How To Buy An Apartment: A Step-By-Step Guide
You will be well on your way to buying your first home with the help of our step-by-step guide on how to buy an apartment.
Apartments are often the residence of choice for first-time buyers, whether it’s creating a new home or purchasing as an investment. Here’s a step-by-step guide to turning your first-home dreams into a reality.
Get Your Finances in Order
Once you have saved up a significant deposit – at least 10 per cent of the purchase price – it’s time to get your finances sorted. Speak to a mortgage broker or bank directly to find out how much you are able to borrow. This will depend on your income, credit score and monthly outgoing expenses. Applying for a pre-approval will provide an accurate indication of your purchasing power and allow you to look for the right type of properties within your budget. Depending on the bank, pre-approvals usually have a validity of three to six months.
Start Your Search
Having a clear idea of what you can comfortably afford will help narrow down your property search. Consider why you are buying the property – are you purchasing as an investment, to renovate or to accommodate a growing family? Focus on the things you “must-have”, which will allow you to prioritise what matters most. Remember, you won’t necessarily find a property that ticks every box so it’s important to find the right balance. Do your research and look at recent sales results so you can choose a suburb that is within your price range. Make sure to check out the local neighbourhood and facilities, and keep in mind things such as parking space, public transport and traffic.
Ask About the Hidden Costs
Being well informed about the hidden costs of purchasing a home will keep you prepared and avoid any headaches later on. Make sure you purchase a strata report, which will reveal any pending or ongoing works in the building as well as special levies, expenses and compliance issues. It will also show how much money is in the capital works fund, so you can determine whether you’ll have to fork out more money in the future. You may also choose to arrange a private building inspection, pest inspection or property valuation.
Auction or Private Treaty?
Once you’ve found a property that you wish to buy, there are two methods of purchasing: auction or private treaty. In a private treaty, you’re negotiating the sale price with the vendor and can negotiate certain terms and conditions. There is also a cooling-off period, which depends on the state you are purchasing in. At auction, if you are the successful bidder you will have to sign the contract and provide a 10 per cent deposit on the day. There is also no cooling-off period. If the property is passed in at auction and you are the highest bidder, you will be given the opportunity to exclusively negotiate with the vendor.
Settlement Day & Moving in
Before you are handed over the keys there are a few steps that make the property legally yours. The settlement period is usually between one and three months, beginning the day the contract is signed, with the exact length outlined in the contract of sale. You should arrange a final inspection leading up to the settlement day, as this is your last chance to make sure the property is left in the condition you expected. Most people will engage a conveyancer or solicitor to assist in the settlement process and manage the legal, financial and admin work. During final settlement the remaining payment for the property will be made, transfer documents are signed, and property title will be changed. Now that all the paperwork is done you are ready to move in and enjoy your new home!
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