The sale process in Australia
Finding a house
In Australia you have two choices, buy established or build. To buy established, you can do so via private treaty or through an auction. Each State and Territory in Australia has different laws which govern real estate purchases, so research is unavoidable.
Building your home:
When you choose to build, you have two options;
- Buy an off the plan apartment / house which a developer is already in process of building. Usually requires a 10%-20% deposit and balance upon completion.
- Buy a block of land and engage a builder to construct your home. This requires split contracts whereby you settle on the land first under a contract and make progress payments for construction via a separate contract.
The sale process in Australia
Generally the process for buying a home in Australia is as follows:
Private treaty
Negotiate a purchase price through the vendors (sellers) agent. When accepted, pay a 10% deposit and agree to either a subject to finance term contract or unconditional cash contract. Some States allow for a 3 – 5 day cooling off period whilst others are unconditional upon acceptance of your offer by the vendor.
Agree to a settlement date. Appoint a Solicitor or conveyancing agent to act for you in arranging all documentation including liaising with your lender and various municipal authorities to transfer title into your name.
If financing, arrange a loan directly with a lender or utilise the free services of a mortgage broker who will negotiate a loan through numerous lenders to achieve the best loan for your needs.
Settlement usually takes place 30, 60 or 90 days from sale date.
Buying a home at auction
Some States (like Victoria and NSW) tend to favour the auction method. If you plan to buy at an auction, it is advisable to have finance pre-approved and do your research to ensure you set a realistic limit and not allow emotion to sway you to over-pay on the auction day.
At times it may be wise to avail yourself of the services of a specialist estate agent known as a buyers advocate. These agents are contracted to you for a fee and will do the research and even bid for you at an auction.
When bidding at an auction, the auctioneer will announce the rules under which the auction will be presented. This includes vendor bids (where an auctioneer can announce a vendor bid to continue a stagnated auction or to advance upon a bid if no other bidders are active)
A cooling off period is not available if buying at auction and generally auction rules will stay in force for three days after an auction has concluded with a passing in of the property for failing to reach reserve price.
A property that is passed in is available for private negotiation with the highest bidder for 10 minutes after the property is passed in before being available to all bidders for negotiation.
Upon successful bidding at an auction, the same process as with private treaty would be followed. Except the contract is unconditional and not subject to finance.
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