HELPFUL RESOURCES
It’s exciting purchasing property and it’s easy to forget about the little things when you have a lot on your mind.
We have put together a few resources for you.
Be sure to also take a look at our blog for important information about property conveyancing.
Helpful Resources
First Homebuyers
Being a First Homebuyer these days is tough! Trust us, we know. It’s a tough market out there, prices just keep going up, and more and more people keep getting locked out. For many first homebuyers, it constantly feels like a dream that is just… slipping away.
But – people everywhere are still managing to achieve the Great Australian Dream of home ownership. And our practicing area of the NSW Northern Rivers & South East Queensland is a beautiful place to buy up, get settled, and either raise your family, enjoy life, kick start your pet projects, or whatever makes you tick.
Thankfully, Far North Coast Conveyancing can help, through our affordable rate, and through links to the resources below. Check out our helpful blog article too.
Please note – this advice is general in nature only. You should seek formal advice for your particular circumstances.
First Homebuyer Schemes & Transfer Duty (formerly known as Stamp Duty)
Being a conveyancer, Far North Coast Conveyancing cannot offer formal advice on a mortgage. You should seek financial advice for this.
Generally, a purchaser must normally pay Transfer Duty on their property purchase. This amounts to roughly 4% of the purchase price, but varies from property to property. This must ordinarily be saved in addition to your Deposit.
However, the NSW and QLD governments have First Homebuyer schemes, which allow you to skip paying this in certain circumstances. This can save you tens of thousands of dollars off your deposit. Please enquire with us to confirm your eligibility for any First Home Buyers schemes in NSW or QLD.
First Home Deposits
For many first-home buyers, the toughest hurdle is the deposit. The longer it takes to save, the longer you stay locked out of the market, and around the cycle goes.
Many banks are offering potential customers with good credit histories and stable jobs, the ability to borrow more than 80% of their home. To do this, the bank generally requires you to pay a fee known as Lenders Mortgage Insurance (LMI). This protects the bank (not you) against the prospect of you defaulting. And it’s expensive! However, many first-home buyers are choosing to take this step. You should seek further advice from your bank about this.
The NSW and QLD governments have their respective First Home Owner grant schemes. In some cases, you may be entitled to a limited cash grant from the government, which can assist your deposit. This is generally reserved for new homes (i.e. newly constructed homes that have not been previously lived in).
The Bank of Mum and Dad has also been increasing in prevalence. Again, you should discuss this first and foremost with your family, and also your bank. Your family may choose to gift you a contribution towards your deposit or sign on as a guarantor, or for investment loans, you may also be able to co-contribute (i.e. your family buys a share of the house).
Buying: The Conveyancing Process
The property buying process can be a complex one! There can be a minefield of legal, financial and procedural hurdles to clear. To make things easy, we have outlined the Property Purchase process below. Please contact our team if you have questions about this and also check out our blog.
CONTRACT DRAFT & SALE ADVICE
Congratulations!
At this stage, you have either made a successful offer on a property or been the successful bidder at Auction. Alternatively, perhaps your sale has been conducted privately or “off-market”, or some other process has taken place.
A contract will be drafted that contains the details of the property and the sale. It is important that you have your solicitor explain the effect of the contract to you before you sign.
Once you sign the contract, and it is exchanged, this is generally binding – see further below for more information.
BUILDING AND PEST INSPECTIONS
The seller of a property is only required to disclose any matters affecting the title (i.e. Title Deed) to the property. They are not required to disclose any defects regarding the building itself, including its condition, known defects or problems, including pest problems.
Before you commit to purchasing, you should obtain both pest and building reports from reputable and licensed inspectors.
Please note, that if you are purchasing your property at Auction, your Due Diligence (Build, Pest and Finance) must be conducted prior to Auction.
FINANCE
Prior to making your offer, you have most likely obtained either a Pre-Approval or Formal Finance (unconditional) approval. It is essential you have unconditional written finance approval before the contract is exchanged, at which point it becomes binding and unconditional. Alternatively, if there is no financier, ensure you have sufficient funds to complete the purchase.
PAYMENT OF THE DEPOSIT
The deposit must be paid on or before the contracts being exchanged. The deposit is usually 10% of the purchase price.
EXCHANGE OF CONTRACTS
This is a big moment in the sale process. As a buyer, all of your Due Diligence must be completed prior to this step.
Once the vendor and purchaser agree to the terms of sale, the Contract is finalised in duplicate, and compared to ensure they are identically dated and “exchanged”. When contracts are exchanged, both the Buyer and Seller are legally bound to complete the transaction within the prescribed settlement period.
THE COOLING-OFF PERIOD
By law, NSW Residential Property sales have a cooling-off period of five business days before the contract becomes binding. However, in recent years, this cooling-off period is generally waived by the Buyer. If you waive your cooling-off period rights, you are bound under the contract.
INSURANCE
The risk of damage stays with the vendor up until the completion of the purchaser taking possession of the property. We do recommend that you take out a cover note as you do have an interest in the property.
TRANSFER DUTY (STAMP DUTY)
Transfer duty is payable on the Contract and is due on completion or up to 3 months from the date of exchange. If you have a mortgage your financier will require the contract stamped on completion. First Home Buyers can sometimes be offered exemptions on Stamp Duty, this is dependant on the state you are purchasing in, and your circumstances, please contact us for further information about this.
SEARCHES
It will be necessary for us to carry out various searches of the property. These searches will investigate whether any government authority (e.g. Local Councils or State Governments) have any plans that will adversely affect the property, or whether there are any statutory charges levied against the property that require payment or adjustment. This process can also be used to check if alterations to the land or property have been done with proper council approval.
PRE-SETTLEMENT INSPECTION
Once settlement takes place it is too late to find out that some of the inclusions are missing, or that something has been damaged! We recommend you or your agent inspect the property a day or two prior to settlement.
SETTLEMENT
The day of settlement is determined by the date of exchange and is normally 28 days after that date, but this can vary with agreement between the parties. The settlement time is determined by the availability of all parties to the transaction, including banks if they are part of the transaction (i.e. providing or discharging a mortgage).
It is at settlement that the deeds to the property are handed over to the buyer, the buyer makes payment for the property, and the banks transfer their agreed mortgage or loan.
AFTER SETTLEMENT
Immediately following settlement the agent will be advised and he will release any keys. The transfer will be lodged with the LPI and if you have borrowed money the Title Deeds will be retained by them.
Time to celebrate in your new home!
Selling: The Conveyancing Process
SALE BY AGENCY OR PRIVATELY
When selling your property, many people choose to engage a Real Estate Agent to list the property for sale and negotiate a price. Your Agent must have an agency agreement signed before they can list your property for sale. Your Agent will negotiate with interested buyers in the area, and this process will generally determine your property’s final value. Alternatively, your property may be listed for sale at Auction.
DRAFTING OF CONTRACT
Once you have either accepted a verbal offer to purchase or decided to list the property for sale at Auction, a contract will be drafted. The contract details the conditions of the sale, together with what is included in the sale. There are certain documents that must be attached to the contract. We will prepare the contract and provide it to the agent.
DUE DILIGENCE BY BUYER
In a regular “Private Sale” (i.e. not an Auction), the buyer will generally conduct Due Diligence on the property at this time. This generally includes building and pest inspections, and confirmation of finance if required.
Under Auction conditions, Due Diligence is generally conducted by buyers prior to Auction.
EXCHANGE OF CONTRACTS
Once the vendor and purchaser agree to the terms of sale the Contract is finalised in duplicate, compared to ensure they are identical dated and “exchanged”. Under Auction conditions, this generally happens the same day or the following business day.
Contract Exchange is a formal part of the conveyancing process; after this time, you are legally obligated to complete the sale of the property, and cannot change your mind.
THE COOLING-OFF PERIOD
In NSW, Residential property sales can have a cooling-off period of five business days before the contract becomes binding. However, in recent times, this cooling-off period is generally waived by the buyer.
INSURANCE
The risk of damage stays with the seller up until completion, or when the purchaser takes possession of the property. The seller is legally obliged to hand over a property in the same condition as the purchaser inspected it.
DISCHARGE OF ANY MORTGAGE
If you owe money to a lender who has a mortgage registered then you will need to have the mortgage discharged at settlement. We will communicate with your mortgagee requesting that everything is prepared in readiness for settlement.
If you do not owe any money, the Title Deed will be required to complete the settlement. If we do not already hold it, please ensure it is delivered to our office prior to settlement.
COUNCIL RATES, WATER AND STRATA LEVIES
The Contract provides that council rates, water and Strata Levies be adjusted at settlement. They will be adjusted so that you pay rates up until the day of settlement. They are adjusted as if the rates are paid in full regardless of whether they are or not. Any outstanding rates are paid from the sale proceeds.
PRE-SETTLEMENT INSPECTION
It is standard practice for the Buyer, or their Agent, to conduct a pre-settlement inspection. This is to ensure that you, the seller, have met your obligations under the contract and are ready to hand over the property in a fit and proper condition.
SETTLEMENT
The day of settlement is determined by the date of exchange and is normally 28 days after that date. You generally need to make arrangements to vacate the premises prior to or by the time of settlement. The settlement time is determined by the availability of all parties to the transaction.
The property should be left in a clean and tidy condition and all possessions moved from the property by settlement time. It is at settlement that the deeds to the property are handed over for payment of the sale price.
AFTER SETTLEMENT
At settlement, we will account to you for any of the proceeds of sale that are paid to you after all adjustments and any loan repaid. Often the sale proceeds are not available until the next working day.
Moving Checklist
- Notify us when you have made an offer
- Make an appointment with your financier & ensure all documents have been provided to process the application
- Obtain pest & building inspection reports
- Make an appointment with us once the contract has been received
- Make enquiry of removalists as to availability and consider making a tentative booking
- Notify us immediately once reports are received from the builder and pest inspectors, and once finance approval received from the financier
- If you are satisfied with the above and the contents of the contract, instruct us to exchange
- Take out a cover note to insure the property upon receipt of the mortgage
- Documents sign and return to the financier
- One week before settlement, if you have not already been contacted by us, contact us to see how the matter is progressing
- Approximately one week before settlement contact: the phone company, power company and gas company (if applicable) to arrange a changeover
- Notify the following in relation to your new address and contact details: state/commonwealth electoral offices post office, Delivery people, Family & friends, banks, share registries, building societies and insurance companies, other relevant bodies concerning credit cards, social welfare payments, subscriptions, club membership, rta for vehicle registration and licensing
- Arrange for re-direction of mail
- Once we have confirmed settlement figures, ensure the loan from the financier is sufficient to cover the monies required on the day of settlement, and if not, arrange to deliver the balance of purchase money to our office prior to settlement.
- Once the settlement date has been confirmed with us, reconfirm the date and time for the removalist (ensure the removalist will not be at the property prior to settlement time unless another agreement has been reached with the vendors).
- Advise us of your forwarding address and telephone number (if different to the property being brought)
- Ensure we have a contact number for you on the day of settlement in case of last-minute hitches
- Arrange a final inspection of the property with the real estate agent for the morning of settlement
- Collect keys from us or the agent once the settlement has been completed
- If not already done, arrange and pay insurance for household and contents insurance
- If relevant, cancel any insurance coverage on the prior property.
