Buying Tips

 

Finding the right property

 

There's no point looking for a waterfront mansion if you can only afford a boatshed. Once you've set your price range, identify the suburbs that have properties in that range - it will save you a lot of legwork. Go to the Australian Property Monitors: Home Price Guide to see property prices in different suburbs.

Then comes the fun part: finding the house or unit you want. Take your time and consider things like proximity to schools, transport and amenities, and the condition of the property. Does it need major repairs?

Before you buy, arrange for building and pest inspections, and have the contract checked by a conveyancer or solicitor before you sign. Make sure the person inspecting your future home is qualified to do so, such as a licensed builder, architect or surveyor.

In some states you can also have inspections during the 'cooling-off period', or the 5 days after you sign the contract, as long as you don't buy at auction - where there is no cooling-off period - and you're prepared to lose part of your deposit if you withdraw during the period.

If you plan to buy a property as an investment, rather than a home to live in, read our information about investing in property.

Buying a home for the first time can feel like a giant leap into the unknown, but there are plenty of things you can do to make sure you don't fall into a financial abyss. Keep to your budget, put some money aside for emergencies, and take your time to find a place that feels like home.

Using a broker

The go-between
With so many different lenders and credit providers to choose from, you may decide to get a finance or mortgage broker to do the legwork for you. Brokers can help you find out about suitable loans or credit packages and arrange special deals.

Our in-house mortgage broker is Catherine of Imagine Finance.

What brokers do
A finance broker negotiates with banks, credit unions and other credit providers on your behalf to arrange loans. A mortgage broker is someone who specialises in home loans.

Finance or mortgage brokers can offer you a variety of loan options. They can help you select a loan and manage the process through to settlement.

Things to check when using a broker

If you use a broker, do the following.

Check that the broker is licensed
Credit providers and brokers that are not licensed are operating illegally in Australia. Make sure you only deal with a company or person who is licensed.

Search ASIC Connect's Professional Registers to check your credit provider has been licensed or you can phone ASIC's Infoline on 1300 300 630.

Find out more about the law and consumer credit regulation.

Make a wish list
Make a list of what you want and ask your broker to find a loan that meets as many of these requirements as possible. Also find out what it will cost to have these features. Ask your broker about other home loans or credit packages if you are not satisfied with their recommendations.

Get a written agreement from the broker
A written agreement should tell you the type of loan being arranged for you, the amount of the loan, the term of the loan, the current interest rate, and any fees you have to pay. The fees could include broker's fees or commissions, fees to the credit provider or lender for setting up the loan, and/or any early termination fees.

Never sign blank forms or leave details for the broker to fill in later. If you feel like you're being pressured into signing something, ask for more time to think about the loan.

Warning about business purpose declarations
Do not sign a business purpose declaration unless you are really using the loan for business and are eligible to claim your repayments as a business expense for taxation purposes. By signing the declaration, you may lose valuable rights under the National Credit Law.

Complain if something goes wrong
If you have a complaint about a broker or a dispute you can't resolve, find out how to complain or phone ASIC's Infoline on 1300 300 630.

A finance or mortgage broker can save you time and money, but you should still do your own research. Be prepared to ask plenty of questions to help your broker find you a loan that meets your needs and offers value for money.