How this buyer purchased a property with no deposit and no stamp duty costs
Changing consumer preferences and accelerated working-from-home trends have seen Australians abandon cities for more lif...
Buying an apartment in 2016, in Sydney, was not an easy or even advisable mission. But by being ready to pounce during the holiday period, I got my Christmas wish.
As a first home buyer in NSW two years ago, I was looking for a modest entry point to the Sydney market.
I had a few non-negotiable conditions: a two-bedroom unit in an established block, maximum 25km from the CBD, 10 minutes walk to a train station, and 10 minutes drive to an arterial motorway. Most importantly, I wanted to buy well below the median price for a few of the suburbs I’d ring fenced.
Basically, I was (very) optimistic.
Sydney’s was tracking at across-the-board value growth of over 10 per cent by August 2016, coming off 14 per cent growth the year prior. The entry point I was chasing was the most affordable for first home buyers and downsizers at the time, and it felt like I was in competition with half of NSW.
After five months of open houses, I became used to some scary scenes. Budding buyers would show up to open houses with a signed 66W - meaning they forfeited their cooling off period for an immediate settlement - without even having their contracts properly reviewed or inspections complete. At one open house, two parents turned up with a chequebook to help their son buy an apartment, for investment, that had rental yield of 2.3 per cent.
By December, I was texting real estate agents more than my friends, and everyone in my life knew to leave me alone on a Saturday.
Two weeks before Christmas, an apartment that ticked all my non-negotiable boxes went on the market. It was in my price range. I left work early the Monday after it passed at auction, inspected it, and it was mine by Christmas day.
The only reason I could secure this property quickly was because I was ready to pounce, and being ready to pounce at Christmas is different to any other time of the year. All parties vital to the transaction are getting ready to shut up shop, and are either in a rush to sign you up, or not keen to take you on.
Nevertheless, buying in a holiday period is doable, and it’s worth it. There are only a few times in the year that your competition will be diminished, and holiday periods are one of them. With a bit of organisation - which costs nothing - you put yourself in the best position possible to take advantage of market conditions, and bag the property you’re chasing.
Here’s what I had ready to go:
I had pre-approval, and worked with a mortgage broker who I knew would be available over the Christmas period. We kept in regular contact throughout December, and she kept me up-to-date with processing times at my lender of choice.
I also checked how quickly my lender could issue bank cheques, and what dates they would be open during the Christmas period. For online-only lenders in particular, this is crucial, as you’re often relying on Express Mail in the absence of a branch.
I kept my solicitor up-to-date with my progress in December, and relied on him to tell me what was and was not manageable in terms of time frames. He considered important factors like Christmas closures for strata companies, which you need for reports and checks.
Building and pest inspections
I had a few companies lined up, all with appropriate certifications, that would be available on short notice to do building and pest inspections. Some thought this was overkill. In my eyes, you shouldn’t go ahead with a huge investment without a professional opinion on the quality and safety of what you’re buying.
For me, this applies to new properties more than it does to established properties in Sydney. I saw some downright horrifying flaws in brand new properties, including floors not being level, exposed wires, chipped render, mould and windows that wouldn't shut or lock. It completely turned me off buying new, even though that meant forfeiting grants from the NSW government. I'm sure there are some big winners in the off-the-plan market, but I wouldn't touch one without a professional running their eye and dampness meter over it.
Nerves of steel
Around a holiday period, real estate agents are eager to wrap up deals before they take leave, which is a powerful bargaining tool if you’re buying. It also means you’ll cop intense pressure to move quickly.
I was a nervous first home buyer, but I didn’t bow to this pressure - the phone calls, the emails, the texts. I was calm in the knowledge I was in the driver’s seat, and firm in never compromising my own checks and balances.
Without all these plans in place, there’s no chance I would’ve secured the property I was chasing, in the area I wanted. For the zero-cost investment of being organised, I got a decent return.