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Your questions our answer

I'd like to know how I go about being approved for a rental property when I've not had any previous history? It is quite hard getting a start as the market is so tough. - Brandon

Best place to begin is on the road. Go out to a few open houses and meet the Property Managers. Depending on the area and type of property, they will give you some ideas on how to put your application forward. Also, don’t be afraid to take on a short term lease so that you can prove yourself.

Is it worth renovating my bathroom before I sell? Some people tell me that the purchaser will want to do it up themselves and it could be a waste of money. - Sammy

The condition of the bathroom will be the factor when selling. Consider whether the purchaser will be able to live with the bathroom as is and renovate in a year or two. If not, renovating may be the best option.

If I’m looking to purchase at auction, what do I need to do in preparation? - Bella

Because the purchase of a property at auction is unconditional, you need to ensure that all searches, checks and finance approvals are conducted prior to the auction. The agent and your solicitor can assist you with arranging these. Your solicitor should also seek approval for any changes to the contract from the seller’s solicitor prior to the auction (such as length of settlement, inclusions or repairs).

You should bring the confirmation of any such approved changes with you on auction day and present them to the agent if you are the successful bidder. You should also bring an acceptable form of payment to the auction – either a personal or bank cheque. A bank transfer following the auction is not acceptable.

The agent can assist you in advance should you have any concerns regarding payment of the deposit. It is possible to pre-register to bid at an auction and the agent can assist you with this. If you wish to have someone bid on your behalf, whether you will be present or not, you should let the agent know in advance so they can give you the correct forms for authorising another party to bid for you.

You should always let the agent know well in advance of auction day that you are intending to bid as there may be last minute changes to the contract or other developments that the agent will need to inform all interested buyers about.

What happens on settlement day? - Sharon

On settlement day your solicitor and the buyer’s solicitor will forward to your agent notification that the property has settled. Once your agent receives these instructions in writing they are able to release keys to the buyer. The agent will not release the keys without first receiving these written instructions from the solicitors even if they have been verbally told that the property has settled. Your solicitor should also notify your agent of how the deposit funds are to be sent to you or your bank following settlement. These should be sent well in advance of settlement and you should allow a few days following settlement for the agent to be able to release these funds to you.

Am I obliged to reduce the tenant’s rent while I’m selling an investment property? - Maddy

You are not legally obliged to reduce a tenant’s rent to compensate them for the inconvenience of intrusions such as open homes. However, in unusually difficult cases, your agent may advise you to offer the tenant a temporary drop in rent in order to get their cooperation in presenting the property at its best. This reduction is totally discretionary.

Can I make an offer ‘subject to finance’ or ‘subject to building/pest inspection’? - Elliott

Generally, if you’re buying via private treaty (not at auction) you have the ability to set some purchase conditions. For example, you may be able to make your offer ‘subject to finance’ and ‘subject to pest and building conditions’. It’s a good idea to get your solicitor or conveyancer to look into this for you and give you advice.

When you make an offer subject to conditions you need to set a date that they expire. You’ll need to factor in the time it might take for final approval to be given. You should check that time frame with your lender too.

If the house you want is being sold at auction you probably won’t be able to make a conditional offer. Auction conditions usually state you must have the deposit on the day and finance secured. Even if you want to make an offer before auction, the conditions are usually the same.

How can I get a feel for what a property is likely to go for on auction day? - Emilia

The sales agent will be able to give you some guidance as to where an acceptable value lies, taking into consideration the interest from other buyers, the seller’s expectations, recent comparable sales and other properties currently for sale.

It is advisable to maintain contact with the agent leading up to the auction so you are aware of any changes in what the property will likely reach on auction day. The agent will also be able to give you feedback on whether the price you are prepared to pay is within the likely selling range. When determining what you’re prepared to pay you should consider where you see value compared to other properties.

How do I prepare my home to show nicely when ready to sell? - Fas

Best idea is to speak to your agent. They’ll know the area best and can help direct you according to the type of buyer you’re hoping to attract. Always best to have a clear space for buyers to walk through the home easily.

How much deposit will I need at auction and how can I pay it? - Adele

If you are the highest bidder at auction you will need to hand over a deposit of 10% of the purchase price on the day. This can be in the form of a personal or bank cheque – a bank transfer is not acceptable.

The deposit is paid to the seller’s real estate agent or solicitor who will place the money into a trust account until settlement, when the balance of the purchase price is paid. The interest earned on this deposit is shared equally between vendor and buyer.

What is a Section 66W Certificate? - Gretel (NSW)

An Unconditional Contract of Sale is accompanied by a Section 66W Certificate which your solicitor or conveyancer will provide you with. This effectively waives the five day cooling off period of the standard Contract of Sale for a private treaty sale, and the contract is unconditional once exchanged. This means there is no backing out without serious financial consequences! (NSW)

What do I need to do on open home days? - Rebecca

When preparing your property for an ‘open for inspection’ it is often a good idea to arrange furniture so that people can move through the home with ease. Any small valuable items should be placed away securely (thefts are extremely rare and the agent will be keeping an eye on your property but small items are the most at risk of going missing).

On rainy days leave out extra doormats or towels for people to dry their feet on before entering your home. If you have flooring that could be easily damaged by dirt or high heels you should ask the agent to tell buyers to remove their shoes. Make sure all windows, curtains and blinds are open for maximum light and make sure you heat or cool the home where possible.

What is a ‘vendor bid’ at auction? - Johnny

The seller has the right to make one bid themselves during the auction, which is known as a vendor bid. If the seller exercises this right the auctioneer will clearly announce that a vendor bid has been made.

You should view a vendor bid as the auctioneer’s indication that the current level of bidding is below the seller’s expectations. If you are intent on buying, you will need to bid above the vendor bid.

Can I make an offer to purchase the property prior to auction? - Emily

Some sellers will consider selling their property prior to auction for an acceptable offer while others will not. The agent will be able to give you guidance on whether or not the owner is accepting offers prior and in what form these offers will need to be made. In most cases any offers made prior to auction will need to be in the form of an offer on an Unconditional Contract of Sale.

The seller and the agent are not obliged to inform other interested buyers that the property is going to be sold prior to auction but in most cases will do so.

It is important to let the agent know that you’re interested in a property going to auction as soon as possible. Inform them of what you may consider paying so that they know to contact you if a sale prior to auction becomes likely.

Can I make an offer via email? - Fiona

Yes, email is a perfectly acceptable way of making a written offer! The sales agent will instruct you on what you need to state in your offer.

Do I need a building and pest inspection? - Quentin

It is highly beneficial to get both a building and pest inspection from an independent contractor before you purchase a property – it could save you plenty of money and a world of hassle down the track. If you sign a contract without checking the condition of the property, under the age-old legal notion of ‘caveat emptor’ (buyer beware) you’re stuck, regardless of what turns up after taking possession.

You will be provided with a written account of the condition of the property, informing you of any significant building/pest defects or problems. These reports should be discussed in detail with the inspector so you can be completely aware of the severity and potential costs associated with any issues highlighted. You can find specialist building and pest inspectors online or ask your solicitor/conveyancer to recommend one to you.

How can I get a feel for what a property is likely to go for on auction day? - Emilia

The sales agent will be able to give you some guidance as to where an acceptable value lies, taking into consideration the interest from other buyers, the seller’s expectations, recent comparable sales and other properties currently for sale.

It is advisable to maintain contact with the agent leading up to the auction so you are aware of any changes in what the property will likely reach on auction day. The agent will also be able to give you feedback on whether the price you are prepared to pay is within the likely selling range. When determining what you’re prepared to pay you should consider where you see value compared to other properties.

How do I gauge what price to offer on a private treaty sale? - Julie

When making an offer on a private treaty property you should consider where you see value as compared to other similar properties you have looked at. The sales agent will be able to give you some guidance as to what a realistic figure would be, giving consideration to interest from other buyers, the seller’s expectations, recent comparable sales and other properties currently for sale. Many private treaty properties are advertised with an ‘offers over’ figure or even a listed asking price to give you guidance. Note that you are able to make a lesser offer.

How do I go about bidding at an auction? - Phillipa

When you arrive at the on-site or in-room auction you will need to register as a bidder or have someone registered to bid on your behalf. You and they will require an Australian driver’s licence or other form/s of acceptable ID in order to register.

You will also need to have with you the ability to pay the deposit on the fall of the hammer. A personal or bank cheque is an acceptable form of payment. It is not acceptable to do a bank transfer following the auction. If you or your authorised bidder don’t have an acceptable form of payment with you the agent and auctioneer may refuse to register you.

At auction the highest bidder becomes the purchaser on the fall of the auctioneer’s hammer if the reserve price for the property has been met. The auctioneer will clearly announce that the property is selling to the highest bidder once the reserve has been reached and the seller has instructed that the property is on the market.

The purchaser then immediately enters into an unconditional contract to purchase the property and must pay a deposit, normally 10% of the purchase price unless a different amount has been negotiated prior. It’s important to note that there is no cooling off period when a property is sold under the hammer at auction and the contract is immediately binding.

Should the bidding on the property not reach the reserve set by the seller, the auctioneer will ‘pass in’ the property and begin private negotiations between the seller and interested purchasers. In this circumstance some sellers will prefer to negotiate exclusively with the highest bidder and try to reach an agreement on price and exchange contracts. If an agreement cannot be reached the seller may then negotiate with other potential purchasers including any that may not have been registered to bid at the auction.

Auction conditions continue until midnight on the same day once a property has been passed in, meaning that any exchange of contracts is unconditional and no cooling off period applies.

Make sure you know the maximum price you are prepared and able to pay and don’t exceed your financial capabilities at auction, because once the hammer falls, there’s no backing out.

How long will it take to process my application? - Jonah

Depending on how fast we can get in contact with your references and the Landlord. Make sure when you submit your application, all of your references know we’re calling so they can be ready to assist. We generally try to have an answer back to you within the week.

If I’ve accepted an offer, can I then accept a higher offer from another buyer? - Alfred

Once you’ve accepted an offer, you may still accept a higher offer from another buyer prior to exchanging contracts. Once contracts have been exchanged, you are legally obliged to follow through with the sale. Accepting an offer from another buyer after a written offer and acceptance is known as gazumping and neither you or your agent are obliged to compensate the gazumped buyer for any out of pocket expenses.

Is it advisable to use a mortgage broker? - Joan

Mortgage broking is big business these days, accounting for almost a third of all home loans. A mortgage broker can definitely save you a lot of hassle and often money, helping you to secure the best and cheapest loan to suit your circumstances. And they will often visit you at home, which is particularly appealing.

However a number of lenders are also now acting as brokers and some borrowers may be confused over whether they’re dealing with an independent broker offering a range of loans, an agent for one lender only, or someone who wears both hats.

There are several things to consider when choosing a broker and certain questions you should ask them. Firstly, are they independent or do they get a commission from lenders for selling their products? Make sure your broker discloses all commission and payments received so you can judge whether a particular loan recommendation is being influenced by how much the broker will be paid.

A broker should have a wide range of home loans from a wide variety of lenders – banks and non-banks. The wider the choice, the better the chance of finding the loan that best suits you. Ask your broker to provide a formal comparison of any loans recommended including the upfront and ongoing fees and the AAPR (average annual percentage rates). Ensure the AAPR is calculated specifically for the amount you want to borrow. Ask your broker how the loans they offer are researched and rated. Good brokers should be able to clearly outline their criteria.

Is the broker experienced and do they have the requisite qualifications? Are they an MIAA member? Do they charge a fee? Many brokers will not charge borrowers for using their service, others will, so enquire about fees at the outset.

Is it worth getting a Strata Inspection Report? - Lisa

Before you purchase a Strata titled property such as an apartment, townhouse or villa, it definitely pays to get a Strata Inspection Report. This will help you to fully understand the common ownership structure and related responsibilities so you can make an informed purchasing decision. These can often be done online and can be turned around quickly – sometimes within about 48 hours.

These reports cover details such as inspection of the Body Corporate’s books and records, any claims or insurance issues, any Strata Titles Act breaches or litigation, and pet regulations.

You can find out what the Strata levies are, where there are any special levies scheduled, whether or not the Strata scheme is adequately insured, whether or not there is any evidence of building or structural problems that may forewarn you of future expenses, or whether or not the Strata scheme has an adequate reserve of funds. Discover if there’s been a history of disharmony between owners and check the Strata regulations regarding issues such as renovation and refurbishment.

Should I be there during open homes? - Luke

It’s never advisable for a vendor to be around during open homes. Potential purchasers like to feel that they can inspect the home comfortably, open cupboards and discuss things freely among themselves without a vendor present. Your agent will be able to answer any questions buyers may have.

We always have two agents present at open homes and take a register of buyers’ details so that your home’s security is protected.

Should I engage a solicitor or is a conveyancer fine? - Karen

Once you have obtained a Contract of Sale from the sales agent, you will need to have it looked at by either a solicitor or a specialised property conveyancer. For a straight-forward property purchase a conveyancer will get the job done and may be a little cheaper than a solicitor, although not always. However conveyancers cannot give legal advice. If something on a legal front goes wrong then a specialist property solicitor can take action where as a conveyancer will refer you to a solicitor.

Should I get conditional loan pre-approved before purchasing and what does it involve? - Brittany

Most lenders will provide you with obligation-free conditional home loan approval which provides you with a good understanding of how much you’re eligible to borrow and what you can afford to buy. Importantly, pre-approval means that you’re ready to act with confidence as soon as you find the perfect property. It also shows vendors that you’re serious about making an offer.

Conditional pre-approval varies from lender to lender – some can provide it within 48 hours once you’ve provided all of the requisite paperwork while others take longer. They take into account your financial situation, the price range of the property you’re looking for, how much deposit you’ve saved, and your income and living expenses.

They are generally valid for about 3-6 months and if your conditional pre-approval expires, you can have it renewed, taking into account any changes in circumstances.
Once you have found a specific property to purchase, the lender will then need to verify your current financial position and see a Sale of Contract in order to provide formal loan approval.

Should I sell my property by private treaty or auction? - Charlotte

Both sales methods have their merits and may yield better results under different market conditions and for different properties. Ultimately the decision is up to you, however your agent will offer important guidance as to which method is likely to secure you the highest price and a quick sale in the current conditions.

A private treaty sale is usually offered to buyers with either a fixed asking price or a price guide asking for offers over a set figure or offers within a set price range. There is no set date by which a buyer needs to submit their offer.

When selling a property by auction there is generally a four-week marketing campaign followed by the auction day. No price is stated however agents will discuss with buyers a likely selling range with purchasers based on expectations from the vendor, feedback from potential buyers, competing properties and comparable recent sales.

In most cases a seller can accept offers and sell the property prior to auction, there are circumstances where this is not advisable, not practical or not possible and your agent or solicitor will point these out where appropriate.

What do I do if the buyer requests access to the property before settlement? - Mark

Buyers are entitled to just this one inspection prior to settlement – known as the pre-settlement inspection – to ensure the property is as per the conditions set out in the contract of sale. Your agent will be available to arrange access for this. You are not required to give any other access to the buyer prior to settlement however buyers will often request additional access for various reasons – wanting to take measurements or get quotes to prepare for work they plan to do after settlement. You do not have to allow this but may do so at your discretion.

It is usually a good idea to arrange your move from the property a few days prior to settlement as it must be completely vacant and clean on settlement day (unless there is an ongoing tenancy in place).

What does a pre-settlement inspection involve? - Steven

You are entitled to one inspection of the property prior to settlement to ensure the property is as per the conditions set out in the Contract of Sale. You should do a thorough check to make sure everything is as agreed upon and inform your solicitor if things are any discrepancies.

Liaise with the sales agent or your solicitor to arrange your pre-settlement inspection. The seller is not required to give you any other access prior to settlement but may choose to do so at their discretion.

What happens when I sell an investment property with an existing tenancy? - Grace

Selling an investment property with an existing tenant presents certain issues. Most importantly, the tenant has the right to break the lease if the property is offered for sale, unless they signed their lease with the knowledge that the property was to be sold.

Most tenants will be cooperative in helping to sell the property by keeping it neat and tidy – after all, if the new buyer is an investor, they will be more likely to keep those tenants on if they look after the property. However, some tenants are not always cooperative and resent the constant intrusion into their home for inspections and marketing. While a tenant is legally obliged to provide reasonable access for photography and open homes, they are not obliged to present the property in any particular manner.

Your sales agent is responsible for providing the tenant with the correct notifications. They should be notified 14 days before any marketing campaign begins and 48 hours before any open homes, which must not be conducted after hours, on Sundays or on public holidays.

What if I am the successful bidder at auction and want to back out of the purchase? - Arien

If you are the successful bidder, that is considered an immediate exchange of contract and is legally binding – you will be required to pay your 10% deposit then and there. Because there is no cooling off period it is important that you understand all of the conditions in the contract prior to bidding – you cannot make amendments to the contract after the auction. Make sure that you have a clear strategy before you go in so you don’t go over your head. If you back out of the sale after the hammer falls there will be serious financial consequences.

What if I make an offer and someone offers a better price? - Claire

Once you’ve made an offer, the seller may still accept a higher offer from another buyer prior to exchanging contracts. Accepting an offer from another buyer after a written offer and acceptance is known as gazumping and neither the agent nor the seller is obliged to compensate the gazumped buyer for any out of pocket expenses.

What if I purchase a property with an existing tenant? - Caroline

If you purchase a property where a tenant has an existing lease, you need to remember that you must honour the terms of that lease – leases are not voided simply because a property changes hands. You can only give fair notice or reason to terminate the tenancy if the tenants have violated the terms of their lease. You are also able to end a fixed term lease early if you have written agreement from the tenants. Remember, even when a lease is coming to the end of a fixed term, you must give the tenants 30 days written notice that you do not intend to renew their lease.

If you purchase a property with a tenant in place on an expired lease and you wish to have the tenant vacate prior to settlement you should notify your solicitor of this immediately upon exchange of contracts. It is yours and your solicitor’s responsibility to request any notices to vacate be sent to the tenant and the solicitors will instruct the agent accordingly. It is not the sales agent’s responsibility to initiate any notices to vacate without instructions from the solicitors.

If the tenant is to remain in the property the agent will contact you regarding management arrangements prior to settlement. There are benefits to buying property with existing tenants if you’re looking at an investment. You’ll start earning rental income from the property’s settlement date and won’t have to shoulder the costs of advertising the property to tenants.

What if my application isn't approved? - Georgia

If you’re application has not been approved we can keep your details on file with your permission and re-submit with another of our available properties. Once you’ve seen one you like, just let your leasing consultant know so they can adjust the details accordingly

What is a cooling off period and how does it work? - Jillian

Once you have made an offer on a property and contracts have been exchanged, you are given a cooling off period of five business days. This allows time to organise building and pest inspections, strata reports and other matters before you are unconditionally committed to purchasing the property. If you decide to pull out of the purchase during the cooling off period the seller is entitled to keep 0.25% of the agreed purchase price from your deposit. The seller can’t pull out of the contract during the cooling off period and cannot accept any higher offers or exchange contracts with another buyer.

However, it’s important to be aware that if you’ve made an offer on an Unconditional Contract of Sale, this cooling off period is effectively waived and the contract is unconditional once exchanged.

Some sellers will instruct their agent that they will only consider offers made on an Unconditional Contract of Sale. You cannot pull out of this contract without significant financial consequences so it’s advisable to ensure that all of your searches and inspections are completed before exchanging contracts. Your sales agent or solicitor can help you to arrange these check as quickly as possible.

It’s important to note that the cooling off period only relates to private treaty sales. There is no cooling off period if you purchase a property under the hammer at auction.

What is a Deposit Guarantee Bond? - Britta

Sometimes you may not have the ready cash for a deposit which can result in both you and the vendor missing out on a sale. In this case you may want to look at getting a Deposit Guarantee Bond (sometimes referred to as a Deposit Protect Bond). These act as a substitute for a cash deposit. The bond guarantees to the vendor that you will pay the deposit money as part of the full purchase price at settlement.

A number of lenders and specialised bond companies offer Deposit Guarantee Bonds, with both short and long term guarantees available to suit any settlement terms. Note that not all vendors or agents will accept these so do not rely on them to secure a purchase.

What is an offer on a Contract of Sale? - Nicole

Making an offer on a Contract of Sale is often a good way for a buyer to show you that they’re serious and ready to purchase, so you may choose to instruct your agent that you will only consider such offers. If an offer as set out in the contract is acceptable then you can go ahead and exchange contracts with the buyer. Under this method, once contracts have been exchanged the buyer has a cooling off period of five business days. This usually allows time for the buyer to organise building and pest inspections, strata reports and other matters before they are unconditionally committed to purchasing the property. If the buyer decides to pull out during the cooling off period then you are entitled to keep 0.25% of the agreed purchase price from the deposit and you can then negotiate with other buyers. Note that you cannot pull out of the contract during the cooling off period and cannot accept any higher offers or exchange contracts with another buyer.

What is an offer on Contract of Sale? - Brett

If you make an offer, you may wish to do this on a Contract of Sale. This shows the seller that you’re serious, ready to purchase and prepared to move forward immediately. Some sellers will instruct the agent that they will only consider offers made on a Contract of Sale. If your offer as set out in the contract is accepted the owner will exchange contracts with you.

Once contracts have been exchanged you have a cooling off period of five business days. This allows time to organise building and pest inspections, Strata reports and other matters before you are unconditionally committed to purchasing the property. If you decide to pull out of the purchase during the cooling off period the seller is entitled to keep 0.25% of the agreed purchase price from your deposit. The seller can’t pull out of the contract during the cooling off period and cannot accept any higher offers or exchange contracts with another buyer. However, the best way to show a vendor that you’re serious about purchasing is through an Unconditional Contract of Sale.

What is settlement and how does the process work? - Kerrie

On settlement day, which is agreed upon in the Contract of Sale, your solicitor will notify you that the property has settled, which means that you are now the rightful owner. Once the sales agent receives instructions in writing (verbally isn’t enough) from the vendor’s solicitor, they are able to release keys to the property to you.

What is the reserve price and how is it set? - James

The agent and auctioneer will ask you as the vendor to set a reserve price in writing prior to the auction – your agent will be a wealth of information in helping you to reach this figure. This is often done in the days leading up to the auction and is based on feedback given by interested buyers. You are under no obligation to sell the property until the reserve price is met or exceeded during the auction. It is possible for you to vary the reserve price during the auction if this becomes necessary. Your agent will discuss the possible scenarios where this may be the case.

What is ‘exchange of contracts’? What happens after I have exchanged on a property? - Michelle

A property purchase is sealed by exchanging contracts, which makes the sale legally binding. An exchange of contracts means that we hand the contract signed by you to the buyer’s representative and receive the form of contract, in identical terms, signed by the buyer.

The deposit must be paid or Bank Guarantee or Deposit Guarantee Bond handed over by the buyer at this time (if not already done). The contracts are then dated. Once this has occurred you are bound by the terms as set out in the contract and cannot negotiate any changes to it.

Once you have unconditionally exchanged contracts there are processes that your solicitor and financier need to finalise for the property to be able to settle on the settlement date so that ownership can pass to the new owner. Your solicitor can provide you with further information about this process.

When should I accept an offer prior to auction? - Danielle

Your agent will advise you as to whether it’s worth taking an offer made prior to auction or whether taking it to auction will likely achieve a better price. This will depend greatly on the offer made, the state of the market, the level of interest and the number of interested parties who are likely to be competitively bidding. Your agent will always present you with any offers made by buyers prior to auction, for your consideration.

Will you present all offers to me? - Micah

There are a number of ways a buyer can make an offer to purchase your property – verbally or in writing. A verbal or written offer and acceptance is in no way binding on you or the buyer until there is an exchange of contacts. Your agent is obligated by law to present all offers to you for consideration, no matter how unrealistic.

What is a section 27? - Joey (VIC)

A Section 27 is an early release of the deposit money when a purchaser has successfully bought a property and it has gone unconditional. This means that the deposit will be released to the vendor to enable them funds to move on with a potential purchase of their own. (VIC)