The decision to purchase your home or an investment property in Perth has been reached.

It could prove costly to an unrepresented buyer looking to ‘save money’ by negotiating a contract to buy a house or an investment property in Perth through a selling agent. It’s simply impossible to provide confidentiality and full disclosure to two clients with opposing interests in any real estate transaction.

There are various risks involved in purchasing an established property in Perth. One of those is covered in our article: Retrospective approvals pitfalls

Yet, Perth selling agents act as dual agents i.e. they represent both seller and buyer. You might decide to bite the bullet yourself and purchase the house in Perth without representation. Or maybe you’ll retain a buyers advocate to help you get the best value for money? Whatever you choose to do,  you’ll need to go through five main stages in the successful purchase of a property in Perth, Western Australia:

Search – Checklist
  • Where in Perth do you want to buy?
  • What type of property do you want to buy?
  • How can you find properties that match your criteria?
  • Prioritize your requirements.
  • Be prepared to compromise.
  • Don’t allow your heart to rule your head.
  • Search the newspapers and internet. If you are out of town, appoint a Perth buying agent to do the leg work short listing suitable properties.
  • View a property at least twice, at different times of the day, before expressing interest.
  • Check out the locality including roads, public transport, schools, shops, parks….. A buying agent in Perth will do the local authority search on your behalf, including development potential, re-zoning and other projects in the locality that can significantly impact on its value over time.
  • Ensure the property is not over-priced.
  • Compare the prices paid for other properties in the area where you are looking.
  • Get unbiased advice on what price to really pay.
  • When buying a house in Perth, research is your best friend.
  • For an investment property in Perth, buy where demand consistently outpaces supply.
  • Don’t wait for the perfect market conditions – they will never appear and you’ll miss out on significant capital growth.
  • Eliminate the stress and frustration of being shown too many inappropriate properties by Perth selling agents that don’t listen to the buyers’ needs. Consider talking to a buying agent in Perth to see how you can benefit of the buying agency services.
Finance – Checklist
  • How much can you borrow?
  • Beware that you may have to pay Lenders Mortgage Insurance if your loan amount is more than 80% of the value of your property.
  • Make sure you follow these steps:

    1. Calculate your deposit
    2. Calculate your borrow capacity
    3. Select the right loan for your needs
    4. Get pre-approval
  • Shop around for the best possible home loan you can afford, both in the amount of deposit required and in ongoing monthly payments.
  • Look at the fine print for monthly service fees and other charges.
  • There are some hidden costs of buying, such as stamp duty, mortgage insurance, settlement agent fees, building inspection etc.
Negotiations – Main Issues
  • Why is the vendor selling?
  • Is he desperate to sell?
  • How much is the property overvalued by the Perth selling agent?
  • Don’t be afraid to negotiate aggressively.
  • How low, price-wise, can you go without being dismissed as a time waster?
  • Cost of essential repairs and improvements that you would like to make?
  • Use these costs as bargaining tools before making an offer.
  • Make a list of these extra costs and present it to the selling agent.
  • Make sure you know what’s included in the asking price, and negotiate on anything extra you would like to be included at an early stage.
  • Get unbiased advice on what price to really pay before you make an offer.
Contract of Sales
  • In Western Australia all buyers are purchasing a property via a method known as ‘Offer and Acceptance’.
  • Beware: If you put an offer on a house in Perth and it’s accepted then you’re committed to complete the purchase unless the seller doesn’t meet a condition.
  • The Offer forms a part of the Contract.
  • Once the offer is accepted, it is a legally binding document, i.e. it becomes a Contract.
  • If the original offer is counter-offered, the original offer is no longer legally binding.
  • The counter-offer leaves the seller at risk of losing the buyer.
  • If your offer on a property in Perth is counter-offered, you should take your time and reconsider your position.
  • If you are buying privately, you are usually required to pay a deposit.
  • This can be anywhere between $2,000 and 10% of the purchase price.
  • If you are buying at an auction, you are required to pay a deposit immediately.
  • This is usually 10% of the purchase price.
  • It will be placed in a trust account until all conditions have been met.
  • All fixtures & fittings to be included as part of the sale (these are no longer free from stamp duty).
  • You need to declare the amount of finance and the financial institution.
  • It is very important to have the finance pre-approval arranged prior to this stage.
  • Specify the time frame in which the finance approval must be obtained.
  • This is usually 21 days or longer.
  • Do not try to make it any shorter.
  • Any special conditions are to be included as part of the offer.
  • The real estate agent in Perth will act as the ‘go-between’ until you and the seller reach a happy medium.
  • If you cannot agree on a price, you can withdraw your offer.
  • Make sure you do it in writing. Special conditions:

    • Subject to the sale of another property.
    • Subject to approval by the Foreign Investment Review Board (if you are an overseas buyer).
  • If you don’t have a visa, you can only buy off-the-plan property. There are some risks attached to buying off-the-plan property in Perth.
  • Subject to a satisfactory termite inspection.
  • For an older home in Perth, make your offer subject to a satisfactory building inspection.
  • Subject to all electrical and plumbing items to be in good working order prior to settlement.
  • Subject to all council and regulatory approvals on all extensions and renovations.
Settlement – Checklist
  • The Perth settlement agent now takes over.
  • You will need to organize formal finance approval within the specified time frame.
  • The Contract of Sale will state the amount of time you have to settle the conditions.
  • When all conditions are met, the offer becomes unconditional, the sale will go ahead and the property will be yours.
  • Please note: in Western Australia you will not need a solicitor, unless you want to use one.
  • The Perth settlement agent will do the conveyancing work at the agreed fee; usually between $1,000 to $2,500 but the fee can vary from agent to agent.
  • Your settlement agent is going to prepare a Transfer of Land document and arrange for your signature.
  • This will take place at least two weeks prior to the settlement date.
  • Your lender will be handed this document at settlement.
  • Upon registration the Perth property will be changed over to your name.
  • Your settlement agent will contact all relevant parties to arrange the date, place and time of settlement.
  • One week prior to the settlement you should be notified of the exact date, time of settlement and the amount of funds that you are required to provide prior to settlement (if applicable).
  • After settlement, the seller’s settlement agent will contact the real estate agent and advise them to hand over the keys to you.
  • Your settlement agent should contact you and confirm that settlement has taken place. They will also send you a Statement of Adjustment to show you how the funds have been disbursed to the parties involved.
  Property Buyers Services operates on a NO PURCHASE-NO CHARGE principle. For more information, contact Zana van de Graaf

Property Buyers Services