FIRST TIME BUYING PROCESS! help!!

hey guys,

IM retty green when I comes to investing, but I have done a lot of research over the last 6 months and think Im read to bite the bullet.

Im just unsure of the buying process (from gaining finance to closing a deal).

I understand most of the steps but just unsure of what order and don't want to get tricked into signing anything before I have taken the appropriate measures. i.e building inspections and so on.

cheers,
 
Regarding finance, have a chat to a good broker that is familiar with investment lending. Be careful because not all brokers are good at this!! They'll be able to guide you through it and set you up properly, making sure your set up is structured correctly and will allow to you keep borrowing for the next few purchases, rather than just this one.
 
Hi Daine,

If you're looking at buying in QLD there's some good sites out there that take you though the basic steps and what to look out for. A couple of the good ones are:
https://www.qld.gov.au/housing/buying-owning-home/
http://www.reiq.com/buying-selling/8-steps-to-buying-property/1-money

To purchase you need a good team lined up and ready to go (and they can help guide you through the buying process too) - solicitor / conveyancor (QLD you will need a solicitor to do the converancing), accountant and broker to name a few. Have a chat to a broker at the start of your process so you will get an idea of how much you can borrow so you can look for places within that pricepoint. A good broker won't just look at that transaction though but work through your goals and plans and set up your lending to advantage you now and in the future.

You will be able to negotiate want you want into the contract (doesn't mean you will get it) so B&P, finance clause, settlement period and anything else you may want to put in there. Do a search on the forum as there's some good threads and posts on the wording of such clauses.

QLD and NSW contracts have a 5 day cooling off period by default - if you cool off during that period the vendor has the option to ask for 0.25% of the purchase price.
 
It would be worth a visit to your friendly local broker in Trinity Park, Kinnon is a wealth of knowledge.

You want to make sure that your finance condition is worded correctly

Amount: Sufficient to Complete
Financier: Buyer's Choice
Date: ?? Days from Contract Date

Where ?? is the number your broker says, normally 14 or 21 days

The finance clause is very broad. As long as you make reasonable steps to apply for finance you don't have to be reasonable about accepting the offer. (ie you can terminate )
 
Hi Daine

Welcome aboard.

A finance person (broker or banker) should be able to spell out the process and advise on lenders/products suitable to your situation. Depending on your circumstances, they might suggest getting a preapproval (if they feel it could be a marginal application - or if you're purchasing in a heated market and needed to save a day or two on getting your finance "formally" approved).

You'll also need a good solicitor - I've dealt with Darryl and his team a fair bit (he responded to your post too) and they do a great job up in QLD.

Cheers

Jamie
 
What option for first IP?

I will be using equity in my house and only wish to spend around 450k max, incl costs. Looking at an 88% LVR for our first IP.

I have been asked below and don't know what one to go for- I'm still researching QLD and NSW regional areas so probably purchase end of April.

Please help me out?

Firstly, we can do a refinance on your property, to obtain deposits and stamp duties.
Secondly, we can opt for a pre-approval then you can start looking for a property.
Or we can go for an unconditional where this is once you have found a property we require signed contracts.


Thanks
Teddy
 
Firstly, we can do a refinance on your property, to obtain deposits and stamp duties.
Secondly, we can opt for a pre-approval then you can start looking for a property.
Or we can go for an unconditional where this is once you have found a property we require signed contracts.

1st Yes you can it is your money

2nd Yes, preapproval is good to make sure you are able to service a loan etc just remember it isn't approval for any property for the value you have given. They will only lend you 80% of what they value your property or up to your preapproved amount.

You can go unco on a property but it has it risks, even with preapproval and the property not having anything visibly wrong doesn't mean you should go unco as the valuation might be low or there might be something you cannot see that a building or pest inspection would identify.

Hope this helps :)
 
Kind of-

I think i go for pre-approval first - so I can look at investing in a property sooner...Then after I find one I assume the equity will be set-up for the deposit and contracts signed.

Do they have time limits on them- (pre approval and uncond)?

Thanks
 
Daine I hope you got your process sorted and got a good result. If you are still going here is a thread that discusses the WHOLE process.

http://somersoft.com/forums/showthread.php?t=100568

Teddy1 the lowest risk option would be to get pre approval up to an amount that is a bit MORE than the property price you are looking at. Then anything under this amount should be ok. Then as soon as you find the property and have an offer accepted or sign a contract with a cooling off (in NSW) or subject to clauses like finance (QLD) you quickly send a copy of the contract to your broker, they order a valuation and you get your formal approval before going unconditional. In an ideal world doing it this way means less risk.
 
Does that mean that if you can get approved for double, that amount, you don't need another loan application if another property is bought in 3mths
e.g. if you get $800k approval, could u buy a 400k property and then another 400k property with the same pre-approval application within 3mths

thanks
 
Daine I hope you got your process sorted and got a good result. If you are still going here is a thread that discusses the WHOLE process.

http://somersoft.com/forums/showthread.php?t=100568

Teddy1 the lowest risk option would be to get pre approval up to an amount that is a bit MORE than the property price you are looking at. Then anything under this amount should be ok. Then as soon as you find the property and have an offer accepted or sign a contract with a cooling off (in NSW) or subject to clauses like finance (QLD) you quickly send a copy of the contract to your broker, they order a valuation and you get your formal approval before going unconditional. In an ideal world doing it this way means less risk.

Thanks knight

In reference to ideal world what do u mean, that this doesnt happen often. I thought it can take 3 weeks or more to go unconditional? My thought was if i had unconditional i could bargain more aggresively with vendor. I will settle in 30 days if you sell for 20k less etc??

Or put 2 offers on the table
Cheers
 
Cheers knight

I had already found your thread and saved it!

And yes, I revaluated my situation and decided to save a little more before jumping in. should be able to afford 90% LVR of my price range in the coming months!! Still super excited on my first IP.

This just gives me more time to keep learning!!
 
Cheers knight

I had already found your thread and saved it!

And yes, I revaluated my situation and decided to save a little more before jumping in. should be able to afford 90% LVR of my price range in the coming months!! Still super excited on my first IP.

This just gives me more time to keep learning!!

Great! Keep going.
 
Thanks knight

In reference to ideal world what do u mean, that this doesnt happen often. I thought it can take 3 weeks or more to go unconditional? My thought was if i had unconditional i could bargain more aggresively with vendor. I will settle in 30 days if you sell for 20k less etc??

Or put 2 offers on the table
Cheers

Just means that there are lots of variations to the exact timeframes and orders of things happening in the real world. If you have the choice to get pre approval now then its only good for you, so you might as well. Then when you want to bargain on a property the only remaining finance issues will be the val, not you, your payslips, your spending on groceries etc etc, these are the things that take most time from lenders to qualify you. The val is the final step towards formal approval in most cases.

Yes if you are willing to make unconditional offers you can bargain harder - ie make cheeky offers in cool markets or be the preferred offer at the same price in a hot market. But remember you are the one taking the risk. If for some reason you can't complete the purchase or the val comes in lower your deposit is at risk. Not saying it can't be done, just that you need to understand your risk position. Being flexible with settlement terms is a good one because it often doesn't cost more or less, some vendors want to sell and stay for a while etc. Super fast settlements are great for some vendors but remember you still have to complete the paperwork and the bank is usually the slowest member of your team.
 
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