Purchasing your home
Purchase a property is a big decision and commitment, and the preparation is also an equally lengthy one, but it doesn’t have to be a stressful experience. It is useful to familiarise yourself especially if you are relatively new to the country and/or have not purchased a property in the country before, as practices and rules may differ from those of your home country.
There are a number of key steps in purchasing your home in Australia, and you may find similarities and differences with what you’re used to back home.
If you are not a permanent resident or citizen of Australia, such as if you are a 457 visa holder, you will need to put forth an application to purchase a residential real estate in Australia to the Foreign Investment Review Board (FIRB), one of the Australian Government’s advisory boards. This is so the government can ensure that the foreign real estate ownership it does allow is of benefit to the community and in keeping with the community needs. Learn more at www.firb.gov.au.
After you prepare a budget and understand your financial position, keep in mind the following additional costs involved in purchasing a home in Australia:
- Stamp Duty of Transfer – use the Office of State Revenue calculator to estimate
- Building and Pest Reports
- Legal and conveyancing costs
- Financing/Mortgage costs
- Home and content insurance
- Moving costs and utilities
- Ongoing council rates
- Ongoing body corporate/strata fees (if purchasing apartments and units)
Australian permanent residents and citizens may be eligible to a first home owner’s grant. The grant is different in each state and may vary in each fiscal year. Check with the State Revenue Office in the relevant state for most updated details.
There are a number of financing options (loans/mortgages) available if you require them. It could be time consuming and confusing to navigate through the many different packages, interest rates, charges and fees offered by different lenders in the market. There are a number of home loans comparison websites that may help streamline the research for you:
You may also engage the service of mortgage brokers to help you through selecting the right loan package although it is still advisable that you do some of the looking yourself to ensure you are getting the best deal. Be sure you ask about all applicable rates and charges as lenders may structure their loan packages differently and the ones with lowest published interest rates may not afterall be the best deal. Lenders are now required to publish Comparison Rates which include interest rates as well as charges and fees.
Depending the type of property you are purchasing and your residential status in Australia, the amount you can borrow may vary. Consult your lender or mortgage broker to assess your particular situation, but be sure to have a minimum deposit of 20% of the purchase price.
It is advisable to have your financing conditionally approved or pre-approved so that you can bid at auctions or make offers with peace of mind. Pre-approvals are generally valid for 3 months which allows you reasonable time to look for a suitable property. To apply for home loan, lenders will require you to provide evidence of ID, income and other details around your current financial situation although actual documentation required may vary depending on your circumstances.
Finding the Property
Here are a few good websites to get you started with looking for your property and to get an idea of the housing market:
FIRB Approval (if required)
If you’re a non-resident or a temporary visa holder, you’re legally required to get approval from the Foreign Investment Review Board (FIRB) to buy property in Australia. Getting FIRB approval is a simple process and usually takes up to two weeks from the date the application is lodged. You won’t actually apply for FIRB approval until you have found a property.
You’ll need a conveyancer or a solicitor to complete searches on the property, manage the transfer of ownership and review the contract before you sign it. Your appointed conveyancer must be in the same state as the property you’re buying or at least be licensed to deal with that state. For Western Australia (WA), they are called settlement agents.
There are two main methods of purchasing property in Australia:
Properties are usually sold by auction when demand is high. If you are the successful bidder you will be required to immediately pay a 10% deposit and the contract will be unconditional as such before going to auction it would be advisable to ensure you are in a position to settle on the purchase.
- Private sale
A property is offered for sale at a negotiated price. The normal practice is for the owner of the property to set the price and you negotiate with them until a mutually agreeable price is reached. The terms of the contract can vary. Usually 10% of the purchase price is required as a deposit once the contract is signed.
Contract of Sale
Contract of sale is generally prepared by the agent or the owner’s solicitor. Ensure that you have your solicitor or conveyancer review the Contract of Sale before you sign anything. You will usually be required to put down a 10% deposit.
When you have found a property to purchase, you need to get formal approval on your loan/financing from your lender by forwarding them a copy of the Contract of Sale. Remember not to commit yourself to buying a property until your loan is formally approved, unless there is a cooling off period for the contract.
Final Arrangements and Settlement
Do a final inspection on your property on the day of settlement.
Settlement is the term used in Australia when the property actually changes hands and your loan is advanced. Settlement it handled by your conveyancer or solicitor in conjunction with your lender or mortgage broker, and you don’t need to be there for this to happen. The title for the property is held by your lender and the keys are available for pick up from the selling real estate agent.
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The content of this website is written and owned by Sterling Healthcare Resourcing Pty Ltd, an Australian-owned healthcare recruitment agency which specialises in permanent and locum job placements of Australian and international doctors. This website contains information that serves as a general guide to living and working in Australia.