GUIDE TO BUYING PROPERTY
What should I do before I buy?
Make an offer and negotiate a price. Once your offer has been accepted, obtain a copy of the Contract and email a copy to us to review. Arrange your Building, Pest and/or Strata reports and any other reports (if necessary). Contact your lender with details of the property. Make sure your finance is approved and unconditional. Have your deposit ready. Inspect the property in different conditions and times of day. Go to the Local Council and speak to the planning department and check on any nearby development, previous renovations and any other information the Council can give you.
Are there different ways to buy?
Private treaty is when you negotiate with the seller through the agent (or the seller direct if there is no agent) then agree on a price. Once you are ready, Contracts are then exchanged. The property is not sold at auction and you may retain or waive the “cooling off period”.
What is a cooling off period?
Cooling off is a right you have at law to exchange Contracts and have 5 business days from exchange to change your mind and rescind the Contract. If you rescind the Contract, you lose 0.25% of the purchase price but any other deposit you have paid is refundable.
Giving up your cooling off rights – Section 66W Certificates
You may be asked to waive (give up) your cooling off right, that is, be locked into the Contract and not be able to change your mind. To do this you will be asked to provide a Section 66W Certificate, that is a certificate signed by your conveyancer to say that you are prepared to give up this right. Naturally, whether you retain your cooling off rights or not, it is critical that you are completely informed before you sign the Contract.
When the hammer falls on your bid, you are the Purchaser of the property and there is no opportunity for you to change your mind. You will be required to sign and exchange Contracts straight away. It is very important that you make sure you have your deposit ready and have had the Contract reviewed by your conveyancer, carried out any pre-purchase inspections and obtained unconditional loan approval (if finance required). IMPORTANT: There is no cooling off period when you buy at auction. Once you are the successful bidder, there is no going back. This is why it is critical that you have had the Contract checked, made your enquiries and arranged your finance before you bid at auction.
Are there things Contracts don’t tell us?
The Contract gives us a lot of information about the title to the property but nothing about the quality of the building on it. This is what is commonly known as “buyer beware”. It is therefore very important to have carried out inspections of the property prior to exchanging Contracts.
WHAT ARE THE STEPS IN THE CONVEYANCING PROCESS?
Exchange – what is it?
This is when the Contracts are checked to make sure they are identical, then “swapped” and dated. At this point they become legally binding, in other words, you are legally required to buy.
What happens between exchange and settlement?
Swift Conveyancing will investigate the title thoroughly, submit a list of questions to the vendor’s conveyancer and liaise with your lender to make sure they will be ready for settlement. Settlement figures are sent to you for perusal.
Is there anything I should do between exchange and settlement? You must pay your stamp duty, sign your mortgage documents (if you are obtaining finance) and make sure that you are ready with the balance of funds in time for settlement.
You must decide whether you are buying as joint tenants or tenants in common. Joint tenants is when you buy the whole property together, there is no actual share, and if something happens to one, the whole property passes to the survivor. In tenants-in-common, you own an actual share, it can be more or less than 50%, which will pass as set out in your Will if you pass away.
Should I take out Insurance?
Ensure the property is fully insured from the day of settlement. If you are buying a strata unit, the building will be insured by the Owners Corporation however you might like to take out contents insurance to cover items such as carpet.
You are legally entitled to carry out a final inspection of the property within 3 days of settlement. If there is an agent involved, you should contact the agent directly to arrange a suitable time to carry out the final inspection.
The settlement process takes approximately 30 minutes to 1 hour to complete. You are not required to attend settlement.
As soon as settlement has taken place, we will contact you and the Sales Agent immediately who will release the keys to you so you can move in. The Land and Property Information Office receive notification of the change of ownership from your Bank (or our office if you are purchasing with cash) and the LPI then inform Sydney Water, the Local Council and Valuer General. After completion your Lender will organise for the ownership of your new property to be registered at the Land and Property Information Office. Eventually the deeds will be transferred into your name and will be sent to your bank or building society to keep until your mortgage is paid off. Of course, if you were able to purchase a property without a mortgage, we will send the deeds to you.