If you want to buy an apartment, it’s likely that you already have some idea of where you want to live and what you believe you can spend.
Most apartment buildings are Strata Title. If you buy into one, you own the apartment and can buy and sell it as if it were a house. However, the whole building is under the control of an Owners Corporation, which takes care of maintenance and building insurance as well as collecting levies to make sure there is enough money to cover long and short term outgoings. You are responsible for your own Council rates.
A set of by-laws prescribes conduct for all sort of matters from noisy neighbours to storing your bike on the balcony.
Here are the practical steps to buying a place of your own:
1. Talk to a Lender
Before making any specific enquiries about a property, contact a bank, other lender or mortgage broker to help you get what you want.
Mortgage brokers help you find a home loan that you can afford and take care of a lot of legwork.
As well as the interest on the money, take into account that you should be prepared for:
- Stamp duty (though there are exceptions to this)
- Legal costs;
- The cost of searches and inspections;
- Owners’ Corporation fees, sinking fund contributions and liability insurance; and
- Contents insurance.
Down the line, the lender or broker can help you to organize a deposit.
Your lender will need to know if you are a first home buyer.
2. Talk to a lawyer
Lawyers who specialise in conveyancing will explain exactly what the contract entails, and can point out some features of the apartment that are not included in the deal (for example air conditioner and dishwashers).
Conveyancing solicitors also have reliable contacts to arrange a strata title search and a building inspection.
3. Obtain a Strata Search and a Building Report if Required
A Strata Search tells you what money is in the accounts and whether maintenance work or significant repairs have been done recently or are planned.
A Building Report looks at the condition of the building and identifies anything that may affect the occupants, including the need for fire upgrades, dampness, waterproofing issues and noise transmission.
4. Organise a Deposit
Make sure your home loan is approved and then organize a deposit on the property. Your lender or broker will help, and your solicitor may also have contacts.
5. Exchange and Settlement
Once your finance is in place and you have organized your deposit, you are ready to exchange contracts with the owner. This is handled by your lawyer.
Settlement day is the day you’ve been waiting for.
You have the right to inspect the property before settlement takes place, and sellers must repair any damage done between exchange and settlement.
It is advisable not to move in on the same day the property settles as this allows breathing space to resolve any disputes about damage.
