed offer.
04 Submit an offer: tell the agent how much you are willing to pay for the house. Fingers crossed!
05 Success: if your offer is accepted, the agent will prepare and give to you a contract of sale. Wooo!
06 Get advice: find a lawyer or conveyancer and obtain legal advice on the contract BEFORE you sign it. Your lawyer may obtain some property searches at this point.
07 Amend the contract: negotiate changes and insert special conditions (e.g. finance) as advised by your lawyer.
08 Sign: once given the O.K. by your lawyer, sign the contract and pay the deposit.
09 Insurance: insure the property immediately! This might sound strange, but it is very important, as explained by the Queensland government here. Many banks require it, and even offer their own insurance as an add-on in your home loan application.
Making sure you want to buy it - getting all your ducks in a row
10 Inspections: perform pest and building and pool safety inspections.
11 Finance: make your formal finance application.
12 Satisfy special conditions: there are often no other conditions, but if there are, some common ones include things like: obtaining a building approval from the council to build a deck or a pool; conducting searches of the body corporate records; or obtaining Foreign Investment Review Board approval.
13 Unconditional: once all of the above have been approved, satisfied or otherwise sorted, you are good to go, and your lawyer will notify the Agent. This is known as “going unconditional”, and is when you normally pay the balance deposit.
Preparing for settlement - sorting yourself out
14 Searches: your lawyer will perform some more searches.
15 Transfer Duty (aka Stamp Duty): sometimes you have to pay it here, other times you pay it at settlement. Your lawyer will tell you.
17 Removalist: if you using a removalist, make arrangements beforehand. If you haven’t heard, you can find cheap alternatives to traditional removalists on peer-to-peer platforms like Airtasker.
18 Utilities: contact utility providers (electricity, gas, telephone and internet) to arrange to have them connected after settlement.
19 Insurance: organise home and contents insurance.
20 Pre-settlement inspection: inspect the property on the morning of settlement to make sure that the Seller hasn’t been up to any funny business – like taking the oven with them. Trust us, it happens!
21 Settlement: let the lawyers do their thing, and then pop the champagne!
Post settlement - time to celebrate!
22 Move in: collect the keys from the agent and organise your removalist.
23 Notify change of ownership: your lawyer will notify the local council, water authority, titles office and body corporate (if any) of the change of ownership.
24 Update address: talk to Australia Post about redirecting mail, and update your address with other organisations (e.g. electoral roll, drivers licence, banks).
25 Celebrate: host your housewarming party (but nothing too wild) (oh okay, a little bit wild)!
That wasn’t too bad was it? There is a bit more background work involved, but all of that is handled by your lawyer, so you don’t need to worry about it! Unfortunately, that does mean that this isn’t a complete DIY guide to conveyancing. Our future articles will go into more detail, so if that is what you are looking for, keep an eye out for those!