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  1. #1
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    Default Help! How do I buy a house

    So DH and I have found a house we like that we want to put an offer on. I've seen a broker so I know what we can afford and its well within that price. But, we're first home buyers and we have no idea what we're doing. Reading through the contract and the building and pest inspection report there's a couple of things I'm worried about and I'm not sure how to to about it.

    The main things that worry me is that the pergola hasn't got building approval and there's evidence of wood rot in parts of the pergola and a tree. The report also recommends a full building and pest inspection once the building is cleared.

    Can I put an offer in subject to a full inspection? Or does that get negotiated after our offer gets accepted and put in the contract. See I have no idea!

    (I'm in the ACT).

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    We purchased a home in the ACT last year. Having moved from Qld we were stunned at how different the process is.

    In the ACT the purchase is not binding until exchange of contracts - which can take a few weeks after your offer is accepted. Until contracts are exchanged another buyer can make a higher/better offer and the seller can accept that and you are out unless you renegotiate. Equally you can withdraw before that time with no consequences.

    So I would make the offer first to see if you are even in the ball park. Once it's accepted you can talk to your lawyer about making sure you are satisfied with the condition of the property before exchange of contracts.

    Best of luck! Buying your first home is an exciting time 😄

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    smallpotatoes  (20-01-2016)

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    ur offer is usually subject to building and pest I would knock a few grand off ur offer due to pergola I.e $2k to knock down ask for that off purchase price or state in contract u want it removed before u move. they can always say no so be prepared if there are other parties interested in the house u need consider that the pergola may not be an issue for them and the sellers are always gonna take the best deal for them if that makes sense

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    Quote Originally Posted by Cherry18Bloss View Post
    ur offer is usually subject to building and pest I would knock a few grand off ur offer due to pergola I.e $2k to knock down ask for that off purchase price or state in contract u want it removed before u move. they can always say no so be prepared if there are other parties interested in the house u need consider that the pergola may not be an issue for them and the sellers are always gonna take the best deal for them if that makes sense
    See that's exactly what we were expecting being former Qld. But it is totally different in the ACT.

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    Default Help! How do I buy a house

    Im in NSW and I "think" ACT is the same , you can't do it subject to anything, you get 5 business days once you sign a contract to sort out finance and building stuff and you can pull out for any reason but will lose your . 25% of the price but the owner is locked in and can't pull out

    As you already have a building report ( that I assume was obtained by the owners) I would try negotiate the price to factor in the cost and the drama of getting the pergola approved ( if needed) and depending on what the pest report says exactly , wood rot is quite common and wouldn't bother me if its just in the tree and can be cut out or repaired in the pergola UNLESS the report stated there are active pests or fungus in the house or is posing a risk but mention it when you make your offer

    Hopefully you can get hold of recent similar sales in the area or know what those type of homes are selling for and base your offer on those but before offering anything ask the agent:

    How long as the home been on the market? ( if longer than 30 days the owners may be more willing to drop price)
    What offers have you had?( this will give you an idea of what the market thinks)
    What price would the owners agree to accept? ( they may not tell you but you will get an idea of their price before you mention what you are willing to pay - as some times they want less than you think!)

    Based on the response I would make an offer that you are comfortable with

    The agent and your conveyancers can answer your questions about the contract and coolingoff
    Last edited by Elijahs Mum; 20-01-2016 at 16:33.

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    Quote Originally Posted by Elijahs Mum View Post
    Im in NSW and I "think" ACT is the same , you can't do it subject to anything, you get 5 business days to sort out finance and building stuff and you can pull out for any reason but will lose your . 25% of the price but the owner is locked in and can't pull out

    As you already have a building report ( that I assume was obtained by the owners) I would try negotiate the price to factor in the cost and the drama of getting the pergola approved ( if needed) and depending on what the pest report says exactly , wood rot is quite common and wouldn't bother me if its just in the tree and can be cut out or repaired in the pergola UNLESS the report stated there are active pests or fungus in the house or is posing a risk but mention it when you make your offer

    Hopefully you can get hold of recent similar sales in the area or know what those type of homes are selling for and base your offer on those but before offering anything ask the agent:

    How long as the home been on the market? ( if longer than 30 days the owners may be more willing to drop price)
    What offers have you had?( this will give you an idea of what the market thinks)
    What price would the owners agree to accept? ( they may not tell you but you will get an idea of their price before you mention what you are willing to pay - as some times they want less than you think!)

    Based on the response I would make an offer that you are comfortable with

    The agent and your conveyancers can answer your questions about the contract and coolingoff
    In the ACT you don't pay a deposit until exchange of contracts which comes long after an agreed price. So either party can pull out at any time for any reason prior to exchange with no financial consequences. It is apparently not uncommon for buyers to have agreements on multiple properties. It took us 3 weeks to get from an accepted offer to exchange of contracts!

    The owner must provide a building report - but if you go through with the purchase you end up paying for the report. Our experience has been the report is not worth the paper it is written on. Also the EER (energy efficiency rating) which ACT properties must have is also a bit of a joke.

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    Default Help! How do I buy a house

    Quote Originally Posted by binnielici View Post
    See that's exactly what we were expecting being former Qld. But it is totally different in the ACT.
    far out why is it so different. yep we are in qld. sorry OP hope I haven't confused u.
    GL with the house 👍
    Last edited by Cherry18Bloss; 20-01-2016 at 16:38.

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    Default Help! How do I buy a house

    Quote Originally Posted by binnielici View Post
    In the ACT you don't pay a deposit until exchange of contracts which comes long after an agreed price. So either party can pull out at any time for any reason prior to exchange with no financial consequences. It is apparently not uncommon for buyers to have agreements on multiple properties. It took us 3 weeks to get from an accepted offer to exchange of contracts!

    The owner must provide a building report - but if you go through with the purchase you end up paying for the report. Our experience has been the report is not worth the paper it is written on. Also the EER (energy efficiency rating) which ACT properties must have is also a bit of a joke.
    Wow see here if you put in an offer we get you to put it in writing ( sign a contract with a deposit cheque) then present it to the owner and they can say yes or no - if they yes they sign it and exchange on the spot then you get 5 days cooling off - otherwise guzumping would happen too often - thankfully we auction 95% of our properties so don't have that problem!

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    We bought our house privately, but when then contracts were drawn up, we asked for it to be subject to a building/pest inspection and obtaining $x finance after the bank had valued the property. There was a date put on both of these that we had to adhere to. If we were unhappy about anything in the building report we would have been able to pull out or renegotiate, same with our ability to obtain finance. We also got lucky and the people we bought our house from didn't ask for a deposit.
    All the best with your house purchase OP! Its such an exciting time!

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    Quote Originally Posted by binnielici View Post
    We purchased a home in the ACT last year. Having moved from Qld we were stunned at how different the process is.

    In the ACT the purchase is not binding until exchange of contracts - which can take a few weeks after your offer is accepted. Until contracts are exchanged another buyer can make a higher/better offer and the seller can accept that and you are out unless you renegotiate. Equally you can withdraw before that time with no consequences.

    So I would make the offer first to see if you are even in the ball park. Once it's accepted you can talk to your lawyer about making sure you are satisfied with the condition of the property before exchange of contracts.

    Best of luck! Buying your first home is an exciting time 😄
    Ahh this makes sense. I studied property law in QLD (many moons ago) so I was getting confused between jurisdictions and the process and what the broker was telling us.

    Thanks everyone for your advice! We're getting excited! Our offer is on the low side so might not be accepted but DH and I figure it's worth putting it out there in case!

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