Investing Information: The purchase process when buying a new property with Momentum Realty

There are a number of steps you need to go through when buying an investment property with Momentum Realty. Below we lay out what those steps are so you’re prepared when it’s your time to buy. (This is a general overview and some details may change depending on the property you purchase and your individual situation.)

Purchase Phase

Once you’ve found a property that meets your requirements, and made the decision to proceed with the purchase, here’s what will need to happen next.

• Discuss your preferences with one of our licensed salespeople and decide if you would like to proceed with the purchase. They’ll be able to answer any questions you may have about the property.
• If you decide to purchase, you’ll sign a Sale and Purchase agreement which includes a Due Diligence clause that allows you to walk away for any reason after undertaking your research.
• During the 10-day due diligence period you will need to undertake any and all research to give you confidence to proceed with the purchase. This will include but is not limited to:
  • Arranging for a property lawyer to review the sale and purchase agreement
  • Arranging lending approval so you have the required funds to fund the deposit if required and to settle on the property once complete
  • Viewing other properties that the building company has completed and/or visit their show home
• On day 9 – 10 you will need to decide whether to proceed with the purchase or enact the due diligence condition and walk away. You will instruct your lawyer of the decision.
• If you decide to proceed with the purchase, you will need to pay the 10% deposit into the vendor’s solicitor’s trust account, where it will remain untouched until the property is complete and then will form part of the purchase amount.

Post-Purchase Phase

• Once the purchase has been finalised you will go ‘buyer unconditional’ on the property.
• If construction has already commenced, you will be given an estimated completion date.
• If construction has not commenced the builder will apply to the local council for building consent to commence the build. This may take up to 12 weeks.

Pre-Settlement Phase

• When you are 6 – 8 weeks away from the expected completion date, you will need to arrange preliminary meetings with professionals – accountant, lawyer, property manager
• Once the property is complete, the builder will apply to the local council for the Code Compliance Certificate (CCC) This is when a council inspector will visit the property to confirm it is built to the agreed consented plans and the building code.
• Your lawyer will be notified once the CCC has been issued.
• Your chosen property manager will visit the site to take photos and begin advertising for tenants.
• Once the CCC has been issued, you will need to liaise with your mortgage adviser and arrange for a registered valuation on the new property (this is a bank requirement).
• This is when your mortgage adviser will secure the required lending and fix the interest rates. Loan documents will be sent to your solicitor for signing up to 1 week before settlement.
• You will also arrange for a professional building inspector and chattel valuer to visit your property to provide you with a chattel schedule.
• You will need to set up a new bank account to manage the day-to-day income and expenses for your investment property
• You will settle on the property and pay the final instalment to complete the purchase. The first mortgage payment will be deducted from your nominated account 4 weeks after this date.

Hamish Cowan – General Manager – Momentum Realty