Startling survey results have been released by ME Bank recently where 325 prospective homeowners reported in on what they thought buying their first home would be like.
What the results suggested is that most of these home buying hopefuls showed significant gaps in their knowledge that could cause considerable financial and emotional pain if they were to go ahead and buy. This is especially worrying news with more first homebuyer having access to the property market.
To me the answer is as simple as getting your conveyancer into the game nice and early. Don’t know what a conveyancer is? Neither did two in three survey respondents who stated that a conveyancer was responsible for checking property boundaries and borders.
Actually you need to hire a licenced conveyancer in your state of purchase in order to transfer the property title from one person to another. Without them, you can’t go through to settlement. They will use online systems to organise payment to the homeowner and lodge the required instruments to the state government office so the sale can proceed.
If you pick a knowledgeable conveyancer they can also provide advice on sale contracts and investigate the legal aspects of the original titles to rule out instances of fraud. These extras can only happen though if you employ your conveyancer before you agree to buy a property.
Having a professional at your side is priceless in terms of reducing stress and avoiding grief.
For example, those who where surveyed did not understand that there is no cooling off period if you win a home at auction. They also didn’t know that an auction win requires you to pay the 10% deposit that same day (at the time of sale). Not having access to this crucial knowledge can really hurt, especially if the lending bank turns down your preapproved conditional home loan because of a disagreement on property value. You lose the home you love and your deposit all in one hit.
Even when you don’t go to auction getting a written letter handed over within the cooling off period is a challenge. The settlement period is not a cooling off period, nor is it a time that you can visit the property at your leisure. During settlement the property title remains the original owners and you are committed to buy.
Other parts of the survey revealed that while respondents had confidence in their ability to make buying decisions they lacked practice and support, giving them low financial literacy.
Another sore point was the meaning of lenders’ mortgage insurance. 85 percent of prospective homebuyers thought that because they were required to pay this insurance fee they would get the security of cover. Unfortunately the opposite is true. Yes the borrower is required to pay this fee but the insurance covers the lender against payment defaults if the borrower is unable to continue payments.
Many first home buyers only get an understanding of what they are buying when they read the sale agreement, which was shown to be especially true of the 150 people surveyed who have previously purchased off the plan investment properties. By this time it’s often too late to pull back or get help.
That’s where having a licenced conveyancer by your side before you sign the contract can really make a difference. They will know ahead of time what you are looking to buy and why, and make sure there is a match between the sale and your goals. They also know your legal rights so they’ll make sure your interests are fully looked after and translate into laymen’s terms anything that seems boggling.
While we have an entire internet worth of resources at our fingertips it can often be hard to filter the accurate information from the inaccurate and the current from the dated. That’s why hiring a professional will get you the results you need in the fastest, easiest and most rewarding way.
Buying a home, especially your first is far from easy. There are multiple factors to take into account from both a personal and legally professional angle. Having the knowledge and resources available to make a decision to buy on your own is a mammoth task that might take a long time to perfect. In a market that is always moving, hiring the right professional can give you the answers you are looking for quickly and effectively.
With limited knowledge and heightened emotion you are more likely to take steps in the wrong direction or end up with a result that will haunt you.
With a purchase as big and important as buying your first home, it pays to spend a little extra on getting legal advice from your first to last buying decision.