Strata Units/Villas/ Town Houses - What Is Involved If Purchased?

In Australia, Strata Units or Strata Town Houses are basically not that complicated as it may sound, yet it is said quickly.

The Oxford Dictionary meaning for 'Strata' is  (http://www.oxforddictionaries.com) is very simply - the Plural word for 'Stratum'. And then the Oxford Dictionary meaning for 'Stratum' is:

noun (plural strata /-tə/)

• 1a layer or a series of layers of rock in the ground:a stratum of flint
•  a thin layer within any structure:thin strata of air

• 2a level or class to which people are assigned according to their social status, education, or income:members of other social strata
•  Statistics a group into which members of a population are divided in stratified sampling:allocation of sample units to strata

Origin:

late 16th century (in the sense 'layer or coat of a substance'): modern Latin, from Latin, literally 'something spread or laid down', neuter past participle of sternere 'strew'

In Latin the word stratum is singular and its plural form is strata. In English this distinction is maintained—it is incorrect to use strata as a singular or to create the form stratas as the plural: a series of overlying strata not a series of overlying stratas, and a new stratum was uncovered not a new strata was uncovered.

So now are you confused? Well, I was uneducated until 2 

weeks ago. Now I am semi-qualified to explain to you  how 

it works in Australia.

Basically in means that you don't pay for Building

insurance when you own a Strata Titled property,  as you 

are sharing a common property. Yet Quarterly levies need

to be paid, which covers  building insurance and 

maintenance and repair of property. Improvement for 

anything related to the property need to be approved by a 

the owners corporation.

For further information you can research the following 

websites, for assistance:

NSW Fair Trading - Strata Schemes 

Strata Community Organisation

So Strata Units are  are Strata Titled units commonly 

known as a block of Units and Strata Town House can be

 joined or freestanding.


Type of Strata Units:

                                                         

Types of Strata Townhouses: 

First one is sharing a common wall, the second one is free-

standing.

          

How Much Deposit Do I Need Before I Purchase A Real Estate!

 This will depend on the saving you have and  how much savings you are allocating towards your property purchased, allowing for what type of costs you will be incurring.

There is costs previously mentioned before: solicitors costs, Stamp duty, moving in costs and depending how much you borrow, you may be asked to take out mortgage insurance, based on the level of borrowings required against the purchase price.

So for example if you are purchasing a property for $430,000 in NSW the stamp duty cost is currently $14,840.00.

Click here for a sample of mortgage Stamp Duty Based on your area  *This calculator also calculates the mortgage registration fee and transfer fee.

Based on the level of borrowings against your purchase price, we will use 2 examples if you borrow $400,00 on the property purchase of  $430,000 - the extra mortgage insurance is $12,000. If is  borrowings of $43,000 and the purchase price is the same then
there is no mortgage insurance is usually payable for  loan to value ratio of 80 percent or below (always check with your mortgage lender to confirm).

Click Here for a Mortgage Insurance calculator


So this gives you and idea of what deposit is required. A suggestion is to get a pre-approval loan from your mortgage lender, before shopping around!

How Do You Choose Your Agent When Purchasing A Property?

The simple answer is there is no necessity to choose a real estate agent, to purchase a real estate property unless you have had good dealings with a real estate through your own personal dealings, families or friends.

The real estate property you eventually buy may even be from a real estate agent you may not even know about, yet.

Some Real Estate agents are under 'time pressure' to talk to you, and sell the property, unless they see and feel that your are the interested buyer. This depends on the questions you ask and the interest you show.

My experience in buying properties is limited: 50 percent actually searching for a property via any real estate agent and 50 per cent knowing which property to purchase and the agent came with it!

You're probably thinking what does that mean? Well all I can say is our first property purchased (my wife and myself), we had to search and look for properties  and the real estate agent drove us to the property to have a look at and it was purchased.

The second and third properties, we had seen ourselves as they were around our vicinity all the agent had to do was show us.

The recent one we have purchased, was like the first  one we purchased, we had to search and look around until we were happy, the agent that we had purchased the recent property, had the time, patience and allowed genuine 'thinking time' as we thought about deciding to purchase. This was a great feeling  that I had never experienced as real estate is  the  most important purchase in any one's life! The reason I found out is she  is a 'one-woman real estate business' so she is not pressured for time!

Next question is do you trust the agent or go by your first house inspection or even both?

Click on this blog for possible answers

Factors That Contribute Property Purchase Decisions

It is a general goal in life that when growing up in Australia, we all want to own your home. No one can blame you for that but that will depend on many choices you have made or are making and  people around you that have raised you to the person  you are today.

It will also depend om your financial status and if this is one of your life goals which you will definitely aim for. 

As discussed in previous posts there maybe some hurdles to overcome, to ascertain if you are ready to purchase with take home loans.

Once you sort factors like estimate purchase price,saving, expected expenses and calculate the viability of ensuring home loan repayments can be made.

On the other side, emotionally and psychologically, you have to be prepared to bid for the future property that you may be happy to  bid with your partner, with the property most liked. And if not successful, don't be disheartened if you don't get it. Maybe next one will get you there!

Do it with passion and love, that will make it easy to deal with!

Do Not Purchase Property If You Are Not Ready!

This sounds so simple and it is, yet a lot of us that want to purchase property (using loans) usually want to do it as quick as possible. The younger the better!

Generally that is the thumb rule, yet rushing into it without doing your own homework, may one day place you into deeper debt. So what I always suggest is whatever amount of the Home Loan interest is add  at least, 5 percent worth and see with your income and expenses whether you would be able to pay this comfortably, This assuming interest rates where that high. That means check out your capacity to pay.

Ensure that if that if you are paying off your mortgage with your partner, should one of you lose income or have income reduced, you are both in a capacity to cover your mortgage repayments. The other thing you can do is add lump sum payments as you pay your account off and your withdrawal facility will increase, which can be used a s back up to cover income shortfalls!

If the house you are buying is not the house you want to purchase and you are having doubts because of all different variables then there  a need to  not proceed. Cut your small losses now, before it could escalate to be a lot bigger loss.

You have got to be really happy with the property you buy, if not you will be miserable and disappointed. Cheer up it is not all doom and gloom, there is  an opportunity to delay buying and come back in a stronger financial time.

If  there is any sort of doubt in purchasing a property, pull out immediately before mistakes could be made. I t is better to  purchase a different property if you are not ready at a later time!

Do You Trust Real Estates In What They Say To You - When Buying Property?

Every Real Estate Agent is a sales person and myself, as a former sales person (not Real Estate),  I know we are talking to our potential customers as if we have the best product to sell.


Each agent is a human being like you and me. They have a job to do and  yes they maybe looking after their own interest but the focus is getting you the property you wan to buy with them as well as the the best sell price for the seller. He or She is the go between buyer and seller, that is why they are called Agent.

An experienced  Real Estate Salesperson will take time with each customer knowing how important it is to listen and then respond at the right time. They will provide their quality time to you so you get the service you desire.

Initially, you don't have to meet the agent to purchase  real estate. With the electronic internet era we live in, the initial viewing of properties is done on the internet though websites like 
Domain and Real Estate*. Here you will find they are user friendly, by search by area , type of property seeking and price range.

One you have found your lists of property then comes the chance to visit your Real Estate agent or contact first and then then visit, so you can view and prepare for the holding deposit.

Like everything in life, we judge people by their first reactions and agents will do the same. Some will treat you as a number, some may not  have the time for you and fob you off and others will take that little extra interest in you.

If the agent is suggesting there is only one house available to see, that maybe only for that agency. Usually in non peak periods there are 8-9 house on the market ready to view but in a high buying market one on the market and next day sold. So you have to check the market for a week or and see how many properties are being sold or  not, in that time.

If the agent has many properties to sell, he will ask you have you got any properties in mind?

If he or she takes you to see a property straight away then he or she has the time and not many other potential customers to show properties.  Yet, if he refers to showings then he or she is limited in time to assist you. The keener you are the keener he or she is, to show you the property.

If you do not trust the real estate agent you meet, you may not have the confidence to purchase the property but consider this you are not buy the real estate agent you  may be buying the  property he is showing you!

Ask relevant questions  regarding the property like is under rental, what are the local council zoning plans for the future, nearest shops, schools, churches, bus tops and train stations (if not known). You may  need to ensure you mind is clear about the property. Legally you purchase the property the way you see it, so remember details of the property, so when final inspection comes any issues can be raised.

By this time, you will know  whether what the agent is saying to you when purchasing the property.

If you do not make the decision by the end of the showing it was a waste of time for the agent but not for  you!

*There maybe others but currently these are the mains websites to use, unless you choose others

Where Do You Go For Finance To Purchase A Property?

This is an independent quest that really needs to b e answered by yourself and this is only to be used as a guide.

As a purchaser you cannot buy a property if you haven't done your financial homework. I mean walk into a real estate agent, pay the initial deposit (normally called a holding deposit) and find out no one or no banks, mortgage lenders and other financial institutions will  provide you and/or your partner with a home loan. By doing this you have wasted your own time and also the Agents.

So after working out deposits saved (if any), and deducting all costs associated with the purchase of the property from the potential purchase price of the property. Then you do know how much you may need to borrow!

I have searched for list of banks, credit unions building so on the internet and have found an details on APRA (Australian Prudential Regulatory Authority  Click Here for the List. 

Also located Mortgage & Finance Association of Australia (MFAA) Click Here for details of MFAA

If there is a need search for for financial you can also explore them as well. One thing you need to keep in mind it they have to reputable and researched by yourself , so you are confident they will provide you with that home loan instead of going broke.

Obviously another rare financial lender could be members of your families, at least for a short term.  A lot of families will be in a position to not to assist as they may not have the finances to assist. This is when this could make families be closer together or  could also set them apart well apart if something goes wrong. The families that do decide to assist - must  know what the situation happens if  any or all borrowers are unable to assist with mortgage repayments. 

Contingency plans must in place to ensure mortgage repayments are maintained , if not contract your lending creditor before any sale of your property also (known as foreclosure of property).

Some ideas of contingency plans could be selling your car, unused household  items, stock market shares, using up  any extra savings, renegotiating with other creditors reduce repayments under Financial Hardship', which could result being short term.

Also you need to ask your lender the obligation the creditor has if there is a default of payment on the loan due to  reduced financial income and possible affects  to the borrower if it happens and what can they do if  'Financial Hardship'  occurs.

It is like this, most Australians do not ask many questions of borrowing a home and may not understand their full obligation, where as purchasing a car you will wan to ensure the car is in good working condition, warranty details (if any). Same with all the above mentioned banks and financial organisations you want to know how their  loan insurance works, financial hard policy and also what happens if you pay extra payments.

Now it is up to you!