Buying a property is a big investment, and it can be even more daunting when you are purchasing it in a country that you don’t live in or have just moved to. Trying to make sense of the different regulations and processes can be challenging, so to make sure that you get it right without costing more than it should, it is worthwhile to invest in some help. In Australia there are several different resources and specialists that can assist you at each stage of the purchasing process.
Finding a Property
If you are buying a newly developed property or one off-the plan, then there is unlikely to be anything for you to inspect in the property. However if you are purchasing an established property, it may be wise to have someone to help you inspect the property and even help you select and purchase one if you are living overseas. This can save you time and money in the long-term, and give you peace of mind about the property you have purchased.
Buyers advocates exist to help select properties and negotiate a sale price on your behalf. There are many buyers advocates available in Australia and it is worthwhile doing some research to ensure they are reputable. One of the oldest is Morell and Koren, who generally have a good reputation. A buyers advocate will charge a percentage of the purchase price (usually between 1-2%) for their services, so it is worthwhile also doing your own research to ensure the price you are paying for the property is in line with the market.
If you want to have a look for a property yourself, a good starting point is a property search portal such as Realestate.com.au, Domain or Property.com.au. If you are in Australia, local real estate agents will also be able to direct you towards properties for sale in the area and can help you understand the property market in the region. However, remember that their aim is to sell you a property, so their opinion regarding a particular property may be biased.
If you have found an established property that you like, it may be worthwhile having an expert look over the property for any structural or pest issues. An organisation of architects that does inspections on behalf of buyers is Archicentre, who will prepare a report highlighting any issues for you. I used them when purchasing a house in Melbourne, and they helped me to identify that the envelope of my land was actually bigger than it appeared, thereby increasing the size and value of my property.
You can also obtain an independent valuation on the property, if you are not sure about it’s worth or have not found any similar properties to compare in the area. There are several different independent valuers offering services, and it would be good to find one who is familiar with the specific region you are purchasing in. A local real estate agent should be able to recommend some local independent valuers. To ensure the valuer is suitably qualified, ask for their credentials so that you can check they are certified with a reputable body such as the Australian Property Institute.
Obtaining finance in a new country is challenging, especially if you do not have any credit history in that country. Australia is no different, and it is worthwhile speaking to a few banks before going ahead with a purchase, as the risk and credit policies differ between them. It may be beneficial to use a mortgage broker to help you obtain finance, rather than trying to navigate the banking system alone.
A mortgage broker will already know a lot about the different credit policies of each bank, and may be able to guide you towards one that is open to financing people who have recently moved to Australia. They will also be able to do a lot of the paperwork for you, and should make the process of finalising the mortgage and getting into your property much smoother.
Generally the mortgage broker receives a commission from the bank that you finance with, which will be covered by the interest you pay. In many cases, this should not be reflected as a higher interest rate to you, but rather is absorbed by the bank, so it shouldn’t cost you any more money.
To find a mortgage broker you can check with the Finance Brokers Association of Australia or the Mortgage and Finance Association of Australia. Some large mortgage brokers in Australia include Mortgage Choice and Australian Finance Group.
Buying the Property
The legalities of purchasing property in Australia are governed by the States and Territories. This means that they will differ depending upon where the property you are purchasing is located. It is therefore important to ensure you have a conveyancer or solicitor who is located in the State or Territory that you have purchased in. They will run searches on the title deed, and ensure all the contractual requirements and paperwork are fulfilled, as well as liaising with the vendor. If required, they can also assist you in obtaining FIRB approval, which normally should be done before purchasing the property.
Whilst a conveyancer is generally less expensive than a solicitor, if you are located overseas or there are any unusual aspects to the purchase, then it may be worthwhile spending a bit more on a qualified solicitor. To find a solicitor, contact the Law Society in the State or Territory that you are looking at purchasing in.
Maintaining the Property
If you are not moving into the property straight away, or would like to rent it out, then it is worthwhile having someone manage the property for you. This will ensure that the property is looked after and any necessary maintenance work continues to be done on the property.
Most real estate agents have property managers on staff who will look after the property and arrange to lease it for a fee, usually between 5-7% of the cost of the lease. If you don’t want to lease the property many property managers will still look after the property for a monthly fee.
To make sure you can manage any taxation issues and make sure you get the most financially out of your investment, it is wise to find a good accountant You can find a chartered accountant in your region by searching here.
Whilst there is a lot to think about when purchasing a property in Australia, there is plenty of support available to guide you through the process and make it as smooth as possible.