The property market in the Hunter is currently very strong. We are finding our clients’ properties are being sold very quickly for their asking price, if not more.
If you are looking to get into the property market or need a bigger family home, it is important that you begin the application with your lender as soon as possible. This may involve you gathering bank statements, credit card statement, tax return, declarations in relation to COVID-19 affected business, values on your current home, letters confirming your employment etc.
Under the standard Contract of Sale for Residential Property a purchaser is entitled to a five business day cooling off period. Usually once an offer is accepted then a purchaser can pay an agreed 0.25% deposit, exchange contracts and have 5 business days to decide if they wish to proceed. If they do not proceed, they forfeit their 0.25% to the vendor. The cooling off period is often used by a purchaser to carry out building and pest inspections, review strata reports and confirm with their bank that finance is unconditionally approved.
Even if you have pre-approval, you need to obtain unconditional approval of finance before either your cooling off period or finance period expires.
Due to the Banking Royal Commission and COVID-19, banks are slow to approve finance, which can be the difference between you being a successful purchaser or not. This could result in you losing your 0.25% deposit and your dream home.
In today’s market, when looking for a property, you must be ready to go, as it is very likely a vendor will want you to waive your cooling off rights or may not agree to make the sale subject to you obtaining finance.
Lastly, please do not exchange on a contract if you have not had the opportunity to speak with an experienced property lawyer who has reviewed the contract. We want you to avoid a situation where you have bound yourself to a contract which you cannot complete – you could lose at least your 10% deposit.