Navigating Contracts and Agreements as a First-Home Buyer

Buying your first home is an exciting milestone, but it also comes with a lot of legal paperwork and contracts that you may not have thought about when you were getting financial approval and finding a place.

To make things a little easier, here’s a breakdown of the contracts and agreements you’ll encounter as a first-time homebuyer in Australia.

The sale contract is the foundation of any real estate transaction.

It outlines the terms and conditions of the sale, including the property’s price, settlement date, and any special conditions. You’ll find details such as whether the home comes with features like curtains, air conditioning, security screens and a dishwasher, etc. The contract will also outline the documents you will receive as part of the sale (e.g. building certificates or evidence of swimming pool registration).

Read the sale contract carefully and enlist the help of a conveyancer to help you so you don’t overlook any game-changing clauses such as the seller’s belongings being left on the property. If you have questions, don’t be afraid to ask for clarification.

Be sure to look out for information about whether fences, decks and pools are compliant with regulations. If they are not, you should be clear on the cost of bringing them up to code.

As important as the sale contract is, the good news is that you are protected by the cooling-off period.

The cooling-off period comes after you sign the sales contract and allows you some time to ensure you have made the right decision. If you do change your mind during the cooling-off period, you should be able to withdraw from the purchase without any significant financial penalties.

You may lose a small percentage of the deposit, though, so it is still best to be as certain as possible before you sign a sale contract.

Cooling-off periods vary from 2 to 5 business days depending on the state, and if you are buying in Tasmania, there is no cooling-off period at all.

Ask the selling agent what is expected from you under the terms of the cooling-off period.

Your lender will provide a finance contract that outlines the terms of your mortgage, including interest rates, repayment schedules, and any additional fees. Ensure you understand these terms and seek advice from a financial advisor if needed.

It’s wise to request a building and pest inspection before the end of your cooling-off period or before you sign a contract of sale. Your real estate agent may supply one, but it’s recommended you arrange an independent inspection to be on the safe side. 

A professional will assess the property for any structural issues, leaks, water damage or pest infestations. You can also hire someone to confirm the pool and any additions like an outdoor deck are compliant with legislation; you don’t want to end up with a non-compliant structure that you have to remove or change at your own expense.

Once settlement is complete, the title deed is transferred to your name.

Along with conveyancing, this is the other part of the paperwork that makes the property yours.

The title deed proves your ownership of the property and is an essential legal record. Keep it in a secure place, as losing it can be complicated and costly to replace.

Before settlement, aim to secure home insurance to protect your investment. This insurance covers the structure of your home and its contents and should kick in on the day you take ownership. Shop around for policies that will cover your belongings and fit within your budget.

Your real estate agent can give you introductory advice about contracts, inspections, and other documentation but you will also need the help of other property industry experts like a solicitor/conveyancer, building inspector and potentially an accountant.

If you need help to find someone in your area, your local Professionals representative can point you in the right direction.

Want to know more about buying your first home? Get in touch today.