Buying Property

What happens if I buy at auction?

If you are the successful bidder at an auction there will be no cooling-off period and you will be legally bound to proceed with the purchase.

Unless both parties agree prior to the auction, there will be no power to negotiate any of the terms of the contract following the auction. It is for this reason that it is important that you are satisfied with the terms of the contract prior to bidding and you have sufficient funds or a written loan approval.

We can have a look at the proposed contract and give you advice before going to the auction.

What does 'exchange of contracts' mean?

An 'exchange of contracts' means that we hand the contract signed by you, to the seller's representative and receive the form of contract, in identical terms, signed by the seller.

The deposit must be paid or a Deposit Guarantee Bond handed over at this time (if not already done).

The contracts are then dated. Once this has occurred, you are bound to proceed with the purchase of the property on the terms set out in the contract.

Is it necessary to obtain Pest & Building reports?

During the property transaction, our enquiries only deal with investigations into the title to the property. They do not extend to matters such as the physical condition of the property.

You need to satisfy yourself on this issue. Therefore, we always strongly recommend that these reports be obtained by you prior to the contract being exchanged.

How much stamp duty do I have to pay?

The amount of stamp duty payable is dependent upon the purchase price of the property.

The Office of State Revenue offers an online service to allow for calculation of stamp duty.

When do I have to pay stamp duty on my purchase?

New South Wales stamp duty is payable on the contract after it is exchanged.

If you are borrowing money to purchase the property and settlement is around the usual 6 weeks from exchange, then stamp duty will need to be paid usually at least 2 weeks prior to completion to avoid any delays with completion of the purchase. 

If necessary, stamp duty may be paid at settlement, particularly if you are borrowing funds for the payment of stamp duty.

If settlement is longer than the usual 6 weeks, payment of stamp duty can be delayed until nearer completion provided that it is paid within 3 months of the date of exchange, otherwise interest will accrue.

If you are not borrowing money to purchase the property, payment of stamp duty can be delayed until the time of completion provided that it is paid within 3 months of the date of exchange, otherwise interest will accrue.

If you are purchasing an 'off the plan' residential property which will become your principal place of residence, stamp duty is payable within 12 months of the date of the exchange of contracts or at completion of the contract, whichever occurs first. 

If you are purchasing an 'off the plan' commercial property or residential property which will be used as an investment, or vacant land which is subject to a subdivision, stamp duty must be paid within 3 months of the date of exchange or at completion of the contract, whichever occurs first. Otherwise, interest will accrue.

What do I do if I am also borrowing the funds for the stamp duty?

All you need do is let us know as soon as possible that your stamp duty will be paid from your loan. We will then liaise with your lender to arrange for stamp duty to be paid at completion.

In any case, you need to be aware that the stamp duty generally must be paid within 3 months of the date of the contract, otherwise, interest will accrue.

I am borrowing the money from my bank to buy my property. What do I need to do to get the money?

We will liaise with your lender to arrange payment of your loan advance.

Your lender will either contact you directly to arrange for signing the loan documents or will send the loan documents to you or to us. We will contact you to arrange to sign the loan documents if they are sent to us.

If your financier is one of the major banks (ANZ, NAB, Westpac, Commonwealth, St George), then your lender will usually contact you to go to their branch and sign the loan documents. We always recommend that, if you have not been contacted by your lender within two weeks of exchange of the contracts, you should contact them directly and advise us if you believe there may be some delay on the part of your lender in finalising the loan documents.

If your lender is other than one of the major banks, then the loan documents may be either sent to you or to us. An appointment may then be made for you to come in and see us to sign the documents.

When should I do my final inspection?

A final inspection should be carried out immediately prior to settlement. This inspection is to ensure that:

• the owner or tenants of the property have moved out or are in the course of moving out;
• the property has been left in the condition that it was in when you first inspected it;
• the inclusions stated in the contract have been left in the property; and
• the property has generally been left free of any rubbish.

You should be aware that the seller is not required to leave the property in an absolutely clean and pristine condition. The responsibility is for the seller to vacate the property and remove their belongings.

What does 'settlement' or 'completion' mean?

Settlement or completion is the time at which the property becomes yours.

At this time the balance of the purchase price must be provided to the seller.  The process will be conducted through PEXA, which is a secure on-line conveyancing platform, and this includes obtaining any funds you have to apply towards the purchase.

We will be in regular contact with you leading up to settlement to liaise with you on the final stages of the conveyancing transaction.

What happens if settlement is delayed?

Commonly the contract for sale, which has been drawn by the seller's lawyer, will include provision for you to pay interest if you delay settlement beyond the agreed date. But the seller must also be ready and willing to complete by that agreed date before interest applies.

If there is substantial delay by you, in the worst-case scenario, you can be served with a Notice to Complete which can have disastrous consequences to you. We will work with you as necessary to avoid or defer the service of such a notice.

How do I get the keys after settlement?

In most instances we arrange for the seller to leave the keys with the agent on the settlement day. Once we advise you that settlement has occurred, you can then attend the agent’s office to collect the keys to your new property.

Will I have to pay land tax on my new property?

Land tax is charged on land owned by you as at midnight on 31 December each year. There is no land tax payable on your principal place of residence as at that time.

Land tax is payable on your principal place of residence if the land value exceeds the premium threshold value.  It is also payable on any property you own, which is not your principal place of residence if the land value of the property (or properties in aggregate) exceed the general threshold value. You can view current details of the premium threshold value and the general threshold value here.

What does 'land value' mean for land tax purposes?

In the case of a house or vacant land, 'land value' is the value of the land, ignoring the value of the house.

In the case of a unit, 'land value' is the value of the land upon which the building has been erected. That value is then apportioned among the units in the strata scheme using the unit entitlement.

In all cases, the land value is not the purchase price of the property.

I've bought the property and I intend to renovate or rebuild it. Is there anything I should be aware of?

If you contract with a builder to do any home building work on your property which exceeds the value of $20,000.00, you should ensure that the builder provides you with a certificate of insurance which covers the work for defects as required under the Home Building Act, 1989. This certificate of insurance should be retained by you for seven (7) years and should be attached to the contract for sale of your property if and when you decide to sell.

If you choose to do any work as an owner/builder which exceeds the amount of $20,000.00, we strongly recommend that you obtain, at the time of undertaking the work, a certificate of insurance covering the work done, pursuant to Section 95 of the Home Building Act, 1989.

If you sell the property within seven (7) years from the date of undertaking the work and do not attach the insurance certificate to the contract, the buyer will have a right to rescind (end) the contract.

Whilst you are not required to take the insurance out at the time of undertaking the work, it may be very difficult, if not impossible, for you to obtain the required insurance at a later date. This will mean that you may not be able to sell the property until the expiry of seven (7) years.

I am considering buying 'off the plan'. What do I need to be aware of?

There has been a lot of media attention as to buying off the plan.

There are benefits in doing this; a brand-new property with all the latest conveniences.

But there are drawbacks:

• the developer or its sales force overselling what is expected;
• the developer failing financially or either defaulting or causing a substantially delayed development
• the final property not being to the standard you expected, and so on

These contracts are usually very complex and do need you to be careful in fully understanding how the property will look and be fitted out at completion.

We will work with you for you to understand the issues of this type of transaction.

I want to subdivide my property. What do I need to be aware of?

We will work with you and your surveyor through the subdivision process to ensure that all local council driven conditions, which require title restrictions or rights to be registered, are properly addressed.

This includes drawing any appropriate easements, covenants or restrictions applying to the titles to the properties after subdivision.

We can also work with you and any financial adviser in relation to tax and duty issues arising as part of the subdivision.