Buying a house or an apartment in NSW FAQ’s

What are the different types of property I can buy?

Australia has six main property types on the market, so you have a range of options to choose from. They include:

1. Stand-alone houses
2. Semi-detached houses
3. Duplexes
4. Terrace houses
5. Townhouses
6. Apartments

To read more about different types of property you can buy and the features of each click here

When is the right time to buy a house or an apartment?

When ready. You don't have to buy at a certain time of year or age. You want to buy when your finances are in order, your bank has approved your loan, and you have discovered the perfect home for your family. There are, however, four major property cycles to keep in mind.

To read more about timing your property purchase click here

What location features should I look for when buying a property?

• Is the neighbourhood family-friendly? Are there any nearby parks or facilities you could use? Is it warm and inviting? Local bars, restaurants and cafes? Check the crime rate as well.
• Are there good schools? Pay attention to public school catchment areas or private school catchment areas nearby.
• Does it have good connectivity to highways, train, and bus networks. Water and internet access are also important factors.
• How close is it to amenities?
• Are there any developments that could impact the location?

For more information into key location features and why it is so important when buying click here

What professional property inspections do I need?

• Professional building inspection: The inspector will examine the property for faults or concerns like mould or damp. It also covers wall cracks, safety hazards, and roofing issues.
• Pest inspection: identifies vermin, termites, and other pests. The pest inspector will examine for existing harm as well as potential future damage. The home's inside and exterior will be evaluated.
• Pre-settlement inspection: This is done at the end of the process to confirm that all contractual requirements have been satisfied and that the property is in the same condition as when purchased.

What are the key costs of buying a property?

Here are the average costs you should take into consideration:

• Conveyancing and legal fees $1,800
• Stamp duty. To see how much you would need to pay click here.
• Building and pest inspection $500-600
• Mortgage registration fee, approx. $180
• Property valuation fee, approx. $500-600
• Loan application fee, approx. $500-600
• Lenders Mortgage insurance if you borrow more than 80% of purchase price, $8,000
• Council and utility rates, varies depending on location, minimum $500 per quarter
• Ongoing mortgage administration fees, $5-15 per month

What is stamp duty and when do I pay it?

Stamp duty is a state-imposed tax on top of the mortgage, deposit, and other fees associated with buying a home. The amount you must pay depends on whether you are a first-time homebuyer (they pay lower stamp duty), buying an existing house, a new home, or vacant property. The amount is also dependent on your state or territory, the property's purchase price, and any applicable exemptions. Stamp duty must be paid within 3 months after the completion of the transaction. For more information click here.

How much home loan deposit do I need to buy a property?

That will depend on both the lender’s conditions and your own, but you can generally put down 5%, 10%, or 20% of the property value. A greater deposit means a smaller loan, saving you money over the term of the loan, and it can also lower your loan's interest rate. Essentially, the more money you have, the better your chances of getting a loan.

For more information on home loan deposits download our buying eBook

What information do I need to apply for a home loan?

Every lender is different, but you’ll generally need the following:

• A primary photographic ID (passport or driver's licence), non-photographic ID (birth certificate) and a secondary document (Medicare card or utility bill)
• A copy of your bank statement with your last two salary payments, or recent payslips, or a letter from your employer
• Documentation for any shares, property, automobiles or other important assets
• Personal loans, credit cards, store cards, leases
• Living expenses such as gas, groceries, utilities, entertainment, insurance, clothing, childcare, internet
• Rent details if you don’t currently own

Talk to a home loan specialist to find out more.

What are the main types of home loans?

• Owner occupier loan: The borrower intends to live in the property; lower rates than other loans; allows you to refinance your existing loan to a newer loan with a reduced interest rate.
• Investment loan For people who want to buy a house to rent out, these loans have higher interest rates and are harder to get.
• Low doc loan: For those who lack the required income documentation; they have a higher interest rate.
• Reserve mortgage allows asset-rich but cash-strapped homeowners (typically over 60) to dip into their property's equity.
• Construction loans for a new or renovated dwelling are supplied in six stages, from deposit through completion.

To talk to a home loan broker click here.

Can I buy a house with no deposit?

No. You must have a deposit. But if you’re strapped for money, the following are some ways in which you can come up with a deposit:

• First Home Owner Grant can form your deposit
• The First Home Super Saver scheme allows you to access your superannuation to pay your deposit
• A guarantor – a family member or friend who can offer their own property as a security
• A financial gift from your parents or other close contacts that will cover your deposit cost

Can I use my super to buy a property?

Yes, you can use your superannuation, but you need to be within one of three groups - first home buyers, property investors, and over-65’s / retirees.

First home buyers can access their super under the Federal Government's First Home Super Saver Scheme. Investors who are members of a Self-Managed Super Fund (SMSF) can utilise funds to purchase an investment property. Seniors above 65 years, or retirees who have reached the “preservation age” can use super to purchase a home if you have complete access to your superannuation. There are stipulations for each so talk to your accountant or financial advisor.

How do I bid at a property auction?

When you register for an auction on the day, you'll get a paddle with a bidder number. This paddle is required to bid. Keep an eye on your competitors. If you find they have stopped paying attention, the bidding has definitely gone beyond their budget. Don't get caught up in the excitement and over-bid. Stick to your budget and don't be scared to bid in smaller or greater amounts. Be confident at the end of the auction.

For more detail into how to buy a property at auction click here

How do I make a pre-auction offer when buying a home?

Pre-auction offers allow you to jump in early and escape the auction's stress. To do so, you must submit a written offer to the real estate agent before the auction (generally 1-2 weeks before auction day). Before making an offer, conduct your homework on the area market and similar sales. Talk to the real estate agent about your intentions to buy the property before the auction.

For more detail into how to buy a property at auction click here

How do I buy a property via private treaty?

A private treaty sale is when the seller lists the property for sale at a particular price. This sale price will be determined after considerable research into the local market and discussion with the real estate agent. Buyers are requested to submit official written bids to the agency. If your offer is accepted, you will sign and exchange the contract. Private treaty sales in NSW have a 5-day cooling off period. Unlike an auction, you can negotiate a sale price and terms with the seller or real estate agent.

For more detail into how to buy a property via private treaty click here

How do I negotiate a private treaty sale?

Have the Contract of Sale evaluated by a licenced conveyancer or solicitor as soon as feasible. Complete all pest and building inspections to ensure you know what you're buying. Get pre-approval from your lender in writing to prove you can afford the negotiated amount. Having pre-approved credit will also give you a competitive advantage. Set a budget and don't overextend yourself. Begin below your walk-away price and raise offers as needed.

For more detail into how to buy a property via private treaty click here

How do I buy a property via expression of interest or tender?

Expressions of Interest or tender campaigns are used in real estate to get buyer interest without listing a price. These campaigns normally have a four to six week deadline for the property owner to sell. During that time, potential buyers can schedule a private viewing or a home inspection. If you want to buy the property, you can submit a single (your best) bid before the deadline. Written terms such as preferred settlement date or inclusions are normally included. As the closing date approaches, the real estate agent and the seller will go over all the offers to see who will buy the house.

For more detail into how to buy via expression of interest click here

How do I buy an apartment or house ‘off market’?

Know the property's market value. Make sure you've done your homework and know how much the property is worth. Consider hiring a buyer's agent who is familiar with the region and can help you negotiate. Make sure you’ve done your homework, including building and pest inspections, and that your lawyer has examined the contract. Make all official offers in writing and be willing to negotiate and be flexible.

For more detail into how to buy a property off market click here (anchor to section on buy guide page)

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