Look for a property
Buying your first home is likely to be the biggest purchase you’ll ever make. You should take time to find the right property for you, and it useful to know the difference between the auction process and a private treaty sale.
What do I need to consider when I’m looking at properties?
It’s a good idea to inspect as many properties as you can in the areas that you feel suit your lifestyle needs. Think about the factors that are important to you. What services will you want to access easily: public transport, schools, health services, shops, cafes?
Do some research into the areas you’re interested in. What future developments are planned? How are the surrounding suburbs expected to grow in value? It’s important to get a feel for the market so that when it’s time to bid or make an offer, you’re confident that you’ve made the right decision.
What’s the difference between auction and for sale?
- An auction is a process where bidders bid on a property. Once the reserve price, set by the seller, has been reached, the property will be declared 'on the market' by the auctioneer. The person with the highest bid will then be offered the property. The highest bidder will have to exchange contracts and hand over the deposit, which is 10% of purchase price, immediately. There is no cooling off period.
If you’re planning to bid at auction, it’s a good idea to have a Deposit bond, which will act as a substitute for a cash deposit if you don’t have 10% deposit in cash. To find out more read Delay paying your deposit with a Deposit bond.
- For sale is a private treaty sale and usually has a fixed price. In a private treaty sale you will normally be required to pay a refundable holding deposit once your offer has been accepted.
Making an offer (for sale)
If your offer is accepted, you will normally be required to pay a refundable holding deposit to show good faith. This doesn’t mean the seller is obliged to sell to you or has to take the house off the market.
Once your offer has been accepted, your solicitor or licensed conveyancer will receive the Contract of Sale from the sellers’ solicitor. After checking there are no legal reasons on it that will prevent you taking possession, you will sign it and exchange contracts. On exchange you pay your 10% deposit.
Once you’ve exchanged contracts there is generally a cooling off period, this varies from state to state but is usually between 3 – 5 days (no days in WA). The cooling off period allows you to change your mind if you get cold feet.