If you are buying a property who are the different parties involved ?
Purchasing a property usually has about 7 different parties involved. Here is a list of who may be involved in your home-buying process and how you can use this valuable knowledge base to answer your questions.
Real estate agent
When you are buying a property, remember the agent works for the vendor and not you. They have an obligation to try and get the vendor the highest price possible which means try and convince you to pay as much as you can.
Conveyancer or Settlement agent
The legal aspect of a property purchase is taken care by a licensed and qualified conveyancer. In “the old days” settlements were organised by solicitors/lawyers. In Western Australia, settlement agents have a separate qualification and can manage settlements on your behalf. Their role is to prepare the documents to ensure that transfer of ownership of the property has met the legal requirements in your state or territory.
If you are buying a property, your settlement agent will liase with the vendor’s settlement agent to make sure they have all the information required. Your settlement agent will also liase with your lender to make sure settlement occurs in a timely manner. If however you have a more complicated structure which needs legal advice, you should probably speak to a property lawyer to answer your questions as settlement agents can’t give specific legal advice.
Pest and building inspectors
Even if you are buying a brand new property, a pest and building inspection is recommended. Organising a pre-purchase inspection is essential. If the property requires structural, wiring or repair work, these inspections can stop you from making a costly mistake or, if the property is still your dream home but just needs a little work, can provide a valuable bargaining chip.
If the building inspector finds something major such as structural issues, either the vendor corrects the issue or you can cancel the contract.
A valuation is usually ordered for a property purchase. The lender will arrange for this to be done so they are comfortable knowing that you haven’t overpaid for the property and/or there aren’t any possible issues such as environmental issues like being close to high voltage power lines or a freeway. If these issues are highlighted, depending on the Loan to Value Ratio, the bank may decline in lending on that security.
Valuers are usually very streamlined in their process. Once the valuation has been ordered by the lender, the valuer will make contact with the selling agent to gain access to the property. In most cases, the tenant will grant access with in a few days and the valuer will complete their report on that day.
Most people will need a lender. If you are reading this from the Orange Finance website, you are more than likely in need of some finance and hence a lender. In most cases this is likely to be a bank, whether it be a major big 4 bank or a second tier bank. You can have a look at www.www.orangefinance.net.au to see some of the lenders we use.
This is both insurance for the bank and insurance for you. When you purchase a property, a condition of settlement is for you to arrange building insurance listing the lender as the “mortgagor” or “interested party”.
Since you have increased your liability, you should also have a look at your personal insurance to make sure if you get injured or sick, and you can’t go to work, you have some level of cover to pay the mortgage and living costs.
Mortgage Brokers (that’s me) act as a liaison between you and the lender. My job is fundamentally to make sure you can afford the loan. Then I make sure the loan is the best one for your circumstances. If you want to have a further look about the process, have a look at How to get a home loan?