The steps in buying a residential property are:
1. You must confirm your finances in writing before you start looking to buy. Your lender should be able to give you a letter indicating the amount the lender will lend you when you purchase subject to valuation and the other conditions of the lender. Ensure that you allow for stamp duty and legal costs when preparing your purchase budget.
2. You find a property to buy and you discuss with your accountant and/or your lawyer the asset protection issues of your purchase.
3. The vendor’s lawyer will send your lawyer a copy of the contract for sale.
4. You consider with your lawyer whether there are any reports that you should get prior to exchange such as:
(a) Building report
(b) Pest report
(d) Council building certificate
(e) Strata report
5. Your lender confirms in writing formal lender approval of your finance.
6. You review the contract with your lawyer and ask the vendor’s lawyer for any changes to be made to the contract.
7. When you are happy with any required amendments, you sign the contract.
8. You pay the 10% deposit (or an amount as agreed) and the contract is then exchanged with the vendor’s signed contract. The agent normally holds the 10% deposit.
9. Residential contracts have a 5-day Cooling Off period which the vendor will usually ask to be waived by the purchaser’s solicitor completing a Section 66W certificate which is handed over on exchange of contracts.
10. If the Cooling-Off period is not waived, the cooling-off period ends at 5pm on the 5th business day after exchange.
11. During the Cooling-Off period you can choose to end the contract. If you end the contract, you must give to the vendor 0.25% of the purchase price.
12. As soon as you have exchanged, your lawyer will:
(a) order all searches required to be done
(b) send property details to your lender (if any) so that the lender can prepare mortgage documents. When the lender prepares the mortgage, you sign mortgage documents (normally directly with your lender). Your lender may want your lawyer to be involved in that process, but the lender will tell you
(c) send “requisitions” about the property to the vendor’s lawyer. “Requisitions” are questions about the property. Sometimes an answer will disclose something which is important for you to know, and which you could not have otherwise discovered.
(d) prepare the Transfer document which is sent with the contract and a cheque for the payment of stamp duty to the Office of State Revenue for stamping.
(e) prepare settlement figures, including adjustment of rates etc and then sends draft settlement figures to you and the vendor’s lawyer
(f) confirm the settlement date with you, the vendor’s lawyer and your lender and sends a cheque direction to your lender
13. You arrange to connect water, electricity, telephone and other services to the property from the date of settlement.
14. You arrange to collect the keys immediately after settlement from the agent.
15. Settlement takes place. You do not need to be at the settlement. The balance of the purchase price is paid. Your loan is drawn down and the title deeds are handed to your lawyer / your lender for registration of the title in your name.
By Margot Gill
This article is general information only and should not be relied on without obtaining further specific information.