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Buying Property Frequently Asked Questions

Q: How many homes should I inspect when looking for a property?

A: Buying a home is very subjective and varies from person to person, it can be an emotional experience, some home buyers say that if feels right, buy it, while others will look at purely as an investment. At times this emotional feeling, 'that this is the right home for you' can happen at the very beginning of your new home search.

This can lead to Chronic buyer syndrome, which is a property buyer who discovered there dream home early in the house hunting process, and then missing out because they thought they had not seen enough property to make a confidant decision to proceed. They then spend the next months and years looking for the same dream home that the missed out on, only to find the property prices are continuing to rise which results in the chronic buyer settling on a smaller inferior property.

We recommend looking at enough properties to gain an understanding of the marketplace a long with a feeling of confidence that this is the right property for you.

Q: What factors determine the purchase price of the property you are buying?

A: While a number of factors come into play, in the end a property's worth is judged by only one figure - how much is somebody prepared to pay for it at the time?

The considerations for pricing a property are:

  • Recent sales – within the past 6 months
  • Property Location – Near Transport, Schools, Amenities etc.
  • Condition – New property/off the plan, Victorian Terrace, Derelict House
  • Seller motivation' - the reason the current owner is attempting to offload the property might also play a major role in determining the final cost. If a quick sale is required, vendors have little choice but to accept the best offer at the time without the luxury of waiting for a better deal.
  • Economic factors – What are the interest Rates and affordability of real estate property
  • Confidence of market – Market confidence can be global, national or local and is determined by governments, recessions, and any global financial crisis
  • Market Competition – How many properties are available to be purchased, if high buyer demand exists at a time when very little property is actually available, prices are likely to increase
  • Where and whom you are purchasing your property from. Beware!!! If you are buying your property from a property spruikers you may be paying well over the market value for the property. Property spruikers are property investment promoters who often run wealth creation seminars, offering property investment training and materials, and discussing property investment often through self-managed superannuation funds. They advertise their seminars in newspapers, and financial and investment publications. Recently some have moved off shore to run their seminars

Your Fusion real estate agent can provide you with information and advice regarding all of these aspects of the house-hunting process through competitive market analysis. You can register with us and well help you find your property that will meet your needs. It is 100% Free service from Fusion Realty!

Q: How can I inspect a property listed with Fusion Realty?

A: To inspect a property listed with Fusion Realty, you can enter when the property is open for inspection (usually on a Saturday) or if you cannot make the open for inspection time you can arrange an appointment to inspect the property at time that suites you by calling (02) 8880 7655

Q: How do I make an offer to purchase a property?

A: All offers must be in writing to a Fusion Realty sales person. When an offer is made in writing it shows genuine interest in the property to the property seller.

Q: How much deposit do I need?

A: Generally the sellers ask for a 10% deposit, under the guidance of a conveyancer or real estate property solicitor as set out in the contract for the sale of residential land. This, on occasions can be negotiated from a seller's perspective; however the final deposit is also dependent on your bank. As banks are glorified pawn shops that will lay the blame for their inadequacies at feet of a property purchasers. They will blame a property for being high risk even though there are literary hundreds or thousands or successful examples good established properties in the market place. More than often they will use the property as an excuse an say that the property is high risk rather than being honest to the property purchaser an say that you simply do not meet the lenders ridged lending criteria. If you asked by your lender to come up with a larger deposit it's time to look around and consider other lending options.

When showing an expression of interest in a property you may put a token deposit of 0.25% of the property price down. This shows the seller of your seriousness when negotiating the final price.

Q: What happens to the deposit paid to the agent?

A: When a contract is signed, a 10% (ten per cent) deposit is usually required. This is not refundable after an unconditional exchange of contracts has taken place. When negotiating a final price an agent may ask for a smaller amount to be paid when an offer is submitted. In this case, deposits are generally refundable, especially if the vendor chooses not to accept your offer.
If you pay your deposit to a real estate agent, it will be paid into a trust account they operate. No interest is payable from this type of account.

Q: Should I ask for the deposit to be invested?

A: The answer depends on multiple factors for example:

  • How long is the settlement period (1 month or 3 months?)
  • How much is the deposit
  • What is the interest rate
  • If tax file numbers have been provided

Generally when interest rates are low it is not worthwhile, because the interest earned needs to be divided between the seller and the purchaser. Our good learned friends who are conveyancers or real estate property solicitors seem to have issues with maths and need to charge you a lot extra for calculating your correct entitlement of the interest earned on the invested deposit.

Q: What is the "cooling off period" in a contract?

A: A cooling off period is usually where one party - usually the buyer - is given a short amount of time after signing and exchanging the contracts to decide if they definitely want to proceed.

The seller is generally bound to the contract and prohibited to sell the property to anyone else during the cooling off period.

This is more common when market conditions are weak with an oversupply of real estate property or in a non-metropolitan area.

A cooling off period is never available at a property auction as auctions are an unconditional exchange of contracts.

Q: What government fees are involved in a property transaction?

A: While government fees can vary from state to state, you are likely to find that four different kinds of fees may apply to your property transaction.

These may include:

  • Stamp duty on the purchase price of your property
  • Stamp duty on the loan amount (also known as mortgage duty)
  • Mortgage registration fee - which is applicable to property purchases as well as refinances
  • Property title transfer fees charged on purchases only

For more information about the types of fees that may apply in your situation, you should contact your state revenue office.

Q: If I am a first home buyer, what kind of government fees will I need to pay?

A: First home buyers may qualify for a reduction or exemption from some government fees, such as stamp duty. Conditions usually apply to this type of exemption and these can vary from state to state. As governments win and lose elections these exemptions and incentives can change, they also regular change when budgets are delivered.

Your state revenue office will be able to provide more information about the different types of government charges and exemptions you may be eligible for as a first home buyer.

Q: What is building inspection and when is it best to do one?

A: The Building Inspection Report is a visual assessment of the condition, for major defects only, of the reasonably accessible and visible selected structural elements and fabric of the building at the time of the inspection, including the subject residence and associated areas where the property is a unit or apartment.

It is best to request a Building Inspection when your offer to purchase has been accepted by the seller of a sale via private treaty, as this will save you the expense if your offer to purchase is not accepted. However at an Auction it is best to organise a Building Inspection Report prior to the day of the Auction.

Q: Can I sub let or transfer my lease?

A: Subletting and transferring is not permitted without prior written approval from our office and landlord. Any new tenants must complete an applications form and go through the normal approval process and then sign on to the lease depending on the circumstances. This request may be refused should the applicant not meet our criteria or if the property is unsuitable for additional tenants. Fusion Realty also has a residential lease special condition that states that should the landlord grant you permission to sub lease that you may not profit from sub leasing. All rents paid for the leasing of the property belongs to the landlord and not as a profit in any sub leasing circumstance.

Q: What is strata report and when is it best to do one?

A: A strata inspection report (also known as a strata search, Owners Corporation Records Inspection or Section 108) is a report that all purchasers of a strata titled, community titled or company titled property should invest in whether this be a residential or commercial property.

The Strata Inspection Report is similar to a building report when someone buys a house. The records of the Owners Corporation must comply with the Strata Schemes Management Act. By no means do we suggest that this replaces a building inspection report. The big difference is a Strata Inspection Report will report on the building, also known as the Strata Scheme. It should provide precise details of what is happening within the building or complex. Things such as:

  • Who is the current owner?
  • What are the quarterly levies for the property?
  • What are your voting rights? What is your unit entitlement?
  • When are the levies paid to?
  • Have there been? Are there any current or proposed Special Levies (additional contributions outside your quarterly levies that may be raised for building defects or major works)?
  • Does the Strata Scheme comply with Fire Requirements, Work Health & Safety Obligations and Asbestos Management?
  • Is there any information in the records approving animals? Are animals permitted?
  • How much is in the sinking fund and Administrative Fund? Are any of the funds in deficit?
  • Are there any current legal matters? Have there been any legal matters in the past 3 years?
  • Building Defects or Home Owner Warranty Claims for Defects;
  • Breaches of By-Laws (Rules and Regulations for this building);
  • Is there any disharmony?
  • Major Income and Expenditure over the past 3 years;
  • Proposed Major Expenditure;
  • What is the current value of the building?
  • Is the building insured and if so adequately insured? (details of the insurance and cover);
  • Are there any compliance related matters within the records such as window and balcony compliance?
  • Is there a Sinking Fund Forecast? (a report prepared detailing what the levy contributions should be over the next 10-15 years including detailed maintenance);
  • Are there any known disputes within the Strata Scheme;
  • Copies of Annual General Meeting Minutes, Extraordinary General Meeting Minutes and Executive Committee Meeting Minutes;
  • Copies of building reports, extracts from compliance reports

It is best to request a Strata Inspection Report when your offer to purchase has been accepted by the seller of a sale via private treaty, as this will save you the expense if your offer to purchase is not accepted. However at an Auction it is best to organise a Strata Inspection Report prior to the day of the Auction.

Q: When should I get the contract for residential sale checked?

A: The contract for residential sale should be checked by your solicitor/conveyancer, you should arrange for your solicitor/conveyancer to check your contract for residential sale as soon as your purchase offer is accepted, as it speeds up the sale process, or prior to bidding at an auction

Q: What is the vendor reserve price?

A: The "vendor reserve price" indicates the minimum price the vendor is willing to sell the property for.

When bidding has reached the vendor reserve price, the property will be sold at auction - if it does not reach this level, the property may not be sold.

If you are bidding at auction, and the property you are bidding on is past in it is essential to be aware that negotiations with the highest bidder often begin immediately, so it is essential you are prepared to negotiate and to be the final bidder.

Q: How much do I have to pay at the start of my lease?

A: At the start of your lease you have to pay 2 weeks in advance as rent, and 4 weeks rent as bond. A total of 6 weeks rent.

Q: What is a vendor bid?

A: The vendor can make a bid to help move the auction process along - or to help push the property towards the reserve price.

This bid can either made by the vendor themselves or by the auctioneer on their behalf.

Q: I'm locked out can you let me in?

A: We charge $75 to let you back into your property, the reason why is it uses up our time when we may have other important appointments to attend to and it maybe after normal business hours. You may also call any license locksmith to pick your lock, however they should not change to lock that requires a new key without the consent of our office.

Q: I'm considering employing a buyer's agent to help find my ideal property. What exactly is their role and how do they get paid?

A: A buyer's agent is employed by a buyer to establish a shortlist of properties that meet their specific requirements or preferences.

Once this list has been developed, the agent may get the clients to inspect the selected properties and negotiate the purchase price on the buyer's behalf - or possibly do the bidding at auction.

There is a fee for using a buyer's agent, but the main advantage is that it saves the buyer from having to spend time looking at unsuitable properties.

Q: Why should I carry out a final inspection on the property I am buying?

A: No matter how excited you are about purchasing your new house or unit, it is prudent to undertake a final inspection to ensure that the property is still in the same condition it was when you negotiated the deal.

Normally a final inspection is carried out a day or two before the day of settlement.

Q: What is conveyancing?

A: Conveyancing is a term that refers to the transfer of ownership of a property -most buyers enlist the services of either a conveyancer or real estate property solicitor or solicitor to handle this process on their behalf.

While you are able to act on your own when making a property purchase, the process of documentation and settling can be complicated, time consuming and may seem daunting. Bringing in support from an expert who is familiar with legal documents and legislation can make the process easier.

Q: What does a conveyancer or real estate property solicitor do?

A: Once you have appointed your conveyancer or real estate property solicitor, they will be responsible for a number of tasks as they help you through the settlement process.

These jobs include acting as a liaison between you and your lender's solicitor, checking your contract of sale, performing title searches and acting as your legal representative for the transaction.

Your conveyancer or real estate property solicitor will also check on a number of important things for you, including whether there are any outstanding rates on the property - such as council taxes or water payments. In some cases, your conveyancer or real estate property solicitor will also check over your loan documents for you.

Q: How much does a conveyancer or real estate property solicitor cost?

A: All their costs and fees are negotiable. It is important to enquire about their costs and fees before you agree to appoint anyone. Ask the question, are there any other cost that you may impose on the conveyancing process that we have not discussed. A professional conveyancer or real estate property solicitor should disclose and have a cost agreement in place before they start the conveyancing process. Add your own paragraph to the cost agreement, "The conveyancer or real estate property solicitor agrees not to charge any other type of fee other than what is stated here. Should the conveyancer or real estate property solicitor miss quoted on them pricing they will wear the additional costs and put it down to a learning experience like every other business or firm operating in the customer service industry."

Q: How do I choose a conveyancer or real estate property solicitor?

A: There are a number of points to consider when choosing a conveyancer or real estate property solicitor.

  • Are they readily available to communicate with you and the real estate agents?
  • (It is an unfortunate reality that a property purchaser often loses the property of their dreams due to a poor communication from conveyancer or real estate property solicitor. If you find it difficult to get in touch with your conveyancer or real estate property solicitor change them promptly as you won't be the only one having those same difficulties.)
  • Do they provide the level of service you are looking for?
  • Can they provide you with the name of a recent past client who has used their services? (Nothing wrong with seeking a testimonials from a past client to check their customer service record)
  • You may be looking for a conveyancer or real estate property solicitor who can explain the process to you - particularly if you are a first-time buyer - so it is important to ensure they have time to take you through every step of the process.
  • You may also wish to consider location - you may want your conveyancer or real estate property solicitor to be locally-based or easily accessible.

Important Notice/Disclaimer:
This website and webpage along with the frequently ask questions is for general informational purposes only and is not intended to provide commercial, financial, investment, accounting, tax or legal advice. It is provided to you for your own personal use. The information provided is of a general nature only and has not taken into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and you should seek advice from your financial adviser before making any financial decisions.