Buying property is one of the most stressful and expensive things you will ever do. It’s important that you seek legal advice from someone experienced in property law and conveyancing when buying property. Whether you are buying a block of land, a property to live in or an investment property, we are able to assist you with all your property law and conveyancing needs. Although we are located in Sydney’s north west, we are able to assist with the purchase of any property located within New South Wales. Below is a brief summary of what you may expect to take place when purchasing residential property.
Before You Start Buying Property
The first step you will likely need to make when you are looking to buy a property is obtaining finance. You should ensure that you have, at the very least, a pre-approval of finance in place prior to making any offers or paying a deposit on a property.
Making and Acceptance of the Offer
Once you have found a property and you’re happy to proceed, you can make an offer. After negotiations have taken place and your offer has been accepted, the real estate agent may request that you exchange contracts under a cooling off period or, the real estate agent may issue a sales advice to the seller’s solicitor/conveyancer where, upon receipt of the sales advice, the seller’s solicitor/conveyancer will issue a contract to our office.
Once in receipt the contract, we will review the contract with you, provide you with our advices in respect to recommended amendments to the contract or its special conditions and negotiate those amendments with the seller’s solicitor/conveyancer. We will also ensure that the contract is complete and request further information and/or documentation from the seller, if required and provide you with our advices in respect to the exchange, the cooling off period, the payment of the deposit, the necessity for pre-purchase inspection reports and post-exchange searches and enquiries.
Exchange of Contacts and the Cooling Off Period
Exchange is the swapping of a contract signed by you for one signed by the seller. The contract is usually exchanged either by the real estate agent under a cooling off period or by the seller’s solicitor/conveyancer unconditionally (i.e. without the benefit of a cooling off period).
You will have the benefit of a 5 business day cooling off period if you are purchasing residential property with an area of less than 2.5 hectares. During this period, you should obtain any pre-purchase inspection reports and ensure that you have a formal loan approval in place. If you are not satisfied with the pre-purchase inspection reports or, you are unable to secure finance or, you simply have had a change of heart, you can rescind the contract during the cooling off period. Should you rescind the contract during the cooling off period, you will forfeit the 0.25% deposit you have paid to the seller.
The cooling off period may be extended, but only with the agreement of the seller. This may be necessary should you not be able to obtain the results of your pre-purchase inspections or your formal loan approval by the end of the cooling off period. The cooling off period may also be shortened or waived by our office preparing and forwarding a Section 66W Certificate to the seller’s solicitor/conveyancer.
You will not have the benefit of a cooling off period if you enter a contract to purchase property that has an area of 2.5 hectares or more or, you purchase the property at an auction or, you exchange a contract on the same day the property is passed in at auction.
Pre-purchase Inspections & Reports
Prior to the expiration of the cooling off period or prior to the exchange of an unconditional contract (i.e. a contract that does not have the benefit of a cooling off period), you need to be sure that you are informed and happy with the condition, state of repair and legality of the structures on the property. It is advisable that a pre-purchase building inspection report and a pest inspection report are undertaken in order to satisfy yourself in relation to the condition of the structures on the land. In relation to the legality of the structures, it is advisable to obtain a survey report and building certificate.
If you are purchasing a property that is part of a strata or community scheme, it is advisable that a strata or community inspection report is obtained. This report will provide information in respect to the management, maintenance, repairs, levies, insurances, any recent insurance claims, any disputes (legal or otherwise) and provide information in respect to the financial records of the scheme.
Paying the Deposit
Once you have satisfied yourself as to the condition, state of repair and legality of the property, are in receipt of a formal loan approval and you are happy to proceed with the purchase, you can now attend to the payment of the deposit. If the contract is exchanged under a cooling off period, a 0.25% deposit will be paid at the time of exchange with the balance of the 10% deposit payable by the expiration of the cooling off period. If the contract is exchanged unconditionally (i.e. a contract that does not have the benefit of a cooling of period), a 10% deposit will be required at the time of exchange. The deposit is normally held by the real estate agent in a trust account and released to the seller after completion of the transaction.
If you are unable to pay a full 10% deposit, the seller may agree to a 5% deposit being paid at exchange and the balance being paid on completion. If you are not in a position to pay any deposit or, if the seller will not agree to accepting a deposit of less than 10%, you can obtain a Deposit Bond (if acceptable to the seller). In general terms, a Deposit Bond is a guarantee for the amount of the bond that the seller can call upon should you default.
Between Exchange and Settlement
After the contract has become binding, there are a number of tasks that we perform on your behalf, which may include but are not limited to the following:
- Protect your unregistered interests
- Making requisitions on title and perusing replies to requisitions
- Preparing the Transfer document and completion of any Stamp Duty Exemption/Concession Application
- Attending to the payment of stamp duty on the Contract and Transfer and preparation and execution of the Purchaser Declaration Form
- Preparation of the Notice of Sale
- Liaising with the lender in regard to the mortgage
- Checking with various government authorities to see if they have a vested interest in the property
- Checking to see if there are any outstanding debts to local council and water authority
- Calculating adjustments for council, water and strata rates
- Arranging settlement with all parties concerned
- Making final checks on the title
- Attending settlement
- Reporting to you after settlement
You are entitled to carry out one final inspection of the property within 3 days prior to settlement. The purpose of the final inspection is to ensure that all inclusions specified in the contract remain, and that no fixtures have been removed and that the property is in the same condition that it was on the date you exchanged contracts, fair wear and tear excepted.
On settlement day, which is usually 6 weeks from the date of exchange of contracts, our office or a settlement agent appointed by our office will attend a meeting that will include the seller’s solicitor/conveyancer as well as any lenders involved and the funds will be handed over in exchange for the title to the property. The title to the property together with the Transfer document will then be lodged at the land titles office and once registered, you will be shown as the registered proprietor on the register.
Our firm prides itself on the level of service provided. Please do not hesitate to contact us to discuss your property law or conveyancing needs.