toon williams

When you buy a house in Australia do they use the same awful system we use here??

If not how does it work out there??

And what are the time scales from start to finish on average??

ABCDiamond

It varies depending on which State you go to, both in procedures and Costs.

HUP

In Vic you can choose your settlement period. We did a 30 day settlement. We arrived in Vic on 10th Nov and moved into our house on 20th Dec. We were lucky though

NIGENABBY

hello

The answer to your first question is NO NO and more NO. The system in the UK is the most cumbersome and stressful thing I have ever come across!!

Most houses are sold via Auction - so don't be put off by this because I understand that the UK only sells 'unsellable' properties by auction. Auctions are either conducted on site or at a more central venue eg a hotel at night. Auctions are final, there is no cooling off period, so if you don't get a survey done (not that common in Aus) you cannot go back and re-negotiate the price. I don't know about other states, but in Victoria when the auctioneers hammer goes down it is considered a contract - you have bought the house.

The other way homes are sold and this again should not be taken as a sign of the properties saleability is a private sale. Essentially the property is on the market at a given price and you negotiate down. Here is a little more like the UK system, however once the offer is accepted you are expected to sign the contract and organise a settlement date.

Some positives are;

You know exactly when you will get your property - 30, 60, 90, 120 days

As a seller you know what the price is the buyer cannot come back

Some Negatives are;

Auctions are incredibly stressful, you are in direct competition

People often get carried away, set your limit, it is very easy to let your heart rule your head

There are a number of Aussie television shows on Auctions (as this seems to be a very foreign process in the UK) on Sky 250 one is Hot Auctions, the other Location, Location.

Worth a bit of a look even if the prices are totally outdated the process is the same.

Good luck

toon williams

Ok thanks for that information, very useful!! We are moving to Adelaide, so do you think it will be the same there??

Timber Floor Au

Wellll.... in Brisbane this is what we did.

We went with RAMMS as they offered us the best self cert deal we could get.
Self Cert means you dont have to produce accounts, and show wages history, ideal for 1st time buyers, and new immigrants.

We showed proof of funds available. Our Ramms guy went and looked at the house we wanted to buy, got it valued, and came back within 3 days. With positive Offer.

We went to a solicitor, and got all formalities sorted.

...going back to house buying.

1. look at house you like. Fall in Love, agent will be with you. Say I WANNIT !! They will whisk you back in their car to offices.
2. they call seller, and propose your written offer.
3. seller agrees
4. they fly round and get written agreement from seller.
5. house is yours subject to financials.

When we say yours, we mean YOURS, pay a small deposit, they usually ask for 10% ish, give em $1000 and say BE HAPPY !

6. get a solicitor
7. Get your financial guy ( we chose Ramms )
8. Agent will ask when dya wanna move in, we said erm..... 4 weeks ??
9. agent laughs and says why not 2?
10. you choke and say bugger it make it 3 weeks lol

11. you tell mortgage company when you are moving in.
12. get your reports done:
Pest report
Building report
Pool report

Thats about it , and none are MANDATORY

13. sign some more paperwork.
14. arrange for your funds to be transferred as per mortgage proposal.
15. move into the house on the exact day and time YOU specify.

If owner or you disobey, then you CAN get heavily penalised. An offer here is a formal contract.

Plus dont forget to apply for first homeowners grant, think its about $7k. All new Homeowners ( 1st time buyers ) are eligible

Ozzy

JohnAndNetta

We did the equivalent of 'exchanging contracts' on our property in Brisbane in May. We negotiated a long settlement period (Sept 9th is our 'completion' date). We managed to get to the exchange contract point in only 5 days. This included appointing solicitors, building inspection, pest inspection, 'heavy' negotion with the seller which involved many crossings out and re-writing on the contract note. Looked like a spider had been crawling all over the page when we finished with it.

In contrast.....we agreed a price with our UK buyer and 10 WEEKS LATER!, (sorry for shouting) after 2 surveys (on a brand new build property with 10 year NHBC guarantee!) and what seemed like 28 visits later they pulled out with no reason whatsoever. My guess is they couldn't get the finance (hence the two surveys which were for valuation purposes only).

What a waste of ten weeks. We were very lucky in the end to find a buyer who had only one other buyer in his chain, he gave us a 5k non-returnable deposit (once bitten - twice shy), got the survey done in 2 days, had his finance agreed two days later then exchanged contracts and completed on the same day. What an absolute treasure this guy was - he must have some Australian blood in him somewhere.

Seriously though, the Ozzie system is about a billion times better than the UK crap we had to go through....

Netta

Pomster

The UK process is awful and here it is pretty straightforward.

We spent some time going to auctions to get a feel for prices/what you get for your money.
As the house market has gone off the boil, auctions are waning in popularity (if only 2 people are bidding, the price is not going to go too far) and there are far more private sales.

We saw a house we liked, made an offer, it was accepted.
An hour later we gave $100 deposit (we were not intended to buy a house- only groceries) signed a contract.
We requested a survey- being very British- which was added as a handwritten clause.
Get loan agreed
Agreed on a settlement date of 30 days
Hurriedly gave notice on our rental place.
Appointed a conveyancer.
Applied for first time buyers grant.
Paid up, moved in 30 days later.

Fuss free- unlike the stupid UK system. We are trying to sell a house and this has been on going since June, and still can't say 'we have sold'- well not until the money is in the bank!

hevs

This is not just a British thing its a very necessary thing

Its also worth pointing out that here (in vic at least) anything you don't hand write into that contract prior to offer mean you could be in the poo. That offer becomes your contract so if there are ANY concerns no matter how seemingly trivial write them down. For example ours had a dodgy fence, we wanted it repaired before we moved in. We should have also written that the tight lazy gits keep the pool in swimmable order 4 days before our first blazing hot Xmas and the pool was thick in green alge And with hind site certification of septic tanks and grease traps be cleaned sometime in the last 15 years!!

Sorry i'm going off on one But its just to stress it is important....

Pomster

Actually one of the reasons we wanted a survey was because of a cautionary tale of a work colleague.

He bought his house 2 years ago and was enjoying a barbie in his brick built BBQ. Suddenly the structure sank into his garden...turns out whoever built the house failed to connect waste water pipes to the sewer and all grey water was just collecting in the soil under the house and made a huge swampy mess.
With that in mind, a survey seems a small price to pay!

hevs

OMG!! This is too close to home. We had a council inspection on our septic and waste system yesterday and it seems like the concreting (horrible red tiled stuff) has been put over a good half of the sand filter. Whats worse is the drainage pipe looks like its situated under the pool :scared:

However the council bloke blanched a bit when i asked him that if.....

A: the council had given the permission, inspected it, and signed it off, and

B: We didn't build it or have anything to do with it being put there whatsoever,....... whos liable to get it sorted??

Hes calling me back :scared:

chels

Sorry, but if I am spending $100,000s I want to know that it is structurally sound, has no pest problems and that any additional items like a pool have been built well and maintained properly so that they're actually worth the money that I'm spending.

If you sign a private sale contract/pay a deposit and then have a building report done that finds there are lots of problems, what comeback do you have? Can you still negotiate on the price? Or pull out if it's a disaster? Can you have a clause written into the contract that covers this?

I also got the impression that you have to do your reports before you bid at auction - in which case you could spend hundreds of dollars on surveys which are a waste of money if you're not succesful in securing the property. That's what I don't like about this system.

I've been told that many people don't get surveys done before auction, which seems a huge risk to me. The other week I read about someone passing an auction while out on a drive and deciding to bid for the property - and winning it! Gulp - all I can say is that he must have had a lot of money to take such a risk.

Auctions seem a bit of a con anyway - most of them seem to be 'passed in' so the vendor can sell afterwards for an inflated amount of money. Or people get carrried away and spend thousands more than it's actually worth (or it's reserve price anyway)

NickyC

With private treaty sales, you normally get your building/pest inspections done after your offer has been accepted but prior to signing contracts (and handing over the deposit). So no money changes hands until the buyer is happy to proceed. It only takes a few days to organise inspections so contracts should be able to be signed within a week or so.

With auctions, yes, you do have to get the inspections done before bidding starts. This is a drawback for buyers - but some vendors organise and provide recent building and pest reports to prospective buyers. Up to you, if you want to do your own, as well.

Auctions are great for vendors in a rising market. Always dreadful for buyers. I've been both - don't have much choice if you've wanted to buy in Sydney's east over the last 10 years!

chels

Thanks for that - I feel a bit less worried about the process now that I know it works a bit like the UK and you can arrange inspections before signing contracts for private treaty sales.

Pomster

When we agreed to buy our place, we handed over $100 as a token deposit, but stipulated that a full deposit would not be paid and purchase would not progress if our building survey was unsatisfactory. So we arranged a local builder to inspect, he gave us a report and only then did we hand over the full 10pct deposit.
Don't worry- just have your special terms added to the standard contract.