Purchasing.

There are two ways of purchasing property and that is by “private treaty” or “auction”.   

When buying residential property by way of private treaty you make an offer and once it is accepted you usually are requested to sign a contract and pay .25% deposit.  If this happens, you have the benefit of a 5 business day cooling off period (this can be extended by negotiation).  This cooling off period enables you to finalise your formal loan approval, get advice on the contract and negotiate any changes required and also get your building report, pest report and/or strata report.  You can pull out of the contract for any reason within the cooling off period but you will lose .25% of the purchase price.   

Sometimes the Vendor will want you to exchange contracts and waive your cooling off period so in this case you need to do all your searches, obtain finance and advice on the contract prior to exchange of contracts. 

The other way of purchasing is by auction whereby if you are the successful purchaser there is no cooling off period so you are immediately bound to buy the property or you risk losing your deposit.  We strongly suggest that you get thorough professional advice from us prior to attending auction. To assist you with your next steps, outlined below is a list of important steps to follow when purchasing:

WHEN PURCHASING BY WAY OF PRIVATE TREATY 

If you are purchasing by way of treaty you should have the following in place:

  • ensure you have a valid pre-approval for finance in place with a bank or through a mortgage broker;

  • make an offer through the real estate agent and once your offer is accepted have the agent email a copy of the contract to our office so we can check the contract and discuss it with you;

  • if the property is residential the agent may encourage you to immediately sign the contract and pay a .25% deposit which means you will be entering the contract with a cooling off period (usually 5 business days – but you can negotiate this or request an extension if necessary).  If you do this and you want to pull out of the purchase in the cooling off period, you will forfeit the .25% deposit you have paid;

  • alternatively, the Vendor may want you to waive your cooling off rights and enter the contract unconditionally once you are ready;

  • order pest and building reports and/or a strata report either during the cooling off period or, if no cooling off period, before exchange of contracts, (we can assist with this);

  • receive advice on the contract from us;

  • we will then negotiate the terms & conditions of the proposed Contract of Sale (ie request 5% deposit) to provide a better position for you.

WHEN BUYING AT AUCTION

If you are attending an auction you must do the following before the auction day:

  • have secure written, unconditional finance approval.  If you cannot get unconditional finance approval then you run the risk of the bank undervaluing the property after auction and not lending the full amount you need so we recommend you ensure you have a buffer amount in the event this happens;

  • have received comprehensive advice on the contract and your rights and obligations from us;

  • have us negotiate the terms & conditions of the proposed Contract of Sale (ie request 5% deposit) to provide a better position for you;

  • to request the Vendor to provide additional information or documents;to obtain building and pest reports and/or a strata inspection (as applicable);

  • to personally make any further inquiries, for example at Council, with neighbours, other real estate agents, a builder, architect or other professionals.


On the day of the auction you must

  • have your deposit ready to pay. You should speak to the auctioning agent to arrange how you would pay the deposit if you were the successful bidder

TESTIMONIAL

“Many thanks for all your assistance with coordinating the exchange of contracts for our new home.  Your help was invaluable and we doubt we would have been celebrating as successful purchasers last night without your input.”

NEVA + MATT, ANNANDALE

LJS Conveyancing man signing paperwork

What costs am I up for?

When purchasing a property you should budget for the following:

  • Our fee;

  • Pest report, building report, strata report;

  • Survey report (if required);

  • Stamp duty;

  • Any additional searches you may want such as enquiries with authorities like Council regarding outstanding Orders, RMS, State Rail, mine subsidence board etc.  This will depend on the area you are buying in and your specific concerns;

  • If strata, Section 184 Certificate;

  • Payments for your proportion of the Council and Water rates and Strata Levies for the period current from the date of settlement to when the next rates or levies are due;

  • Title insurance (if requested);

  • Any fees your bank may charge such as establishment fees, settlement fees etc.  You should check this with your bank when arranging your loan approval;

  • Property and contents Insurance; and

  • Removalist fees.

 

ARE YOU CONSIDERING BUYING "“OFF THE PLAN” PROPERTY?

Purchasing 'off the plan' is quite popular as people buy apartments or retirement village homes that are not yet built. There are advantages & disadvantages of purchasing "off the plan" property.

Advantages:

  • Government grants and exemptions may be applicable on brand new properties;

  • The purchaser secures a brand new property at a price that is expected to grow in value over the period it's being built;

  • The purchaser is usually able to secure the property by paying 5% or 10% of the purchase price with the balance being payable at settlement.

Disadvantages:

  • Stamp duty may be payable prior to settlement;

  • The property is not exactly what you were expecting i.e. the property is bigger/smaller/different to what you expected;

  • The builder does not complete the property when expected or may even decide not to proceed with the project if the terms are not satisfactory to them; or

  • You don't like the property when it's finished or something affects the views from the property.

Before signing the contract you should:

1. Check the builder's/developer's reputation. Ask the builder for their previous projects and try to speak to people who have purchased from the builder previously;

2. Check details such as size of the property & every room, ceiling height, balconies, parking (if any parking spaces are part of the purchase), garage (if it is secure or not), storage (and whether it is secure or open), special connections such as TV & internet, materials such as carpets, tiles, kitchen & bathroom fittings etc. Also establish how much change can the builder/developer make to the property and from the plan plans that you have received;

3. Visit the actual location of the property to ensure you're satisfied with possibility of future developments affecting your property;

4. Check the Sunset Clause or the Sunset Date - which is the amount of time that the builder/developer has to complete the project and what happens extra time is required;

5. Check if the plans have council approval;

6. Check how much the proposed strata levies are and any strata management arrangements.

Are you buying  commercial property, rural or vacant land?

Please contact our office to discuss prior to signing any contracts as terms may vary from residential purchases.