There are two main ways to buy a house - auction or private treaty.

Auctions

If the house you want to buy is being sold by auction, it's important you understand exactly what is involved.

Start by attending auctions of properties in the area or areas you are interested in. Houses being sold by auction usually have a reserve price, which is the lowest price the vendor (seller) will accept. The reserve price is confidential and known only to the auctioneer and the vendor.

If bidding does not reach the reserve price, the auctioneer will declare the property 'passed in'. Usually the agent will negotiate with the highest bidder straight after the auction to see if a sale price can be agreed upon. Convention often has it that the highest bidder has first right to negotiate with the auctioneer if the property did not reach the reserve price.

Ask the agent for an indication of the likely price range the property will bring, to see if the price range is affordable and matches the amount indicated by your financial supplier.

Read thoroughly the terms and conditions of the Contract of Sale and Vendors Statement. If you have any queries check them with your solicitor or conveyancer. You should satisfy yourself regarding the title documents which detail the names of owners and any encumbrances, mortgages, easements and caveats, obtain a full list of annual outgoings such as council rates and body corporate fees, and the zoning of the property. If your proposed property is zoned other than residential, or if there are any proposals for rezoning, consult your solicitor or conveyancer.

Also check details of any proposals by governments, councils or authorities that may affect the property - that is, there may be plans to put a highway next to the property. Also for council permits for any renovations, additions or alterations and if the property is under strata title, inspect a copy of the plan of strata subdivision.

When your Bid Succeeds

If your bid is successful you will be required to pay the deposit (usually 10% of the purchase price) right there and then. Immediately after the bidding, contracts are signed and the deposit is paid. There is no cooling off period. You are committed to buy. A bid made subject to finance is not acceptable to the auctioneer.

How to Buy through Private Sale

If you are buying through a real estate agency or directly from the owner, don't be rushed. Take your time. Ask questions. Check the vendor's statement with your solicitor. Make your assessment and offer what you think the property is worth. Toop&Toop is always happy to supply sales data. However as a buyer you must appreciate that the agent should do everything possible to maximise their vendor's sale result. After all, it is the vendor who pays their commission, not the buyer.

How to Make an Offer

This process involves the vendor, prospective buyer and a real estate agent who acts as the intermediary. The agent deals directly with the buyer and will take the buyer's offer to the vendor.

Remember that if you are asked to put your offer in writing in the form of a contract note, a binding contract will come into existence at the time the vendor signs the contract note. Also keep in mind that many properties for private sale have often been passed in at auction. You can check whether this is the case by asking the agent. This will give you an idea of what the house was passed in for and the reserve.

With private treaty sales, the buyer is also entitled to a cooling off period - usually two working days after the signing of the contract.

How to Buy A Home

The first step is to work out your design and lifestyle priorities. Consider the look you like and where you want to buy.

Be careful about what is and what is not included in the price of a property. This is especially important when looking at things like dishwashers, light fittings, barbecues, pool cleaning equipment, cubby houses etc.

Neighbours

If having the right neighbours is important to you, simply knock on their doors and see first hand what's in store for you.

Why you need a Conveyancer or Solicitor

Conveyancing is the legal transfer of property from one person to another. It involves a number of tasks and can be complicated and time consuming. In carrying out the conveyancing on your property, your solicitor or conveyancer is responsible for protecting your interests and will check the vendors statement, arrange a title search to ensure the vendor has the right to sell the property and whether there are any impediments to the vendor's title that need to be removed. They will also advise of any government duties on the purchase, prepare all necessary documents - such as transfer of land on behalf of the purchaser, calculate adjustments for rates, insurance etc and arrange all settlement details.

When you call on the services of a solicitor or conveyancer, it is advisable to ask what they charge and what the price includes. At Toop&Toop, we have a list of preferred suppliers in this field.