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the road to home ownership isn't always easy

Hopefully after reading our previous post you have an idea of the costs involved when purchasing property. Now we will go into the actual process of the sale itself.

Finding the right property that ticks all the boxes is another article topic all together.  But lets assume you have found a property within your price range which meets your needs.  You have already completed relevant paperwork to give you the backing of a suitable mortgage provider (in principle at least) so the next step to take is to make an offer on the property.
 If an asking price is set, many buyers will make an offer which is lower than the advertised price. It’s possible your first offer will be refused (though not always if the property hasn’t had very busy open house inspections or if a quick sale is required by the seller). If the seller doesn't accept your offer, you can usually continue the process until you both agree on a price.  Know your limits during this negotiation period and don’t go beyond your budget or you'll end up paying more than you can afford.

In Australia auctions are now a very popular way to sell property, particularly in the capital cities. This can make making an offer more difficult. It can also be hard to predict how much a property will go for at auction. Getting the property valued from a third party evaluator is recommended, as well as researching recent property sales of similar dwellings in the local neighbourhood. You can still make an offer to an agent or seller before an auction takes place, but many vendors chose to sell via auction because they anticipate (or at least hope for) bids higher than the market value. 

When your offer has been accepted, it’s time to put down your deposit. It’s still early days however. While you should be committed to your offer at this point, neither you nor the seller is legally obliged to go through with the transaction yet. If you do change your mind your deposit will be refunded.

The exchange of contracts is the legally binding part of the transaction, one of the last steps in making your purchase. In most states there is a cooling off period once the contracts are signed, so you may still have up to five days during which you or the seller still have the opportunity to change your mind, but there is a standard procedure involved with backing out of a property sale and you must ensure the correct people are notified through the correct channels. Also be mindful that in many states some fees are chargeable if you back out at this point.

Purchasing property via auction does not allow for cooling off periods, so bidding at an auction requires you to be fully committed as there is no backing out once an auction bid has been won.

What Next?

If you are unsure about the best way to save for a new home, a financial advisor may assist you to find the best saving solution or investment option for your money. Alternatively, if you would like more information on the process of purchasing your first home you may want to speak to one of our friendly customer service officers who will be able to guide you through the appropriate steps.