Players in the property market – for buyers
Buying a property is unlike any other purchase most people are likely to make in their lives. Usually someone makes or grows something, someone else sells it and someone buys it.
Most property transactions involve many more steps – and many more people. You and a seller engage in what at first appears to be a very straightforward (although massive) transaction that quickly turns fairly complex.
Not only must you comprehend the many loans that are offered, but you also need to be aware of the functions that other individuals may play in your home ownership journey.
Here is a list people you may encounter and the roles they each play in a real estate transaction. While you may not have to deal with all of these roles, it’s worth understanding how they all fit.
Real Estate Agents
These peculiar beings will be familiar to you if you have ever rented or purchased property before. And while you look for your dream home, you’ll be seeing a lot more estate agents unless you’re one of the lucky ones who is directly negotiating a sale with a property owner. Agents are easy to spot: slick suits or tailored jackets and below-the-knee skirts, and a shiny prestige car.
The primary responsibility of the estate agent, who works for the vendor, is to market and sell a property. This entails setting up private and open houses, organising print and web advertising, taking pictures, and serving as a middleman or woman between buyers and sellers. It’s uncommon to meet or communicate with the vendor in the majority of Australian real estate transactions until contracts are actually signed, and often not even then.
Almost always, agents are paid on commission based on a percentage of the sale price. They make more money the more they can get for a property when they sell it. It’s critical to comprehend this. Most agents are skilled salespeople. They’re super-friendly. They will look for locations that are appropriate for you to buy from. They’ll answer your questions right away. But they’re not working for you.
Nevertheless, putting yourself on their good books is a terrific method to learn about upcoming auctions and “off market” properties—that is, properties being sold without any publicity or open auction. Make yourself known to local agents at house inspections, and make sure they know what you’re looking for. Be cagey about your budget, but let them know you’re serious.
Valuer or Appraiser
Obtaining a valuation before making a purchase can prevent a great deal of grief. A lender may decide not to provide you a loan even if you have pre-approval if they believe you have overpaid (especially if it’s a private sale). Bad. It’s wise to first discuss obtaining an independent (or bank) valuation for a private sale with a lender or mortgage broker.
Auctions are different: most home loan lenders accept that an auction result is, by definition, a reasonable indication of market value.
Seller or Vendor
The vendor is ready to sell. It doesn’t hurt to ask the agent why the property is for sale, although you might not get a straight answer. Upsizing, downsizing, moving interstate or overseas, divorcing… all of these reasons come with a different urgency to sell. The more you understand a vendor’s motivation to sell, the more power you have if it comes down to negotiating a price.
Selling a property is expensive, time-consuming, and inconvenient. Thus, presume that they actually must sell.
Building/Pest Inspectors
Even though many buyers choose to buy without having a building inspection, it’s an excellent way to make sure there are no unpleasant surprises. The wiring, moisture, subfloor ventilation, plumbing, foundations, and other structural faults that could be costly to remedy later are among the things that inspectors examine.
For just a few hundred dollars you can determine whether you’re looking at a wonderful property, a money pit waiting to happen, or a place that may require some minor repairs before you move in. You may even be able to negotiate a better price with this knowledge.
Buyer Advocate
Professional home searchers are known as buyers’ advocates or buyers’ agents. They help buyers find properties that suit (considering area, price, and type of property), and assist in sales negotiation. Some are able to obtain inside information about upcoming properties before they are listed because they have a direct connection to local agents. They are also adept negotiators and bidders.
The majority of consumers purchase without the assistance of an advocate, however, it might be helpful in managing your time and travel, especially if you’re searching in multiple locations.
Conveyancer or solicitor
To help you navigate the settlement process, you must have a property solicitor or conveyancer (particularly on that thrilling and stressful day when bankers and lawyers get together to hand over large quantities of money and you end up with a set of keys).
While your conveyancer will represent you in the room during settlement, it’s a good idea to have someone on board sooner rather than later. Contracts and vendor statements are among the property documents that a conveyancer or solicitor should review.
Buying property is a big deal. Having someone assess the contract makes perfect sense.
Lender
To buy a home, the majority of us must take out a loan. So unless your mattress is filled with $100 notes (and lots of them), you’ll undoubtedly require a home loan. Although loans themselves can take many different forms, the concept is straightforward. The seller (or their bank) will get payment for the property from a lender, such as your bank. After then you owe your lender for the debt, which you progressively settle over the course of 20, 25, or even 30 years.
Low interest rates are a crucial factor, but loans can also include other benefits like offset, redraw capabilities, and connections to credit cards and savings accounts. Even while some or all of these options have higher fees or interest rates, depending on your situation, they may actually lower your overall payments.
Before selecting a lender and a loan, you should be aware of all of these possibilities and the advantages of fixed versus variable rate loans, as well as offset and redraw features. If you don’t, you could pay thousands more in interest over the course of the loan. Mortgage Broker Sydney can explain all of this.
Mortgage advisor
Mortgage brokers – including the experts at Mortgage Broker Sydney – work with clients to get the best mortgage for their unique situation.
We talk about your individual circumstances, debts, earnings, and spending habits. We consider the kind of property you are interested in and pair you with the more suitable loans.
If you purchase a property and enter into a loan, we are paid a commission by the lender. You don’t pay us anything for our services. In addition, we gather the necessary documentation for your loan application, assist you in filling it out, and even submit it for you.
We’re here to support you in making the process of buying a home as simple and stress-free as we can.
Speak to Michael or his team of Mortgage Broker Sydney loan experts.
Michael began his career in the finance industry over 35 years ago. He progressed through the ranks at the CBA in both retail and corporate lending, culminating in a senior position as a Corporate Relationship Executive. His decision to leave the bank in 2003 to become an independent mortgage broker was driven by his desire to assist everyday customers break through the jargon of the banking world and access the best loan products in the market. His experience is wide-ranging from helping first time buyers to large commercial enterprises. What Michael doesn’t know about home loans, simply isn’t worth knowing!