You’ve done your research and you’ve found a property that is right for you. Fantastic! But whereto from here? Below is an overview of the typical steps taken when buying a residential property in Queensland:
You should retain a lawyer to handle the conveyancing process on your behalf. Although it is possible to self-act, the process is complicated and you are best protected by securing the services of a law firm with specialist conveyancing lawyers who know how conveyancing works. Buyers will often retain a lawyer following negotiation and signing of a contract for the sale of a property. However, we recommend that you provide a copy of the draft contract to your lawyer before signing so that your lawyer can discuss any issues with you that may need to be resolved before you sign the contract.
The parties negotiate and sign a contract for the sale of a property. As a buyer, when negotiating the terms of the contract, it is important that you consider:
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Most contracts for the sale of residential land in Queensland are subject to a five day cooling-off period (starting from the date that you or your lawyer receive a copy of the fully signed contract). However, there are a number of instances where a cooling-off period will not apply to a contract including one that was formed at auction.
Please ask your lawyer prior to signing the contract whether or not a cooling-off period will apply. If the contract is subject to a cooling-off period, and you have a change of heart regarding the purchase, you may terminate the contract under the cooling-off period (provided that you are still within the period). If you do terminate the contract under the cooling-off period, the Seller may elect to charge you a 0.25% of the deposit paid termination penalty.
Commonly, the risk for a property will pass to the buyer from the first business day after the day that the contract was signed by both parties (despite the buyer not owning the property yet). As such, it is important that the buyer arranges insurance for the property as soon as the contract is signed by both parties so that it is covered in the event of damage to the property during the contract period (ie, by flood or fire).
You will be in breach of the contract if you do not pay your deposit when required. As such, it is essential that you pay the initial deposit, which is often due on signing or shortly after, and the balance deposit (if any) in accordance with the timeframes noted in the contract (even if the agent has suggested that you can pay the deposit at a later date).
If your contract is subject to finance, you will be responsible for making an application for finance approval. You should make this application as soon as possible once the contract has been signed so that there is adequate time for you to obtain approval (or otherwise) from your bank or financier prior to the finance date. You may choose to engage a finance broker to assist you in this regard.
If your contract is not subject to finance, you will be responsible for arranging sufficient funds to complete the purchase.
Remember, sufficient funds to complete the purchase should include an amount required for transfer duty (previously known as stamp duty), any titles office registration fees and legal fees.
If your contract is subject to a building and pest and/or a pool safety inspection, you will be responsible for arranging these inspections. We recommend arranging the inspections as soon as possible once the contract has been signed so that you obtain the results of your inspections well before the inspection date. This will give you enough time to make further enquiries if need be before you decide whether or not you are satisfied with your inspection reports.
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Your lawyer will conduct searches on the property to ascertain whether there are any matters affecting the property which may concern be of concern to you. If there are any adverse findings, you may have rights against the seller or be able to terminate the contract. Your lawyer will advise you of your rights.
Your lawyer should outline which searches they will conduct on your behalf. Notify your lawyer if there are any additional searches you would like performed on your behalf or if you have any specific concerns about the property. Not all adverse search results will give rise to rights against the seller or an ability to terminate the contract.
In most instances, you will be required to pay transfer duty on your purchase. Transfer duty can be quite substantial and will vary depending on the purchase price, whether you are going to live in the property and a number of other factors. Transfer duty must be paid within 30 days of the contract becoming unconditional and is commonly collected by your lawyer, together with any additional funds required from you, to complete settlement. Your lawyer will advise you of the amount required for transfer duty and once received will arrange stamping of your transfer and payment of the transfer duty with the Office of State Revenue.
In most instances, the buyer has the right to conduct an inspection of the property prior to settlement. A pre-settlement inspection is usually conducted by the buyer 1-2 days prior to settlement in the presence of the agent. The purpose of the pre-settlement inspection is to ensure that the property is in the same condition as when the buyer contracted to purchase it and that any included chattels remain at the property. Please contact your lawyer immediately if there is an issue with your pre-settlement inspection as it is imperative that these matters be resolved prior to settlement.
The parties’ lawyers will prepare and exchange the formal documents that will change the title once lodged. The buyer’s lawyer will most likely sign the transfer document on your behalf whereas the seller must sign the transfer documents themselves.
The parties’ lawyers will prepare settlement calculations taking into account the amount of the deposit the buyer has already paid, rates, water, and body corporate levy apportionment (if applicable) and any other necessary adjustments. Your lawyer will liaise with your financier in relation to the funds required for settlement and any release of mortgage required from the seller’s financier. If you have obtained a loan to purchase the property, there may be a shortfall of funds and your lawyer will notify you of any additional funds required from you to complete the purchase. Please ensure that you follow any direction given to you by your lawyer in relation to additional funds required for settlement to avoid any delays or breaches of contract.
Your lawyer should provide you with an initial letter which outlines important contract information and things for you to do. Please read this information carefully and provide your lawyer with any requested information/documents as soon as possible to avoid any unnecessary delays.
The parties’ lawyers will attend settlement to exchange the purchase price (less any deposit paid by the buyer) for the documents to change the title. The buyer is now free to take possession of the property.
Generally, the agent will hold the keys for the property until settlement has occurred. The parties’ lawyers will notify the agent once settlement has occurred and the agent may then release the keys to the buyer. However, the buyer can arrange in advance for the seller to provide the keys to its lawyer at settlement if this is preferable for the buyer.
Once settlement has been effected, the documentation to transfer the title will then be lodged with the Land Titles Registry and within a few days, the title will be updated to reflect the new owner. If the buyer has a financier at settlement, its financier will be responsible for lodging the transfer of title. The buyer should seek confirmation from his/her lawyer or financier (depending on who lodged the documents) that the transfer of title has occurred. The local council will update its records upon registration of the transfer of title at the Land Titles Registry.
The buyer’s lawyer will also notify the body corporate (if applicable) of the change of ownership.
It is important that you remember to act in a timely manner throughout the buying process. Remember that the seller is not obliged to agree to any extension of any due date under the contract and may have rights to terminate the contract, take your deposit and sue you if you do not comply with your obligations under the contact by the date required. Speak to Certus today
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