From the landscapes to the people, Australia has so much to offer, which might also explain the steady rise of investors coming in wanting to invest in real estate or foreign home buyers deciding to settle in the country for good.
However, the challenging part in buying a property is that you cannot just jump into purchasing from the get-go. You need to follow a certain process when buying a house in Australia.
Buying a House in Australia
Purchasing a home is not something you can do on a whim. It takes time and thought. It also deals with a complicated process. To make things smoother, here is a step-by-step guide for you to follow:
Layout Your Budget and Plan
Purchasing a house involves a considerable amount of money. So, you have more reasons to carefully look into where you will spend money for it to become worthwhile and not go over your budget. In the same way, if you ever need to take a loan, you may raise your chances of getting approved by your lender when you lay out how much you will borrow and know how much you can pay in return.
Gather a Team
To help you with your planning and the paperwork regarding purchasing property, you will need the following people:
Solicitor
Hiring a solicitor will help you take care of legal work such as managing the transfer of property and reviewing contracts before signing. In addition to this, they can also walk you through property laws and regulations.
Note: When you hire a conveyancer, one thing to remember is that they must be in the same state as the property you’re buying in. This will make the property purchase process seamless and hassle-free
Mortgage Broker
Only a few lenders are willing to lend to foreigners as many consider it a high-risk area of lending, but the process will be much easier with mortgage brokers. They may be able to help you find lenders and apply for a mortgage.
Accountant
It always pays to seek the help of a financial advisor or an accountant to get you a breakdown of all the things you will spend for your purchase. Remember that there are still other fees that you need to attend to besides the purchase price. You also need to consider additional costs such as insurance, building and pest inspections, legal fees, and stamp duty. Moreover, since these professionals are extensively knowledgeable about taxation in Australia, they can walk you through other financial matters you need to know.
Note: When you hire an accountant, one thing to remember is that they might not fully understand all tax obligations as tax rules, regulations and licensing may vary state to state. Your accountant will advise whether this is the case and may refer you to one in another state if required.
Get Your Loan Pre-approved
Once you find a lender, it is time to secure your pre-approval letter. To do this, you need to prepare documents detailing your assets and income, employment, and proof of good credit. They will need this to calculate your debt-to-income ratio and whether you can pay for the mortgage later on.
Be advised, however, that the criteria from lenders may be more complex than usual in the case of non-residents. Interest rates may vary depending on where you are from and your country’s type of currency, so before you jump in, hit the books and look these up. After which, you can calculate how much you can borrow from them, and hopefully, this will increase your chances of being lent a loan. However, expect lenders to take a higher percentage of your income as a portion for a mortgage.
FIRB Qualifications
This is requisite for non-residents and temporary visa holders who plan to purchase property in the country. FIRB, or Foreign Investment Review Board, is a government agency that attends to reviewing applications of foreigners who plan to invest in real estate in Macquarie Fields or buy a house in Australia. There are specific terms to be followed depending on your condition (e.g. temporary residency or foreign investor). You have to pay applicable fees depending on which value tier the property you plan to purchase falls under. But know that there may be certain exemptions to this, such as if you’re a citizen of New Zealand.
Getting a decision from the FIRB might take around 30 days. For this, you may need to set up an additional condition in the contract with your solicitor about your application being still subject to approval. This is to safeguard your deposit later on and make sure you get it back if your application does not get approved.
Go House Hunting
After you’ve dealt with the paperwork, you can now go on and search for a property you want to purchase. To make this easier for you, you can seek the aid of real estate agencies in Raby.
For instance, if you want to get a property in Macquarie Fields, they can immediately connect you to a local real estate agent who will show you around the available properties. Hopefully, through this, you can find a property that fits your tastes and ticks the boxes on your must-have list, such as location, size, features of the house, etc.
Negotiate the Price
When you have chosen the property you want to buy, you can now start negotiating the purchase price. If you cannot be around for such a time, you may wish to appoint a buyer’s agent to do it in your stead. You will likely receive a contract after you’ve agreed, so call your solicitor and have them go over the provisions before you sign.
They can also help you add other conditions that will safeguard you lest your pending application with FIRB does not get approved, or fill you in on the property laws of whatever state you’re planning to buy your property in.
Get Formal Mortgage Approval
After your solicitor has reviewed the contract, you need to pass the contract of sale to your mortgage broker, and they will be the ones to receive the formal approval. Only until then that you or your representative can sign the contract.
Building and Pest Inspections
Before you finalise buying a house in Australia, it would be better to send out a building and pest inspector to ensure that the house is structurally sound, free of pests, and does not pose any danger to you once you move in.
Pay the Deposit
At this stage, you are almost through with your purchase. You just need to pay the deposit. It is usually dancing around the 10% range, but that could vary depending on the state. Although at times it is not set in stone, you may be able to negotiate on it as well.
Settlement
In this stage, your solicitor and mortgage broker will then be handling the formal transfer of the property to your name through a settlement. You do not have to be present during this period. You can just pick up the keys to your new home.
Buy Your House in Australia Now!
Buying a house in Australia is a considerable commitment, and given such, you need to be extremely patient and earnest in going through the tough process. The good news is that you have List and Sell to help you out. Call us now!