Before entering into a contract to purchase a property you need to know what searches and work you need to undertake. You may decide to enter into the contract with a five (5) day cooling-off period or exchange contracts after you have carried out your pre-purchase inquiries.
Things to consider:
Between exchange of the contracts and settlement, we will satisfy all requirements with any incoming mortgage and undertake any necessary searches. It is important to obtain a pest and building reports, prior to exchange of the contracts or before the cooling-off right expires. Both reports are at the buyer’s expense and there is no right of reimbursement from the seller if the buyer does not go ahead with the purchase. If you exchange with a five (5) day cooling-off period you will pay .25% of the purchase price.
If you decide not to proceed with the purchase because for example issues were raised in the building report, you can rescind the contract and you would lose your .25% deposit. There is a reason why some people elect to carry out all pre-purchase inquiries, including having the contract explained by the solicitor before exchanging contracts.
Contact Linda Emery for legal advice on your purchase contract.
Most buyers need time after deciding on the house to get approval for a loan to buy it. Contracts can sometimes be exchanged subject to a ‘finance clause’. A finance clause is an escape route or emergency exit for the buyer for a limited period of time. If the buyer cannot obtain finance as described in the clause, the contract can be cancelled. Without a clause, the buyer has only the cooling off period of five business days within which to arrange for a loan or to withdraw from the contract.
When a property is purchased in New South Wales, duty is payable by the buyer to the state government, based on the purchase price being paid. No buyer’s duty is payable if it is the first residential property the buyer is purchasing, as long as the purchase price is under $500,000 and any spouse or de facto has not previously owned a residential property separately or with some other person in any state or territory of Australia.
There are time limits for payment of duty on the contract. If the duty is paid late, interest will be payable.
Title to land in New South Wales is recorded in Land and Property Information, which is administered by the Registrar General. To buy a Strata Title unit is to buy into a democratically governed community of owners. One important condition applies to a purchase of a Strata Title unit. The unit’s seller is required to give the buyer a certificate with details of the maintenance levies payable each quarter.