A Guide to Buying a Property03-04-2016 | Resource
At Lamrocks, we understand how important your purchase is to you and we work hard on your behalf to ensure everything runs according to plan. We have the knowledge, skills and experience to identify any potential issues before they become a problem and we make sure you understand your rights and obligations every step of the way.
Securing your Finance
Before you enter into a Contract to purchase property, you must know how you will be paying for it. If necessary you should also have arrangements in place to obtain finance in advance, and pre-approval from your lender.
Securing finance can sometimes take a number of weeks and you should make enquiries with your lender before signing any Contracts – if you can’t raise the funds to purchase a property after signing the contract, you could lose your deposit.
Enquiries and Reports
Part of the purchase process involves conducting relevant searches on the property prior to exchanging contracts, to make sure there are no issues that could affect you in the future and that the property is structurally sound and free from termites.
The most common reports obtained before purchasing a property is a Pest and Building Report. Lamrocks Solicitors can obtain this on your behalf from the relevant experts. Unlike many other law firms and conveyancers, the cost of this report is included in our overall fee.
Exchange and Cooling Off
The term “Exchange” means that both the purchaser and the seller have agreed on the deal, signed a copy of the contract and given it to each other. Once an exchange takes place, the property is no longer on the market and the seller is legally bound to the deal.
In NSW, contracts are often exchanged in the real estate agent’s office and the purchaser has a period of five business days after the exchange within which they can pull out of the deal by providing written notice to the seller. This period is called the “cooling off” period.
If you are purchasing a property, Lamrocks can negotiate on your behalf to extend the cooling off period (for example if you are waiting on confirmation of finance or the results of additional building reports). In some cases, it can also be waived entirely.
Once the cooling off period has expired however, the full deposit (which is usually 10% of the purchase price) is payable, and as a purchaser, you can no longer pull out of the deal. The remaining balance of the purchase price is paid upon settlement.
If you are buying a property it is important that you budget for the payment of Stamp Duty. Stamp Duty, or Transfer Duty, is a State Government tax paid on the transfer of property from a seller to a buyer. The amount payable is calculated based on the purchase price of the property, as stated in the Contract of Sale, and is a significant expense that you need to account for.
You should make enquiries regarding the amount of Stamp Duty that applies to the purchase of a property before signing the contract, to make sure you have adequate finds to cover the expense.
A Stamp Duty calculator is available on the Office of State Revenue’s website at www.osr.nsw.gov.au that can be used to determine how much you will have to pay.
The Purchase Process: A Summary