Are you a first home buyer, selling a house, or perhaps buying a property that isn’t your first? We know it’s a stressful time, with everything from contracts to insurance it can be a little overwhelming. That’s why we’ve mapped out the process and steps in buying a house so you can navigate it with ease. If you have any questions about buying a house in Adelaide, please don’t hesitate to get in touch with Eckermann’s experienced conveyancers.
Navigating the property market can be daunting, especially for first-time home buyers. This step by step guide breaks down the 11 essential steps, from understanding the purchase price to finalising the settlement date and even considering ongoing costs.
Whether this is your first or your second investment property purchase, you need a good team on your side. To make buying a house stress-free, you’ll want to find a reliable conveyancer, a lender (or mortgage broker to help you find a lender), and a building and pest inspector to assist you with your due diligence.
Unless you’re paying cash for your home, you’re going to be borrowing. There’s a bit of number crunching to do during this step in buying a house, so you will need to decide whether you’ll engage a mortgage or loan broker, or go directly to a lender.
Whatever you decide, you’ll need to have a good idea of your borrowing capacity. This will depend on the deposit you’ve saved, your income and your spending habits. You can also take a look at the government grants that are available to help you with your deposit and purchase. Don’t forget to consider the other hidden costs of buying a house, like stamp duty, transfer of title and conveyancing costs.
Then it’s just a matter of choosing the best lender for you. Make sure you look at the interest rates and decide whether you want to do a fixed term or variable home loan.
Learn more: Homebuyer Grants and Relief in South Australia
Once you have an idea of what you can afford, the exciting part starts. Property search can become a bit of an obsession, so look forward to plenty of online searching, attending open home inspections and maybe even bidding at an auction. Good luck with it all!
And if you’re worried about bidding at auction, you can always ask someone to do it on your behalf. Some people choose to appoint a buyer’s agent. This is someone to whom you pay a fee in return for them searching, evaluation and negotiating on your behalf.
Learn more: buying off the plan
So you’ve found your dream home, and now you’re ready to make an offer! The real estate agent will give you the required form and then you can submit your offer.
If the vendor accepts your offer, the real estate agent will draft up a contract and send it over to you to review and sign. If you haven’t engaged a conveyancer already, this is a great time to speak to one.
Make sure you carefully read through the contract. If finance is not approved at the time the contract is signed or you are not a cash buyer, a finance condition (stating that the contract is ‘conditional’ on, or ‘subject to’ the purchaser being lent a specific minimum loan amount) is included in the contract as a measure to safeguard the buyer.
By having a contract of sale drawn up with a ‘Subject to Finance’ clause included, it enables the purchaser to withdraw from the contract if they are unable to obtain the necessary finance to purchase the property.
Then if you’re happy with the contract, you can sign across the dotted line.
Remember: as soon as you sign a contract, immediately arrange insurance over the property.
As soon as the contract is signed, the sales agent will serve you a Form 1. A Form 1 is a heavy duty document and it is actually a statement that is required under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994.
It should contain a lot of information including details about:
You may also come across the following terms:
This relates to any conditions that stop you developing the property in certain ways.
These can include agreements or rights of a neighbour to use a part of your property to access their own.
These documents relate directly to occupancy of the property.
The Form 1 document should inform you of anything relating to the Development Act such as building approvals, land management agreements with the local council, etc.
If you are buying a unit, even a self-managed one, the Form 1 should outline any fees, certificate of currency for insurance, etc.
Once you’ve been served with the Form 1, your two day ‘cooling off’ period begins. If you haven’t already organised it, this is when you can arrange for building and pest inspections. This will give you some assurance around any red flags that might exist.
At the expiration of your two day ‘cooling off’ period (if applicable), you need to pay the agreed house deposit amount into the agent’s trust account in accordance with the contract.
If you buy at auction, there is no cooling off period so you’ll need to do your due diligence before auction day. Sometimes there is a building and pest inspection provided – it is up to you as to whether you are happy with that or you prefer to do your own.
Now the cooling off period is over, it’s time to wait for your finance to be approved (if you have ‘Subject to Finance’ in your contract). Once finance has been approved by the lending institution or bank, notification will be given in writing to the purchaser, conveyancer and agent they are purchasing the property through.
Once this happens, finance has “officially” been approved and the contract becomes unconditional – meaning that the purchaser can no longer rely upon the finance condition and must proceed with the purchase (subject to any other conditions being included).
Prior to settlement, you will receive a Settlement Statement from your conveyancer. Check it carefully and if you have any queries, telephone your conveyancer immediately. Ensure that you pay the amount requested on your settlement statement to your conveyancer’s office.
In the days preceding settlement period, arrange for gas, electricity and the landline to be transferred to your name or connected in your name at your new house. If you need some assistance with this, Eckermann Select Service can help you. Just let us know and we’ll arrange it for you.
Congratulations, you’ve made it to settlement day! The lead-up to this day starts with the signing of the contract by both parties. This legally binds both the seller and the home buyer to the transaction. The contract will detail the agreed-upon price, the settlement date, and any conditions that need to be met before the settlement can occur.
One key aspect to consider is the settlement period—the time between the signing of the contract of sale and the settlement date. Some buyers and sellers agree on a longer settlement period to allow the buyer more time to prepare for the move, finalise their financing, or sell their current home. This period can vary, but it typically ranges from 30 to 90 days in Australia.
As settlement day approaches, be mindful of the upfront costs involved. These costs can include stamp duty, legal fees, and any other charges associated with the transfer of the property title. Ensuring these costs are covered beforehand will help the day proceed smoothly.
Once everything is verified and the seller receives payment via the property exchange platform being used by the conveyancer (usually PEXA) the property title is transferred to your name.
Finally, the moment you’ve been waiting for arrives: you receive the keys to your new home. It’s time to celebrate the start of this exciting new chapter, as you move in and begin to make the space your own.
Learn more: what happens on settlement day
For over 45 years, we’ve been helping South Australian residents with their real estate transactions. If you need help understanding the buying process, please don’t hesitate to get in contact with our experienced team.
The home buying process can generally take anywhere between three months to six months – maybe even longer. There are many dependencies such as whether you are selling an existing property, the number of homes currently on the market that suit your specifications and making other arrangements like finance (if you require a mortgage over your new property).
Before you see your lender or mortgage broker, gather all of the information you might need. This will include your bank statements, two months of pay slips, your savings and investments, proof of any other income and outgoings for at least a few months so that they are able to establish your ability to repay your loan.
Make sure you also have information about any credit you have such as store cards, buy now, pay later services, credit cards or any personal loans you might have.
It’s a good idea to have done some market research into the area and the type of property you wish to buy so that you have a realistic idea of what you will need to borrow.
The time it takes to approve a loan application will vary between financial institutions. It could take between four to six weeks from submitting the application to your lender, to reaching settlement at property. So make sure you apply early and try to get pre-approval before you make an offer.
If you are purchasing a property in South Australia for the first time and you have purchased a property interstate beforehand, you may be familiar with the concept of a pre settlement inspection. This usually occurs a few days before settlement and is a chance for the purchaser to confirm that the condition of the property they are about to settle upon is as it was inspected and with the same inclusions contained in the Contract of sale.
The pre settlement inspection gives the purchaser the opportunity to examine things like:
As we said, while pre-settlement inspections are common in some states they are not in South Australia. If you specifically require a pre-settlement inspection, this can be considered for inclusion as a special condition when you sign the Contract of Sale.
E-conveyancing is the process of conducting property conveyancing transactions electronically. It involves the use of digital technology to transfer documents including the property title and other legal documents between parties involved in a property sale or purchase. At the moment the main platform providers operating in Australia are PEXA and Sympli.
The main aim of e-conveyancing is to simplify and streamline the process of property conveyancing work by reducing the need for manual paperwork and increasing the efficiency of communication between parties. E-conveyancing platforms enable real-time access to relevant property information, including land titles, mortgage details, and other legal documents.
E-conveyancing is currently being implemented in several countries around the world, not just Australia. It is used also in New Zealand, and Singapore. It offers several benefits, including faster processing times, reduced errors and costs, improved security, and increased transparency in property transactions. E-conveyancing was mandated in South Australia in August 2020, driven largely by the global pandemic which saw the closure of face to face settlement operations.
In most cases, it is not recommended for a vendor and purchaser to use the same conveyancer, as this can create a potential conflict of interest. A conveyancer’s primary responsibility is to their client, and they are required to act in their client’s best interests at all times. If a conveyancer is representing both the vendor and the purchaser, they may not be able to provide impartial advice to both parties.
However, in some situations, such as a family transfer or where both parties are known to each other and agree to the arrangement, it may be possible for a vendor and purchaser to use the same conveyancer. In these cases, the conveyancer must disclose the potential conflict of interest to both parties and obtain their informed consent.
So, while it is possible for a vendor and purchaser to use the same conveyancer in certain situations, it is generally not recommended. Engaging separate conveyancers ensures that each party has an advocate who is acting solely in their best interests and can provide impartial advice throughout the transaction.
The length of the conveyancing process in South Australia can vary depending on a variety of factors, including the complexity of the transaction, the efficiency of the conveyancers involved, and any potential legal or financial issues that may arise during the process.
Typically, the conveyancing process can take anywhere from 6-12 weeks to complete. This timeframe includes the time required for searches and checks to be conducted on the property, the preparation of legal documents, and the exchange of funds between the prospective home buyer and seller.
However, the process can sometimes take longer if there are any unexpected legal or financial issues that arise, such as disputes over property boundaries or outstanding debts on the property. In these cases, the conveyancers may need to take additional time to resolve the issues before the transaction can be completed.
Overall, it is important to allow enough time for the conveyancing process when buying or selling a property in South Australia, to ensure that everything runs smoothly and to avoid any potential delays or issues. Engaging an experienced and efficient conveyancer can also help to speed up the process and ensure that the transaction is completed as quickly and efficiently as possible.
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