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A Guide to Buying a Property in NSW

Updated: Oct 30, 2023


A property isn’t an everyday purchase, so buying a property can be complex, stressful, and perhaps a little overwhelming.


To make it a little less so, we’ve pulled together this simple guide to buying a property: all the things you need to know before securing your home

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Setting a budget


How much can you afford to pay? The bank or mortgage broker will more or less tell you what your budget is by outlining your borrowing capacity. But it’s also important to do your own budgeting, being sure to factor in stamp duty, inspections, lender's mortgage insurance (if you’re borrowing more than 80%), potential interest rate rises, upcoming lifestyle changes (e.g. having children) and other upfront and ongoing costs. There are a number of online calculators that can help you to bring all these potential costs together.


Getting pre-approval


Wait until you get loan pre-approval before you start shopping for properties. If you shop without pre-approval, you’ll waste everyone’s time and you’ll only be disappointed when your dream home gets snapped up by someone else. You’re essentially going shopping without your wallet!


Making an offer on a property


If your offer is too low you risk putting yourself out of the picture instantly. If your offer is too high you might be pouring money down the drain. Before making your offer, try to determine the true value of the property – though this can be one of the trickiest steps in buying a property. At Treak our Director has a background in property valuation and we have our finger on the pulse when it comes to property values, working in the industry every day. While online price estimator tools can be used as a very rough guide, their value range is usually huge and computer-generated reports rely on facts and figures like land size and value, previous sale price and recent similar sales. They aren’t able to look at factors such as the condition of the property, aspect ect and are unreliable in a fast-changing real estate market.


In non-auction transactions in New South Wales you’re required to make an official offer, which is usually done over email. This offer should include the total price, the deposit you will put down, and any conditions that you want to attach: e.g. repairs, building and pest inspections, etc.


The cooling off period when buying a property in NSW


The cooling-off period is the time after the contracts are exchanged where the buyer is permitted to pull out of the deal without needing to justify their decision. When buying a property in NSW, this is usually five days, and while you will need to pay 0.25% of the purchase price if you pull out, this is lower than the cost of buying the wrong house.


You can spend this time undertaking due diligence or obtaining unconditional approval from the bank, however at Treak we usually do these things before making an offer. Note that there is no cooling off period when a property is bought at auction.


Buying at auction


Speaking of auctions, how exactly do they work? First, you must register in order to be able to place a bid. When the bidding reaches the reserve price, it is considered ‘on the market’, as this is the minimum price the vendor will accept. If the property doesn’t reach the reserve, the property is ‘passed in’ to the vendor, and the highest bidder may get an opportunity to negotiate a sale price. If a deal can’t be reached on the day, the property is normally put on the market for private sale.


Techniques for bidding at auction

Looking to increase your chances of winning at auction? These tips and techniques might help:


  • Count the crowd: If there are a lot of bidders, a strong opening bid can knock much of your competition out straight away. If there are only a handful, it may be best to sit back and bid toward the end of the auction.

  • Be confident and emotionless: Know your budget so you can bid confidently and without hesitation. Keep your game face on – it keeps other bidders guessing.

  • Keep an eye on your competition: Read the body language of other bidders. Couples tend to talk to each other when they near their maximum, so this is the perfect time to place a knockout bid.


After you win an auction


When you win an auction, you and the vendor sign and exchange contracts. At auction this contract is unconditional – you take the property as it comes. Beware that there are significant penalties for pulling out of an auction sale. You could potentially forfeit your 10% deposit.


A lot of agents now use DEFT which allows buyers to pay their deposit electronically. All you need is your bank account details (BSB and account number), a valid email address, and sufficient funds. Otherwise you will need to speak to your bank about how to increase your transfer limit for auction day.


Property settlement


Settlement day is when solicitors arrange the transfer of the balance of the purchase price from the lender to the vendor, and usually takes place around six weeks after the exchange of contracts. This is when you’ll need to pay the outstanding amount to become the legal owner of the property. You’ll also get your keys!


What is stamp duty and when is it due?


In NSW stamp duty is the tax paid by the buyer to the state government when purchasing a property. The amount the buyer is charged depends on the purchase price.


In NSW you have to pay stamp duty within three months of signing a contract for sale. First home buyers now have a choice between paying upfront stamp/transfer duty or an annual property tax.


We make buying property easy


A property is likely to be the largest single purchase you ever make, and you might feel a little overwhelmed at the prospect. But there’s no need to stress if you get help from the professionals.


At Treak we’re passionate buyer’s agents. We love helping buyers find and secure their dream property at the best possible price. We have access to off-market and pre-market properties, we take care of all the due diligence and red tape, and we remove all the stress from the purchase process, allowing you to enjoy the ride.


Ready to find your perfect property? We’re ready to help. Get in touch today!


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