New South Wales is Australia’s most populous state, with both the highest average house and unit price in the country and many suburbs exceeding a million-dollar property value. With so much competition, buying real estate in NSW can be a tough prospect, but with proper planning, it can be accomplished with little to no stress. Before purchasing property in NSW, it is critical that you understand the various options available to you.
A Private Treaty sale is a typical residential real estate transaction. This is when a seller, or homeowner, determines a value for their property and their real estate agent negotiates with potential buyers directly to reach a sale as close to that price as possible.
Buying at Auction
An auction is a public sale regulated by strict rules and performed by a licensed auctioneer. There is a reserve price, which is the lowest price at which the home can sell; if bids exceed the reserve and you are the highest bidder, you must sign the contract right away.
Buying by Tender
Tendering for property in NSW is a procedure in which you make a single bid, which is subsequent to a 5% or 10% deposit, and the seller accepts or refuses it.
Buying off the Plan
Purchasing a home off the plan means you are paying for something that has yet to be built. It is possible that the house will turn out differently than you expected. It does, however, come at a lower cost than many other properties.
Financing a Purchase in NSW
When deciding a budget and how much you can borrow, CIA Real Estate Home Loans will assist you. They will help you understand how much you can afford as a deposit ranges from 10% to 20% of the purchase price.
Hidden Costs in NSW
You should be mindful that buying a home in NSW comes with many hidden costs. A summary is provided below, but a complete list can be found at the Office of State Revenue.
Once you understand the costs, you’re ready to secure a home loan. CIA Real Estate Home Loans can offer you a wide range of products to suit a number of incomes. We can help you weigh up all these costs and give you a clear idea of what you can borrow to buy NSW property.
Finding Property to Buy in NSW
It is important that you do your research on the suburb you’re considering purchasing in. Here is a brief list of tools to get you started:
Then you can decide whether to purchase an existing home, an off-the-plan unit or house, or something completely different. The Department of Housing’s A-Z of Buying is also a useful guide.
Importance of Inspections
Make sure you thoroughly inspect the property. Here are some inspection tips to keep in mind as you walk through the property.
Click here for a checklist for an apartment and here for a checklist for a house inspection.
It is also advised to have a pre-purchase building / pest inspection performed on all properties you are serious about purchasing, as this can save you thousands of dollars in the long run.
After you have found a home you are interested in and want to make an offer. Make sure you have considered how much you are willing to pay, how much you can afford, and whether you want to go in high or low.
You must make all offers and counter offers in writing and sign them. The agent is legally obliged to forward all offers to the vendor as soon as possible. The seller must then decide whether to accept or decline the offer. The sale price is negotiated until both parties reach an agreement on a final price. If your offer is accepted, you have a five day cooling off period during which you can withdraw from the sale.
In NSW, auctions are regulated by strict guidelines. To bid, you must first register with the vendor’s agent and receive a bidder number. The auctioneer is in charge of the proceedings, and all potential buyers’ bids are recorded. The seller will generally set a reserve price before the auction starts, and if the bidding reaches the reserve, the property will be sold at the fall of the hammer.
The seller is also permitted to make one bid called a vendor bid which the auctioneer will announce. If you are the highest bidder, you have to sign the contract of sale right there and then and pay your deposit (normally about 10 per cent). Also be aware, there is no cooling off period.
Contract Exchange and Settling the Sale
After purchasing property via private treaty or auction, you should seek advice from a solicitor or conveyancer as the seller and buyer exchange signed sales contracts. The buyer usually has a 5-day cooling off period in private treaty deals. There is no cooling off period for properties purchased at auction. This includes the sellers.
Settlement is the completion of the sale transaction and typically occurs 6 weeks after the contracts are exchanged. Contact your local CIA Real Estate representative if you have any further questions or want to learn more about getting into the NSW property market.
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