Buying your first home usually stands as the single largest financial commitment you’ve made thus far. Once you’re committed to the idea of buying your own home, it’s important that you do sufficient research and gather as much relevant information so that you enter into the purchase agreement and mortgage responsibilities with your eyes wide open!
As buying property is a legal process, you may be exposed to legal jargon and terminology that you are not overly familiar with. We’ve compiled a list of 4 must-know terms and information that will help you to make informed decisions and navigate the process with confidence:
- The cost of buying a house:
Deciding on what your budget is should be the starting point for any first-time homebuyer – ensuring that you can afford the property whilst still being able to meet your current financial obligations. First-time buyers should, however, also be aware of the initial financial outlay which includes a number of service and tax costs that are due and payable as part of the purchase process. The following are a list of costs that you are likely to encounter:
- Stamp duty;
- Legal and conveyancing fees;
- Insurance and finance costs;
- Building and pest inspections.
- Stamp Duty:
The amount of stamp duty payable is dependent on the value of the property and the state you’re buying in. Each state has its own stamp duty rates however, the general rule is that the more expensive the property, the more stamp duty is payable. Do enough research in this area prior to committing to a purchase to ensure that you have sufficient funds by using a stamp duty calculator relevant to your state.
- Cooling-off Period:
Once you’ve exchanged contracts and paid the deposit, you have secured a financial interest over the property. The cooling-off period is a brief period during which you can withdraw from the contract for whatever reason.
- Exchange or contract exchange:
This is a critical point in the property purchase process as it’s at this point that the agreement to buy/sell the property becomes legally binding. The ‘cooling-off’ period means that the exchange is conditional until the expiration of the cooling-off period.
Being informed and prepared will help to facilitate a smooth purchasing process and avoid any nasty surprises. Be sure to do the research and approach your property lawyer with any questions relating to the property purchasing process that are unclear.