The process of buying a home can be confusing and we wish to make this process as clear to you as possible. When you have found a property that you love, it is time to make the move to approach the seller or the real estate agent to make an offer.

The contract is usually prepared by the real estate agent, and it is time to engage a solicitor for advice on the terms of the contract, obligations and any special conditions. The contract then will be delivered to the seller and the conveyancing process will begin if the seller accepts the offer.

Once the offer has been accepted, the deposit amount will be payable upon the signing of the contact. If there are no obligations or any special conditions on the contract, the full contracted price will be paid at the settlement date.

Further actions are required if there are obligations and special conditions on the terms of the contact.

What’s include in the obligations?

  • Cooling-off Period:

A cooling-off period is a short period after committing to a home purchase where the buyer can change their mind. During this time, the buyer may withdraw their offer for any reason.

The cooling-off period starts on the date that you sign the contract and ends close-of-business on the final day of the designated period. This gives buyers a short space of time to complete any necessary valuations and property checks before fully committing to the purchase.

In Queensland, a monetary penalty 0.25% (the monetary penalty varies between states) of the agreed purchase price will apply if you wish to revoke the offer during the cooling-off period.

  • Subject to Finance:

Subject to finance is a standard condition in home purchase contracts used in Queensland. This clause gives you certain amount of time to organise a loan for the property you are buying. If your loan application is refused, you will have a right to end the contract and not go through with the sale without losing your deposit.

  • Building and Pest Inspection:

A building and pest inspection allows you to get written reports from qualified building and pest inspectors about the property. Building and pest reports can identify a number of issues range from minor problems to serious issues such as termite infestation or structural damage. If the report contains significant defects, you will be able to ask the vender to repair the damages or a deduction of the agreed contract price, otherwise you will have the right to terminate the contract without losing your deposit.

  • Special Condition:

These additional conditions in the contract are included to provide you more certainty, protection and peace of mind when buying a property. Special Conditions can range from a usual due diligence clause to ensuring the seller cleans the property prior to settlement.

  • FIRB (Foreign Investment Review Board) Approval:

FIRB is an Australian government department that assesses applications from foreigners who would like to invest or buy a home in Australia.

Temporary residents on a spouse visa, 457 work visa, Temporary Skill Shortage (TSS) visa or student visa need approval from the FIRB and can only buy one established dwelling, and it must be live in. You are required to sell the property once you do not live in it anymore. Temporary residents and foreign investors must buy a new property or vacant land to build a new property as an investment property.

You do not need FIRB approval if you are buying the property with an Australian citizen as joint tenants and you are in a spousal relationship. This does not apply to other relationship such as business partners, parents and child, siblings, friends or relatives.

To ensure sufficient time for screening applications, the Foreign Investment Review Board (FIRB) will work with existing and new applicants to extend timeframes for reviewing applications from 30 days to up to six months.

FIRB charges an application fee to all foreign investors who want to buy land or property in Australia. Fees can vary depending on the value of the residential property or land that you want to purchase.

  • Unconditional – Preparing for settlement:

When you have obtained satisfactory of the special conditions; finance and you are happy with your building and pest report. Your solicitor will conduct any property searches, prepare the legal documents required and liaise with your financial provider to ensure that sufficient funds are available for settlement.

Your solicitor will calculate any adjustments with respect to outgoings on the property and organise cheques to be drawn by your financial provider. Under the terms of the standard contract, you will have the right of a final inspection of the property to ensure that the property has remained or refurbished to the conditions as stated in the contract or initially inspected.

  • Transfer duty:

Buying property in Queensland is a dutiable transaction, which means that Transfer Duty will be payable. Your solicitor will be able to tell you how much duty is payable on your purchase and whether or not you eligible for any duty concessions or grants. Your solicitor will also facilitate the payment of the transfer duty and the amount must be paid within 30 days of settlement.

  • Insurance:

The terms of the standard contract provide that the property is at the Buyer’s risk from 5:00pm the day after the contract date. It is important to organise appropriate insurance as quickly as possible.

  • Settlement:

Settlement is the day that the contracted price is paid by the buyer and the seller transfers the property free from encumbrances. This is usually done at an agreed location where both parties’ solicitors meet to exchange cheques and documents with each other and the parties’ banks. After settlement has been effected, the transaction is complete.

 

Morrison Specter has a professional team of lawyers to provide you the best legal advice and strive for the maximum benefits.