Buying Property in NSW - The Steps

Buying a property can be quite an overwhelming experience, especially if you have never done it before.

Here are the steps in buying a house, unit or townhouse in NSW:

1. Seek pre-approval on your borrowing capacity so that you know the upper price limit.
2. Appoint a conveyancer.
3. Start looking for that property.
4. If you find a place you like and intend to make an offer, send your conveyancer a copy of the contract of sale so they can review it.
5. Make a verbal offer on your chosen property.
6. If your verbal offer is accepted, the agent will ask you to sign the contract.
7. You will be required to pay 0.25% deposit upon contract signing and the signed contracts will be exchanged - you then have 5 business days as a cooling off period. Tip: Some agents will try to convince you to waive the cooling off period as a tactic to lock you in to buy - don't agree to this.
8. During the 5 day cooling off period, you need to (a) get your loan fully approved - send your signed contract of sale to your mortgage broker and the lender will do a valuation on the property before granting full approval, (b) get a building and pest inspection completed on the property if it is a house or (c) get a strata inspection report done to ensure that there are no big surprises if it is a unit or townhouse (your conveyancer will usually arrange this).
9. Before the end of the cooling off period, you will be required to pay the remainder of the 10% deposit (9.75%).  If you don't have the cash for this deposit then you can arrange a deposit guarantee with your mortgage broker.
10. You are now bound by the contract to buy.
11. Your lender's solicitors and your conveyancer will work with the vendor's solicitors to book the settlement date and calculate the exact amounts that need to be transacted - there will be some minor add-backs and deductions for council rates and other things.  You will also be required to pay stamp duty upon settlement - your conveyancer will include this in the transaction calculations.
12. If you are using your own funds to make up the total transaction then you will be required to provide the funding gap just before settlement date.
13. You inspect the property just prior to settlement
14. The property settles on the settlement date - and the keys are now yours!

Auctions
What we outline above is the process for buying via private treaty. It gets a little more interesting if you choose to go to auction.  

An auction in NSW requires that you pay the 10% deposit on auction day and you have no cooling off period. Consequently, your checks such as building & pest and strata inspections, need to be done prior to auction day. You are also at the mercy of the lender granting full approval after you win the auction and pay the deposit - this is where it pays to have a good mortgage broker who can understand the lending practices and provide great guidance.

Be sure to share this with any friends and family that may be looking to buy in NSW.