There are lots of new terms and concepts to come to grips with when you decide to buy a property, so here’s some general information that should make you feel more comfortable when the time comes to make an offer and sign a contract.
As well as the purchase price, there are some extra costs you’ll need to allow for, including the cost of using a solicitor or conveyancer to handle the legal side of your purchase, and government stamp duty charges. If you need to borrow money, your lender will generally require:
While government fees are fixed, solicitors and lending institutions vary in what they charge. It’s a good idea to shop around for the best deal. Your SEJ Livestock & Real Estate sales agent can give you some advice about who is currently offering good service.
You should engage a solicitor to handle the legal side of the purchase (the conveyancing) for you. The requirements for transferring a property’s title into your name are quite complicated, particularly if you are borrowing money to complete the sale.
Tell your solicitor what you plan to do and ask if they have any advice about making an offer and signing a contract.
If you decide you want to buy a property, the sales consultant will invite you to fill out a contract. A contract is a legal document that details how much you are willing to pay for a property and any ‘special conditions’ that must be satisfied before you will buy.
The sales consultant will present your offer to the owner, or ‘vendor’. They might wish to negotiate with you for a higher price or add their own conditions before they sign the contract. The contract can move back and forth between you and the vendor several times (via the consultant) until everyone is happy with the terms.
Be prepared to act quickly when making your offer as the vendor may accept offers from other potential buyers who sign their contract before you do, offer a higher price or have fewer conditions (for instance, they might not have to sell their own home first).When you and the vendor both sign the contract, it becomes legally binding and the ‘deal’ is effectively made.
The consultant will send a copy of the contract to your solicitor. The solicitor will do everything necessary to make sure that transfer of the property’s title to you runs smoothly. They’ll check that the owners are legally able to sell their property, that there are no outstanding charges that you could be burdened with, handle all the council requirements, and so on. Then they’ll coordinate the settlement and collect the money from you (or the bank) to pay the vendor, the legal costs and other charges.
You’ll be required to pay a deposit to the real estate company, who acts as a stakeholder for both parties and holds the money in trust. The amount of deposit is negotiable; however, it is usually 10% of the offer amount. An initial holding deposit of $1,000.00 is required upon submission of your offer and once accepted by the vendor, you are required to pay the balance of deposit by the due date under the Contract. (If subject to finance approval, once this has been approved).
You’ll need to organise insurance cover for the property, even though you haven’t moved in yet. Call your insurance company and tell them you’ve bought a new property .
Arrange your finance with your lender. Your Solicitor and lender will work together to make sure the money is ready for transfer to the vendor at the time of settlement.
‘Settlement’ is effected on the date agreed upon as per the Contract.
You must now set to work on satisfying any special conditions you might have asked for: the building inspection, or selling your own property, for instance. It’s important that this happens quickly so it doesn’t hold up the contract.
When the conditions are met the contract becomes ‘unconditional’. Then it’s simply a matter of waiting until the ‘settlement date’ is effected, and you’re ready to move into your new home.
We recommend that you make a final inspection of the property just before settlement; the consultant can arrange this for you. When you buy residential property, you buy the house and land on which it is built, as well as the fittings such as carpets, light fittings, curtains, heaters etc. (‘the chattels’). The list of chattels should appear on the contract. You should keep this list to use during your final inspection before settlement to correctly identify each item that is included with the sale.
On the day of settlement. you’ll receive confirmation from your solicitor. Then you can collect the keys and get moving.