You’ve just purchased a property… what happens next?

Congratulations! The hardest part is done. Once the excitement settles down, you will need to focus on the items that need to be completed in order to be ready for settlement.

This exciting time does come with a fairly lengthy and systematic process that at times can be confusing and complicated. Below provides a snapshot of what needs to take place before you obtain the keys to your property.

Deposit and Contract of Sale

If you have purchased at an auction then you need to pay a deposit, generally 10% of the purchase price within three business days. On auction day you can transfer a holding amount of around $1,000 using your phone. The outstanding balance can then be transferred on the next business day via EFT.


A conveyancer needs to be involved in t arranging the correct documentation and distribution of monies at settlement. Both legal parties work with the bank to ensure all land transfer docs are signed correctly and the settlement monies are distributed correctly. No settlement can take place without a conveyancer involved.

Finance and Mortgage Contract

 Following the purchase of the property, you will need to get formal approval from your lender. To achieve formal approval, the lender will need a valuation on the property. The valuation will be ordered by your Mortgage Broker and generally takes place within 3 business days. Once Formally Approved, your Mortgage Broker will help you navigate the loan contract to ensure you understand the loan you are obtaining and sign the required documentation correctly.


In the week leading up to your settlement, everything comes together. Your conveyancer will ensure that the settlement date, time and place is agreed to by the lender and the vendors conveyancer.  You will be required to make sure any additional monies needed at settlement are sitting in your nominated ‘settlement shortfall’ account ready for access on settlement day.


Settlement is essentially the transfer of a property from one owner to another. Typically known as at the end of the purchase process whereby you take legal possession of your new home. In a nutshell, settlement is when the buyer transfers the remaining balance of the purchase to the seller and the seller passes on the title or ownership to the buyer.

This is a very important event which needs to be carefully prepared for and once this process has been successful then it is time to pick up the keys and celebrate!



Buying a property with friends

If you’re looking for a creative way to overcome being locked out of the property market by rising prices, buying a house with a group of friends may be a solution to consider. It can also be a minefield though, so here’s how to avoid a blast.

While the excitement of banding together in such a life-changing moment can put everyone on a bit of a high, you need to plan for situations in which things might go wrong.

It’s essential you have all been completely upfront from the start about what you want to achieve by purchasing property together, as well as your personal expectations about timelines for purchasing the property, paying it off and selling it. And all of this must be documented in a co-ownership agreement.

Your mortgage broker can refer you to a solicitor or conveyancer with experience in working on co-ownership agreements, who can advise and create yours and make sure it’s suitable for your circumstances, whilst providing the necessary legal protection for everyone involved.

The big question will be what structure your ownership takes. There are two options: joint tenants and tenants in common. Joint tenancy is the most common ownership structure in Australia, as it is how most family homes would be owned.

However, because friends are less likely to share assets and long-term debts than a couple, and less likely to will their assets to each other, the ‘tenants in common’ model would usually be more suitable for this situation.

Under this model, each person owns a specified share of the property’s value. These shares may be equal, but don’t need to be. So, if you are willing to contribute $500,000 to the price of a property, but your two friends are not quite at that stage and only comfortable contributing $250,000 each, you could own a 50% stake while they each own a 25% stake. Keep in mind that each stake is in the property’s value, not control of the property. Legally, under this model, each owner has the right to full access to the entire property.

The co-ownership agreement created in collaboration with your conveyancer should set out how the costs of maintenance and insurances are divided, as well as how sale proceeds will be divided.

It should also cover plans for depreciation and capital gains tax, selling a share of the property to another co-owner, choosing tenants or determining rent, selling a share of the property to a third party (otherwise there are no restrictions on this under the tenants in common model), and selling the property altogether.

If all purchasers are planning to occupy the property, the agreement should make plans for if one wants to move out but continue their ownership. Under the tenants in common co-ownership structure, the other owners occupying the property would not be obligated to pay rent to the one who has moved out, as long as they are not restricting that co-owner’s access to the property.

As is the case with any property purchase with any structure, each co-owner should have an up-to-date will that specifies who inherits their stake in the property.

There are many more considerations when buying property jointly, so speak to an expert early on to make sure you’re doing it the right way.

What to consider before renovating

The decision to renovate is a common sticking point for homeowners, who can spend hours weighing up the cost benefits. Whether your motivation is to add value to your property or to add a touch of your personality to the home, renovations are expensive and debt often follows. It is important to find the right solution that benefits your long-term goal, rather than hindering any future plans.

A survey by found only 27% of homeowners think refinancing their home loan to renovate is a feasible option to raise funds for the next big step. In this survey, 93% of homeowners who refinanced to renovate, said they had concerns over whether they would be able to afford the repayments, and whether the proposed renovation would actually add value to the property.

It’s important to reassess your current financial position, run through your plans and future payments, and decide if you can afford to take on more debt.

Laying the foundations

The next step is to investigate and calculate how much you need to borrow to renovate. Work out the specifics of your renovation, what the average cost to renovate is in your area and how much you are eligible to borrow. Aim to spend no more than five per cent of your property’s value on a renovation.

If renovations are likely to take over your living quarters for an extended period of time, you may need to also consider the additional cost of accommodation for the renovation period – another cost to factor in to your budget.

Getting bang for your buck

Once you decide to renovate, if you are trying to add value to a house to resell, it is important to look at the rooms and areas of the house that will add the most value. These are average renovation prices for key rooms, however prices will fluctuate based on the city and suburb.

  • Kitchen: If you are a fan of any renovation show, you will know that kitchens sell houses. According to, the average renovation cost you should be spending on a kitchen is between $12,000 and $16,000.
  • Bathroom: The average bathroom space in Australia is six square metres. So look to spend around $9,000 to $12,000 as the bathroom is a highly trafficked space and needs to appeal to a wide variety of investors.
  • Other areas: An extra bedroom or a deck outside adds appeal, more living space and improves the standard of living for the homeowners.

Finishing touches

The final hurdle to look at when deciding to renovate is the council fee. The council can charge you up to $2,000 for an application fee, although prices can vary depending on your suburb. After speaking to a broker and finalising the renovation, make sure you account for an extra 10 per cent in your funds, to cover any unexpected costs.

Deciding on the type of loan   

If after the initial assessment and investigation you do decide to renovate, there are three types of loans to consider in helping refinance and renovate your house: a line of credit loan, a construction loan or increasing your existing home loan.

These options suit different people for different reasons. It is important you seek the right advice to determine what is going to work for your particular circumstances.

The added costs of purchasing property

Buying property isn’t just the purchasing price, a number of hidden costs are associated. So don’t forget to account for these extra costs in your considerations. In addition to the cost of moving, a change in council rates, strata fees, the cost of any renovations and furniture, homebuyers face additional fees to complete the purchase of a property.

Stamp Duty

Stamp duty, a state tax imposed on the purchase value of the property or the market value, must be paid in order for the mortgage documents to be legal and to transfer the property. But since July first homebuyers no longer have to pay the stamp duty fee, if the property is purchased for below $600,000 – a considerable drop in those additional costs of buying property.

Legal Costs

To transfer the ownership of property, a solicitor, conveyancer or a settlement agent are required. They will perform property and title searches to ensure the seller is entitled to release the property, which may include checking the strata body corporate records.


Building and pest inspections are an added cost, but one which may save you from further expenses in the future – particularly any major building work required. This amount will vary depending on the size of the property.

Agent Fees

First-home buyers don’t have to worry about paying any commission, since it is charged to the vendor of the property, most often as a percentage of the sale price. However, if you’re selling your current home to buy another property, you’ll probably have to take these fees into account.

Borrowing Costs

Lenders have application, valuation and settlement or loan approval fees that vary depending on the lender. Mortgage Brokers are familiar with these fees and can help you take them into account when choosing a lender that’s right for you.


Depending on your loan-to-valuation ratio (LVR), you may be required to take out lenders mortgage insurance (LMI). Although the borrower pays for it, LMI is not insurance for the borrower; it protects the lender should you default on the loan. You will also need building insurance if you are not purchasing a strata property.

Top tips for open inspections

Never judge a book by its cover. This is certainly true for books, and also for houses too. After all, who would buy one having never seen more than the front door? We’re in the midst of the season for selling houses, and open inspections are the perfect opportunity to get a good look at all the pages – so here’s how to take full advantage of the time you have.

Use your senses

Smell, see, listen and feel as much as possible. Your senses may be able to pick up tiny details of the house that other people would miss on an initial look. See that crack in the wall? It could mean structural issues. Or that damp smell coming from the kitchen? There could be mould in the house. Feel and hear that clattering underneath you when the water is running? Maybe there are serious plumbing issues.

Don’t be distracted by the bling

Everyone is an expert at styling houses since watching The Block or scrolling through Instagram, so don’t fall for the cushions and lamps. When you’re buying property, you’re buying the sausage. Not the sizzle. So make sure you take a good look at the size and shape of the actual rooms, and the placement of them across the floor plan. Imagine how you will really use it.

Look up

Lift your noses up from the brochure of the house, and check out the roof on the way in. Make note of the ceilings in the rooms too. Spot any damp patches or leaks? These could be costly and hard to fix issues.

Kitchen and bathrooms

If these two rooms aren’t how you would like them to be, then are you prepared to either live with it, or spend the money needed to transform them? Kitchen renovations in Australia have an average cost of $10,000 to $32,000, and that is only when the room doesn’t need any structural renovations… Bathrooms can be upwards of $10,000, too. To know what you might be in for, check out the Archicentre Cost Guide.

Look beyond the boundaries of the property

Who, or what, are your neighbours? Have a look at the location at different times across the day and week, as sounds and smells may differ greatly. What’s the noise like from the road? Are you right underneath a window-rattling flight path? Is there a bar across the road that only operates at night? If you have kids, or they’re on your cards in the future, what are the local schools like? Make sure you check out both primary and secondary schools. What is the local crime rate? What is the community like in the street? Do your research beyond the boundaries of the property so you’re truly informed.

Ask lots of questions to avoid unwanted surprises in the future

What is the price for utilises each month? Because that beautiful window in the living room may let in lots of light and open up the space, but it can also let in drafts in Melbourne’s cool winters – really bumping up the cost of bills each month. Check in on the history of the property too – has it had any previous repairs or renovations? It’s always good to have a history – just in case.

Have a pre-purchase building inspection

It may surprise you, but many houses are bought and sold without a building inspection. Home inspectors are trained to find the flaws in a home – ones that you may either never see, or never see as a problem.

Before you start looking at homes, get in touch with 40 Forty to help guide you in the direction of buying a house, with a loan that suits you.


How do comparison rates really work?

Comparing apples with oranges doesn’t make sense. To make finding the right loan easier, and to make advertised rates as transparent as possible, we have comparison rates.

You’re looking for the best mortgage deal and you see something advertised at ‘3.8%’. Underneath that seemingly too-good-to-be-true rate it reads ‘4.9% comparison rate’. What does this mean?

In 2003, an amendment was made to the Uniform Consumer Credit Code (UCCC) that required comparison rates to be included in advertising. This change was made so that customers were not easily misled when it came to home loan interest rates.

The comparison rate is designed to help show customers what the true cost of a loan is. The comparison rate includes all of the fees and charges that can be applied to a home loan as well as the actual interest rate over the loans full term. In some instances, lenders offering the lowest rate may not actually boast the cheapest loan, which is what a comparison rate can show.

This allows consumers to compare apples with apples, to an extent. It does make it much simpler to hold two loan products side by side and, regardless of whether one has a slightly higher interest rate and no fees while the other is a super-low interest rate with high fees, see at a glance that one is the better deal financially.

However, it isn’t always this simple. Fees and charges, the rate at which principle is paid down and the total interest paid over the loan term all change depending on the loan amount and on the term, so you need to delve a little further into how that comparison rate is calculated.

While the comparison rate itself must be as prominently displayed as the interest rate – not buried in tiny fine print – somewhere on the advertisement, there will be a statement along the lines of ‘Comparison rate calculated on a loan of $150k for a term of 25 years, with monthly repayments’. If your proposed loan is $900k the comparison rate for your loan will be vastly different. An annual fee of $500 on a $150k loan is going to make a bigger difference to the customer’s comparison rate than the same fee on a $900k loan balance.

To get around this, all 40 Forty clients are provided analysis of 3 or more loan products at the borrowing amount needed to fulfil their objectives. Modelling is done to show the true monthly cost as well as the cost over the longer term. That way, we can truly compare apples with apples.