Offer accepted on IP1 - What now?

[BLTN]

Hey everyone,

Looks like I might finally be entering the property market. So now I have a very short amount of time to work out the following things:

- Building inspection report (no idea who to go through for this)
- Get finance sorted (not sure whether to use a broker or not as I don't actually need to borrow any money)
- Find a conveyancer (I have a few legal friends - can they help?)

I'm kinda freaking out a bit - I don't know anything about any of these.

And the timeframes for settlement / building inspection / finance are tight with christmas and new years

Any advice for a newbie??

Thanks peeps

 

[BLTN]

I'm also unsure how things unfold from here - say the building report finds issues, am I still limited to get my finance and settlement sorted in the required timeframes?

 

[Kinnon Bell]

What state is the property in?

 

[Peter_Tersteeg]

As soon as you sign a contract you need to do the following:

* Get insurance over the building.
* Get your finance sorted out.
* Engage a conveyancer or solicitor.
* Order building and pest inspections.

You need to get the ball rolling on all these immediately after the offer has been accepted. Realistically you should have done some research on these prior to making the offer, but for most of it you just need a phone number.

 

[alexlee]

For people who aren't in the OP's situation:

1) Talk to a mortgage broker
2) Line up a building inspector
3) Line up a solicitor
4) Learn the steps between making and offer and settlement

BEFORE you even start looking at properties!

 

[sanj]

For people who aren't in the OP's situation:

1) Talk to a mortgage broker
2) Line up a building inspector
3) Line up a solicitor
4) Learn the steps between making and offer and settlement

BEFORE you even start looking at properties!

Agreed!

What are the terms of this contract? What is it subject to etc?

 

[BLTN]

What state is the property in?

WA

As soon as you sign a contract you need to do the following:

* Get insurance over the building.
* Get your finance sorted out.
* Engage a conveyancer or solicitor.
* Order building and pest inspections.

You need to get the ball rolling on all these immediately after the offer has been accepted. Realistically you should have done some research on these prior to making the offer, but for most of it you just need a phone number.

I hadn't even thought of insurance yet.

The rest I am looking to get sorted, but no idea who to contact. It's like getting a mechanic for your car - it seems to be all word of mouth and ultimately trust that you are getting value and the service you are paying for.

What are the terms of this contract? What is it subject to etc?

Acceptance was yesterday.

14 days for building inspection
21 days for finance
28 days for settlement

 

[alexlee]

Acceptance was yesterday.

14 days for building inspection
21 days for finance
28 days for settlement

Calendar days, or business days?

 

[Peter_Tersteeg]

Acceptance was yesterday.

14 days for building inspection
21 days for finance
28 days for settlement

Get in touch with Colin Rice (posts as FMS) 0410 614 306. He's a broker in WA who's posting regularly.

Obviously Colin can help with your finance, but he'll also likely be able to give you the details of a good conveyancer or solicitor. You need to be in touch with them today as well. He may also know a building inspector and insurance broker.

You can also look your existing insurer of your home or car. They'll usually offer multi policy discounts which are worth considering. Reputation and recommendation also goes a long way here (it doesn't matter how cheap they are if they won't pay out), which is why I prefer to use a specialist broker.

You may not need building insurance if the property is part of a strata corporation as they may already have it covered. You'll probably want landlords insurance though. Contents is the tenants problem, not yours.

On the surface the time frames you've mentioned appear adequate and I'd say the building, pest and finance can all be met even though we've got Christmas in the way. I'm very reluctant with the 28 day settlement period though. You may unfortunately be looking at a late settlement.

 

[Aaron_C]

28 day settlement over Christmas is basically a 14 day settlement so you better get moving.

 

[pinkboy]

Whoa, that's tight for your first purchase, especially without having all the upfront basics required in place.

Get onto a broker ASAP! Finance the property even if you can pay cash, and have the rest sit in an offset (Broker will steer you in the right direction here). Obviously you have a very healthy finance position, and if you structure it right from the start you can double your borrowing limit compared to a poorly structured portfolio.

Building and Pest....well you can get on Google for that. If you know of people who have used someone specific, it cant hurt, but there will be lemons amongst them as in all trades and services.

Use a solicitor for conveyance works. Might cost a little more, but worth their weight in houses should something a little bit out of the ordinary come up.

Without this knowledge, are you confident of your purchase? Is it the right investment for your circumstances etc? Have you signed a contract yet?

pinkboy

 

[BLTN]

Sorry, should have clarified - settlement is within 28 days of finance approval.

Calendar days, or business days?

I assume calendar days? It just says 'days' in the contract, and given the multiples of 7, I assumed it was calendar days.

 

[BLTN]

Get in touch with Colin Rice (posts as FMS) 0410 614 306. He's a broker in WA who's posting regularly.

Obviously Colin can help with your finance, but he'll also likely be able to give you the details of a good conveyancer or solicitor. You need to be in touch with them today as well. He may also know a building inspector and insurance broker.

You can also look your existing insurer of your home or car. They'll usually offer multi policy discounts which are worth considering. Reputation and recommendation also goes a long way here (it doesn't matter how cheap they are if they won't pay out), which is why I prefer to use a specialist broker.

You may not need building insurance if the property is part of a strata corporation as they may already have it covered. You'll probably want landlords insurance though. Contents is the tenants problem, not yours.

On the surface the time frames you've mentioned appear adequate and I'd say the building, pest and finance can all be met even though we've got Christmas in the way. I'm very reluctant with the 28 day settlement period though. You may unfortunately be looking at a late settlement.

Thanks mate.

I would have thought insurance was something I could get sorted out in the coming weeks? As in it is not urgent that I get it sorted out before settlement?

Get onto a broker ASAP! Finance the property even if you can pay cash, and have the rest sit in an offset (Broker will steer you in the right direction here). Obviously you have a very healthy finance position, and if you structure it right from the start you can double your borrowing limit compared to a poorly structured portfolio.

This is exactly my concern. While I am in a healthy position, I want to make sure I don't limit my future growth and lending due to poor structures now.

Building and Pest....well you can get on Google for that. If you know of people who have used someone specific, it cant hurt, but there will be lemons amongst them as in all trades and services.

I think I am going to have to just take a guess here. As I said, it's like a mechanic - there is really no way of knowing before hand whether they will be good or not. Word of mouth and reputation is all you have.

Use a solicitor for conveyance works. Might cost a little more, but worth their weight in houses should something a little bit out of the ordinary come up.

Thanks, I will do so. Need to find one though...

Without this knowledge, are you confident of your purchase? Is it the right investment for your circumstances etc? Have you signed a contract yet?

Honestly, I'm never going to have the amount of knowledge I want to make an 'optimal' investment. I am great at strategising and using tactics when I have all the information - but with stuff like this, the information asymmetries are huge. And I'll never have all the information.

Just need to dive in and learn as I go I think. This is a very cheap purchase, and as far as I can tell, seems to have relatively low downside risk. It will be a learning experience.

 

[Peter_Tersteeg]

The insurance technically is something that can wait. You don't own the property until the settlement date, so generally the insurance is still the vendors responsibility until that time...

...but...

...Does the vendor have insurance? In truth you don't know, so it's a good idea to get insurance sorted out anyway. Most insurance policies cover you from the day they're set up, but you only start paying from the settlement date.

It's fair to say that the other things are more urgent, so make those calls first. As soon as those calls have been made, get onto the insurance for peace of mind.

 

[Sove18a]

Agree - get insurance sorted and use a broker as they will find you the best policy for your needs.

If you borrow from the bank, then the bank will want a copy of the certificate of insurance.

Good luck!

 

[sanj]

I'd like to offer a slightly different POV here. You haven't even spoken to a broker or bank, I think its pretty irresponsible of you to potentially waste the vendors time here when you aren't sure if you are likely to get approved and I'm surprised the agent didn't at least check this.

Timelines are tight but you should be ok if you rush, hopefully you've got up to date financials available.

 

[Aaron_C]

I'd like to offer a slightly different POV here. You haven't even spoken to a broker or bank, I think its pretty irresponsible of you to potentially waste the vendors time here when you aren't sure if you are likely to get approved and I'm surprised the agent didn't at least check this.

Sanj - he did say this:

"- Get finance sorted (not sure whether to use a broker or not as I don't actually need to borrow any money)"

 

[Colin Rice]

Get in touch with Colin Rice (posts as FMS) 0410 614 306. He's a broker in WA who's posting regularly.

Obviously Colin can help with your finance, but he'll also likely be able to give you the details of a good conveyancer or solicitor. You need to be in touch with them today as well. He may also know a building inspector and insurance broker.

Thanks PT_Bear.

Can also assist with all of the above