A new (step by step) home buyer checklist for 2020 [Post-COVID 19]

Buying a property can be a daunting, long and complicated process, even for seasoned buyers. It's helpful to know upfront what to expect, what needs to take place and when, to make sure your purchase is as seamless as possible. 

Here is a complete checklist of everything a buyer needs to tick off their list as part of a property purchase. 

1. Do your research

Research the market and areas in which to purchase. Consider what you’re looking for in a home or investment. What are the deal breakers? Review recent sales in areas you’re interested in.

If you’re a first home buyer, you may be eligible for the First Home Owner Grant scheme (“FHOG scheme”). Look into any other grants or benefits you may be entitled to. 

2. Find out how much you can borrow

Speak to a mortgage broker or your bank to find out how much you can borrow. This will help narrow your search. Don’t forget to also factor in other costs like stamp duty, conveyancing fees, lenders mortgage insurance if applicable as well as moving costs. 

Getting pre-approval will usually help shorten the process once it comes time to secure finance for settlement. 

3. Inspect properties 

This is the point in time when you may find yourself at open houses every Saturday. This can be tedious, but necessary. Create a shortlist of properties online and visit those of interest. Make sure to ask agents questions about any properties you’re interested in. Inspect any properties you’re very interested in more than once if possible and necessary. 

4. Review the contract of sale

For those properties you’re interested in you should request the contract of sale from the agent. Once you have the contract of sale, it is time to engage your conveyancer. The seller's real estate agent or conveyancer generally prepares the contract of sale. The buyer’s conveyancer reviews the contract and negotiates any changes before the parties’ sign.

5. Conduct building and pest inspections

Most contracts are contingent on the satisfaction of certain conditions concerning building and pest inspections as well as financing and a variety of property searches. The purchaser often orders and reviews the inspections whereas the buyer’s conveyancer typically orders and reviews the property searches. The buyer’s obligation is not fixed until all contract conditions are satisfied. 

6. Make an offer or bid at auction 

If the property is going to auction you can consider making an offer ahead of the auction if the seller is interested in offers. Speak to the agent for advice. 

If you want to be in the running at an auction, you must be ready to exchange contracts and complete the sale. That means you need to have all of your ducks in a row from organising finance to securing a conveyancer. To be able to bid at an auction you will need to register as a bidder. The highest bidder will be the buyer, so long as the bid exceeds the reserve price. Contracts will be exchanged immediately. 

Alternatively, for a private sale, you can make an offer. If the offer is accepted, you will proceed to the exchange of contracts. 

7. Exchange of contracts

Once both parties have reviewed, signed and exchanged two copies of the contract, the buyer will pay a deposit. The buyer will usually have a “cooling off” period of five days following exchange, but this can be negotiated or waived. In this time the buyer may withdraw from the agreement, forfeiting the deposit but incurring no legal penalty. There is no cooling-off period when purchasing at auction.

Once contracts are exchanged the property will enter the settlement process which is usually about six weeks. The property will be yours once settlement is completed. 

8. Secure financing 

Now is the time to speak to your bank or mortgage broker about finalising your finance. Ensuring your finance is secured in time for settlement will ensure you avoid paying penalties. 

9. Visit the property one last time

Buyers should undertake a final inspection of the property in the presence of the seller’s agent as close to settlement as possible. The buyer should raise any issues as quickly as possible. 

10. Review the title one last time

Your conveyancer will review the title prior to settlement to make sure there are no new ownership interests or caveats which will need to be lifted so that a change of ownership may occur. 

11. Sort out insurance 

Home insurance will cover the cost of repairs or damage to your property. Look into the rules in your state to understand at what point damage to the property becomes your responsibility. In some cases, this will be before settlement, so securing insurance in advance of settlement may make sense, especially if you have negotiated to occupy the home ahead of settlement. 

12. Settlement 

This is the big day. Buyer, seller and lender exchange legal documents and the remaining purchase price is paid. There may be final adjustments for taxes, rental fees and the release of existing mortgages. 

Your lender will notify relevant authorities of the change in ownership and lodge transfer documents with the Land Titles Office.

13. Get the keys!

The property is now yours! Given you most likely won’t attend settlement, you will need to organise to get the keys. Make sure you also have the codes for any security devices. 

The process of buying a property is rarely completely smooth. Whether it be issues with finance or contract concerns, it is common for unexpected surprises to pop up. This is why it's critical to establish a great team around you including your conveyancer and mortgage broker to handle any issues and ensure settlement occurs by the deadline.