Your Real Estate Investment Guide To Buying Property - How To Easily Get Through What Has To Be Done With Your '15 Step Guide'
Your Real Estate Investment Guide to buying property works through the process of dealing with Lenders, Solicitors, Property Conveyance, Contracts, Insurance, Inspections, Finance and more...!
But don't worry the - 'Real Estate Investment Guide - 15 Steps to Property Ownership' will help you get through the process easily and relatively stress free.
Hopefully what can be daunting for many will turn exciting.
Certainly experience has taught me that when I understood what is supposed to happen, and when, it suddenly removed the unexpected and became far more enjoyable. To help you with buying your first home or investment property I've outlined in your Real Estate Investment Guide - 15 steps to home (or investment property) ownership and the order in which it generally happens.
By being familiar with the process it will certainly provide a greater peace of mind and personal control of the whole purchase process.
So your Real Estate Investment Guide - 15 Steps to property purchase'
Calculate the two factors of Capacity and Security to discover the answer to the question,
'How Much Can I Borrow'
You can do this with a hand calculator, visit your friendly accountant, use a web site home loan calculator or perhaps the best option, use a loans broker to discover how much you borrow in the first instance.
By using a
you can then easily have them conduct a Best loan analyses for you and your circumstances and obtain pre-loan approval.
A broker will highlight the pros and cons of any lender and help you choose the BEST loan for you!
Their simple yet sophisticated software will illustrate what loan type and structure will meet your requirements so that you choose that absolute best available loan for you.
A good broker should avail you immediate access to more than 30 lenders Australia-wide and can identify those lenders most likely to accept your loan application and particular circumstances.
The use of a repayment calculator will quickly discover how much you can afford to pay off your loan on a weekly, fortnightly, monthly basis.
Because the loan application process requires accuracy and completeness, plus a 100 point identification check it is very important that it complies with the lenders requirements on application. Because any rejection of finance is recorded, a broker will help you ensure that the paper work is complete and finished on first application.
Once an 'in principle' loan figure is approved by your chosen lender, you'll receive a pre-approval certificate which enables you to go house-hunting knowing just how much you can spend. This is the exciting part of your Real Estate Investment Guide - 15 steps to the property purchase process
Consideration of what you will use as a deposit should also be discussed here. Deposit Bonds are great for
buying investment properties
Evaluate and nominate the RIGHT investment property or home. Be assured that it is very common, especially in a rising property market, that people’s circumstances don't always meet with their expectations.
Because of this you must ensure that you are aware of your budget, borrowing capacity and financial status before sourcing any property to save you lots of time in looking at the wrong property. When you know exactly what your price range is you can confidently look for and
evaluate the right investment property or suitable home
before then making a contract offer on a property with complete peace-of-mind.
Once you've found the property that you think is right for you and it is going to be yor home, go ahead and obtain a copy of the vendors contract of sale.
If this is an investment property, you must, ABSOLUTELY MUST run the figures through some
Investment Analyses Software
because your investment runs on figures. If you want to argue with this simply have a chat to your loan lender about repayment figures.
And if you allow me to offer you this one hint as you step though your Real Estate Investment Guide, and that is; "Just do the analyses or have it done", because it can save you a whole lot of grief that you just may not see coming with certain properties. - ...end of sermon!
If and only if the figures compute should you then obtain a copy of the vendors contract of sale.
If your unsure or want to see how the figures apply to buying rental property that has been professionally selected, you can (if you live in Perth)
attend a dedicated strategic workshop
that is personalized by using your exact figures and details.
Now this step in your Real Estate Investment Guide can be a little confusing for some in the property purchase process in that they are unsure whether they should use a solicitor, legal representative or conveyancer to review the contract?
Basically all can do the job but it really depends on the possibility of any complications that may need the survices of a solicitor. For many, settlement by a conveyancer is adequate. - Provide your broker with a copy of the front page of the exchanged contract.
Have your selected solicitor or legal representative (Conveyance Company) review the contract which includes the handling of the contracts and conducting the relevant searches. You can source your own, use any recommended agency or solicitor of your friends of family or use a Solicitor or Agency that I've personally used or happy to recommend.
At this stage the lender will value the property as part of their loan approval process. Sometimes your lender may rely on the contract price to be its value.
It should also be remembered here that a lender is not the decider of what is a fair price to pay for a property. When a lender conducts a valuation during the property purchase process, they do it for their risk assessment and loan approval only, not to provide you with a market valuation.
It is your responsibility to know your purchase and its fair or market value. If you have done your research then you will most often know the approximate value on the open market. If you are in doubt then you can have a valuation done by an authorised valuer as per step 8.
A big part of step 6 of your Real Estate Investment Guide of the property purchase process is arranging for inspections that you want on the property such as pest, building, strata or surveys or be guided by your solicitor recommendations.
At some stage during your property purchase process you will make an offer to buy the property but only do it if inspections are OK. Or if you feel the need to make your offer early, most contracts can be subject to conditions, particularly private sales, however this can sometimes depend on what State of Australia that you are buying in. Obviously your first source of advice on this will be your realestate agent.
You may be able to sign your contract 'subject to a finance approval' or 'valuation' if buying privately or other stimulated condition like passing a 'satisfactory building/pest inspection', or perhaps 'sale of your current property'.
In some states you may need full finance approval prior to signing and 'exchanging contracts'. It is best to refer to your solicitor or Conveyance agency for guidance in these situations.
You should also source home and contents insurance and place at the very minimum a cover note on the property as soon as you have signed any contract for purchase. Again check with your solicitor or Agency for guidance in this matter.
Step 8 in your Real Estate Investment Guide is to arrange a property valuation if needed and formal approval of your loan. The normal property purchase process will see your lender/broker prepare your Loan/Mortgage documents and send them to you directly. Should you have any questions regarding the loan documents at this point, your solicitor or conveyance agency should be able to answer them.
You will then execute the documents and return them to the lender. Please advise your broker when you have returned the documents as the contact should then be made to the lender to ensure they are actioned as soon as possible.
Pay a stipulated deposit (normally 10%) and exchange contracts
This part of the property purchase process can be nerve racking for some but if you have followed the steps in your Real Estate Investment Guide closely up until now, then you'll be organised, calm and collected - if not a little excited.
Complete the mortgage documentation with your solicitor or conveyance agency. Your solicitor or conveyance agency will liaise with the Lender and vendor to arrange settlement.
Step 11 of your Real Estate Investment Guide is to arrange your home building and contents insurance. At settlement the property must be insured with the lender’s name noted on the policy.
And while it is always recommended that you have your own insurance, this may be an opportune moment to investigate your level of Life Insurance cover, particularly so as your debt level rises.
Life is full of surprises and as an investor preparation should be treated as a necessary task. Term Life insurance offers a way to replace the loss of income that naturally happens if the unthinkable should occur. To find out if you need a medical exam or even get an online quote you should visit a dedicated
Term life insurance
Settlement, obtain your keys and take possession of your new property. The property purchase process is almost complete. The lender will contact you as soon as the loan accounts have been activated. This will see your loan drawn down and your lender/bank will send a welcome letter with your loan details.
Ensure that your loan repayments are organised as requested – and more importantly that they really do suit your lifestyle and needs.
As soon as the full approval of your loan, subject to any conditions that you stated on the contract are satisfied, the property can then be transferred into your ownership and you will get the keys. This can take anywhere up to 6 to 8 weeks.
Household services such as phone, electricity, gas etc then become your responsibility or that of your tenant and these will need to be organised for the connection of these services upon settlement or tenancy. Don't forget, home building and contents insurance over your property and landlords insurance if you are renting your property out.
Step 13 while unluky for some won't be for you if you've followed your Real Estate Investment Guide and should be your most exciting. Yes this is where you 'Move in or Rent out' - Just a reminder, don't forget landlords insurance!
So time to move into your new home or rent your new property investment! Make sure that the services have indeed been connected and familiarise yourself with the water and electricity mains to ensure hot water and emergency cut off can happen quickly if ever required. All keys, security codes, window locks etc should have been handed over to you on settlement day via your agent. Now pop the bubbly and enjoy. Congratulations.
Meet the neighbours. Critical to any neighbourhood goodwill is the meeting of the neighbours and what better or more appropriate time to do it then at the end of the property purchase process when you first move in.
experience. Now that you have been through the Real Estate Investment Guide - 15 steps to property purchase, pay your experience forward with your own investor profile. That is, help others achieve what you just have.
Just like what you are reading here or if this happens to be an investment for you then feel free to share your story on this web site. Other budding investors really do like to read of others in the investment game and your story will definately relate to and help someone.
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