Six key issues to watch for once your offer is accepted

The settlement process of buying property can be full of mixed emotions as you grapple with the excitement of the purchase against the fear something might go wrong and dash your dreams.

Losing a property once an offer has been accepted is a rare event. It happens, of course, so you should never consider a deal is done until the ink is dry and the contracts have exchanged. 

It is possible for buyers to make mistakes that can bring everything undone. Below is a list of the most common risks, to help you avoid the issues or manage proactively.

1. Offer is accepted – Once this occurs, your selected lender will move from offering pre-approval to granting a loan based on the property you wish to purchase.
2. Lender checks – Your lender will again verify your employment, salary and financial position. If you’ve changed jobs since pre-approval, there could be a delay. A problem might also arise if you’ve added to your debt by buying a new car. It’s a risk to change your financial circumstances once pre-approval is granted.
3. Property appraisal – The lender will value the property to ensure you’re not paying too much. Usually, the valuation comes in lower than the offer, but unless there is a significant discrepancy that’s not a problem. If you’ve made the mistake of offering way over the odds, the bank may reject your loan and you’ll need to personally make up the shortfall. 
4. Insurance – Depending on the financial arrangements that you’ve made with your lender, you may be asked to take out Lenders Mortgage Insurance. This protects the lender if you default on your payments. They’re protected at your cost. 
5. Additional costs – Don’t make the mistake of having insufficient money for legal and insurance charges. These can be around 3% of the purchase price. A lender may ask you to prepay the interest on your loan, too. This is usually calculated at the beginning of each month. So, if you buy on the first of a month, you’ll have a significant payment. The opposite is true if you close on the 30^th.
6. The final walkthrough – Always go through the home one last time before you sign the contract. If you see any issues or damage, speak up. You won’t get another chance. The walkthrough should be a formality, but sellers have been known to dismantle spas and barbeques, remove light fittings and even dig up roses. Make sure the old owners are ready to hand over passcodes for security devices, remotes etc.