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Your borrowing power or borrowing capacity is the amount of money a lender will loan you. Firstly, when you are searching for a home loan, there are 3 ways to go about it; 1. apply with your bank directly, 2. shop around for a deal yourself or 3. get a mortgage broker to do it all for you.
When it comes to borrowing power, the larger the deposit the better. It means you will have to borrow less to buy the house and save you on interest, help you pay the loan off faster and help you avoid paying Lenders Mortgage Insurance, which can be a significant cost.
The wait and see strategy is a popular one amongst purchasers but ultimately does little towards achieving a purchase. It is the bidder who bids with confidence and without hesitation that in most cases controls the flow of the auction. You are much better to set the tone and show your competition that you intend to buy, then sit back and potentially be on the back foot.
Some other elements to consider are:
Interest rates (fixed or variable loan, loan term etc)
Additional costs of buying (bank fees, stamp duty & legal fees etc)
Consider speaking to a mortgage broker or other finance professional
When buying a home, it’s important to consider the location and its future value. There are a number of factors influencing a property’s price potential, but location stands out as the key to future capital growth. Elements to consider are the safety of the neighbourhood, and whether it is close to:
Cafés & restaurants
Shops & shopping centres
Reliable public transport
An agent will often provide a buyer with a brochure or some form of marketing material when they show a buyer through a property. This is a great way for a buyer to remember a property and also for them to be able to take any notes while inspecting the property.
Questions for the agent:
Inspecting a property before making an offer is always recommended. It is important for a buyer to ask the agent about the terms of sale for each particular property and if the seller has any special conditions that may form part of the offer. Below is an inspection checklist as per the www.reiq.com.au website:
Some things to consider and look for when inspecting a property are:
Inside the Property:
Check for signs of rising damp, such as rotting carpet or mould on the walls and ceiling
Check the walls and ceilings for warps, cracks and any obvious damage
Test all light switches
Test the water pressure in hot and cold taps and check to see that water drains well - slow flowing water may indicate blocked drains.
Outside the Property:
When attending an open house, a buyer will often be asked by the agent to provide their contact details. Agents are required under the National Privacy Act to have available for perusal a copy of their privacy disclosure, outlining how they collect, use and store any personal information that is obtained through such registers.
Inspect fences for stability and any obvious faults
Large trees around the house may have large root systems that can cause structural problems
Check that the land’s water run-off is adequate and drains away from the dwelling
Water staining on the eaves may indicate damaged or blocked gutters
Look at the roof for any broken tiles or capping
If the property has a pool, check the legality of its fencing via the Pool Safety Council. Pools in a Community Titles Scheme (body corporate) are the responsibility of the body corporate.
Researching the property information & documents to understand exactly what you are buying is highly recommended. www.realbid.com.au unique online and mobile platform allows you to login and gain instant access to key property documents and information to ensure that you are informed, confident and ready to buy. Depending on availability, type of property and the amount of documents provided by the seller or the sellers agent, here you can find:
Comparative Market Analysis
Auction Terms & Conditions
Contract of Sale
Copy of Title
Rental Appraisal Letter
Pool safety certificate
Plus much more
You will also find some great information and resources that will also help you understand the process for both properties for sale and auctions.
There are many different ways you can establish the value of a home. Below are some of the common ways to help you establish where the property sits in value.
Sometimes, an agent, or auctioneer, may offer you a comparative market analysis (CMA). This is a document that offers you information about what similar properties have sold for in the same area. They can only give you this document with the seller’s approval.
Inspect properties currently on the market and that have sold that are most similar to your property. Another great way to research property values is to attend auctions in your location.
In particular, look at the following attributes:
Location: Is the location the same distance from amenities, transport and are both streets similar in appearance?
Size: Is the land size similar and is the living area similar?
Rooms: Are there the same number of bedrooms, bathrooms and car spaces?
Quality: Are both properties of a similar standard?
It’s critical that you compare properties that are as similar to the subject property as possible, otherwise your final figure will be inaccurate.
Try searching in the sold properties section of real estate websites and you can often find the old listings of that property.
The “market value” of a property is the price that would be negotiated between a willing buyer and willing seller in an arm’s length transaction after proper marketing.
If you want to make your own independent enquiries you can instruct a valuer to prepare a valuation of the property prior to the auction. We recommend that you pay for a valuation from a professional.
Although not compulsory, it is always advised that you have a solicitor look over the contract for sale before you make an offer. If you instruct a solicitor to advise on the contract terms before making an offer, they will explain your legal obligations and they may make you aware of matters that you had not previously considered. They may also assist in negotiating terms with the Seller’s agent and solicitor.
For the best chance to have your offer accepted, ensure you have undertaken all your research and due diligence to enable you to make an offer under the best possible terms and conditions. Remember making an offer is not always just about price, below are other things to consider & remember:
Know what price is your absolute upper limit for the home
Decide where to start offering from
Have a solicitor look over the contract first
Know the difference between a conditional and unconditional offer
Ensure you have your finance lined up
You can make multiple offers
Once a contract has become unconditional it is still important for a buyer to keep in touch with their solicitor through this time with regards to any issues that may arise approaching the settlement date.
Buyers are encouraged to arrange a pre-settlement inspection with the agent to ensure that everything is per the contract conditions, noting any included chattels or excluded fittings. Pre-settlement inspections should be conducted once the property has been vacated by the seller or its occupants.
Commonly, the solicitor will attend the actual settlement on the buyer’s behalf and both the seller’s and buyer’s solicitors will notify the agent once settlement has occurred. Only after an agent has received notification from both parties, can keys be released to the new property owner.
© 2019 Realbid Group