Buying Your Home, Unit, or Land
Buying real estate generally involves three distinct stages – Pre-purchase investigations, Exchange of purchase contracts and the Completion or Settlement of the purchase. Set out below are full details of each of these stages which you can also follow on our Step-by-Step Guide to Buying Residential Real Estate.
Once you have negotiated to buy your new home, investment property or land it is essential that a number matters be confirmed and investigated before you are fully committed to your purchase. If you are borrowing to assist with your purchase it is very important to have received written confirmation from your lender that your loan has been unconditionally approved. It is also important to be fully conversant with and accepting of the terms on which your lender intends advancing the loan to you.
Additionally it is prudent to consider obtaining certain inspections on the property. These will vary depending on the nature of the property that you are buying (house, unit or land) and may include a pest inspection report, building inspection report, survey report, council inspection, strata records inspection etc. Generally these reports should be obtained and the results known before you exchange contracts. However, if you sign contracts with an estate agent who effects the exchange it is possible to have these inspections done during the ensuing cooling-off period.
Exchange of Contracts
Exchanging contracts involves the swapping of contracts signed respectively by the buyer and the seller at which time a deposit is paid by the buyer. An exchange of contracts for residential property (houses, units and rural properties less than 2.5 hectares in area) will generally take place in one of two ways:
- At the time the purchase is negotiated the vendor’s estate agent may ask a buyer to sign a contract and pay a deposit equivalent to 0.25% of the negotiated purchase price. The agent then arranges for the seller to sign an identical contract and dates and exchanges the contracts forwarding a signed copy to the parties respective solicitor/conveyancer. In these circumstances the buyer will generally receive the benefit of five (5) business day cooling-off period in which to obtain legal advice about the terms of contract, arrange finance (if necessary) and obtain inspection reports on the property (if required). It is sometimes possible to get an extension of the cooling-off period if the vendor agrees. If the buyer decides to pull out of the contract before the cooling-off period expires the 0.25% deposit paid will be forfeited to the vendor. If the purchaser otherwise wishes to proceed with the purchase the full deposit amount stated in the contract (less the 0.25% previously paid) must be paid prior to the expiration of the cooling-off period.
- If contracts are not exchanged by the vendors agent, the agent will notify the vendor’s solicitor/conveyancer of the sale particulars in order that a contract may be issued to the buyer’s solicitor/conveyancer. The buyer’s solicitor/conveyancer will arrange for their client to sign the contract and make arrangements with the vendor’s solicitor/conveyancer to exchange such contract for one signed by the vendor once the terms have been negotiated, confirmation of written loan approval has been received and the results of any property inspection reports are known to the purchaser. The purchaser is required to pay the full agreed deposit amount specified in the contract at the time that exchange of contracts is effected.
Settlement (also known as completion)
Once the contracts have been exchanged and any cooling-off period has expired your matter will then proceed to completion. The majority of property transactions are finalised within 4-6 weeks from the date contracts are exchanged, however this can vary depending upon the requirements of the buyer or the seller and the completion date specified in the contract. If you have any special requirements in this respect it is important that you discuss these with us at the commencement of your matter.
If you are borrowing to assist with your purchase we will liaise with your lending institution in respect to the signing of any mortgage documents and in satisfying your lenders requirements so as to ensure that the borrowed funds will available on the date of settlement. We will additionally arrange for the collection and payment of any required stamp duty on the contract and conduct further investigations with relevant Government departments to ascertain whether any have proposals which may affect your future use of the property. We will also ascertain the current status of the sellers payment of local council and water rates and land tax (if applicable) and strata levies (if the property is a unit) all of which will be adjusted on the settlement date. This will ensure that all arrears are paid by the seller either prior to completion or from the sale proceeds.
On the date of settlement you are generally entitled to possession of the property which should be left in a clean and tidy condition by the seller. The keys to the property will usually be available for collection after settlement from the vendor’s selling agent. There are a number of other steps that you should consider taking once settlement of your purchase has taken place all of which can be found in our Bateman Battersby “Things to Do when Moving House-Buying”; guide.
Once settlement has been completed the local council, relevant water authorities and the Valuer Generals office will be advised of the change in ownership of the property so that all future rate an valuation notices are directed to you as the new owner.
You’ll find more information in our “Buying a Residental Home or Investment Property” guide and answers to some of the most commonly asked questions about buying your home, unit or land in our “FAQ’s section“.
You can accurately calculate the costs and disbursements in will incur in your purchase by accessing our Bateman Battersby Purchase Budget guide. If you require further information in regards to the cost of your proposed transaction or wish to discuss any other matter dealing with your property purchase please contact a member of our Property Law Team on 4731 5899 or send us an email to firstname.lastname@example.org.
At Bateman Battersby Lawyers Penrith our Conveyancing & Property Law Team can assist you with:
- Obtaining pre-purchase inspection reports
- Buying rural property
- Off-the-plan purchases
- Strata and community title matters
- Stamp duty calculations
- Eligibility for First Home Ownership Grant and First Home-Plus stamp duty scheme
- Details about the impact of land tax, capital gains tax and the GST arising from your purchase
- Strategies that you can adopt if you are looking to sell another property in tandem with the purchase of your new residence