Whether Buying or selling a property it can be some of the biggest decisions and investments in your lives, so you want to make sure it is done correctly.
One of the benefits of Catron Simmons Lawyers, is that you know exactly who is handling your matter and we are just a phone call away for any questions you may have. We also have the ability to be wholly electronic meaning there is no requirement to attend our office in Bella Vista unless, you wish too.
At Catron Simmons Lawyers we can help assist and take away what often feels like a confusing and stressful time. We are here to guide you through the process and ensuring it as smooth as possible.
Buying your future home is an important and daunting experience, but it doesn’t need to be with the assistance of Catron Simmons Lawyers.
Stages of Buying a property
Pre-Approval (Before you start looking)
You will likely need to obtain a pre-approval loan from the banks to finance the purchase. We recommend that you do this before you start looking so you know what your borrowing capacity is actually going to be. There is no point looking at a two million plus dollar house if you cannot service the mortgage.
Like with any contract you should obtain legal advice, to understand your rights and obligations including any fees or restrictions that you may be subject to under the contract.
Found your Potential Property
Once you have found a property, it is always advisable to obtain a pre-purchase inspections. The most common reports are the building and pest inspection report and for strata run properties a strata report.
These reports tell you the condition of the property and examine potential problems so that you have all the information you need to make the right decision.
There are also some simple things that you can do to ensure that the property is right for you, examine the property thoroughly, talk to the neighbours, ensure you are familiar with the area – go for a walk and drive, check out the local shops/schools/playgrounds/daycares etc.
With any property purchase there is a degree of risk, however, off the plan contracts generally hold more risk than a property that has already been built. As you are unable to examine the quality of work and a number of these major construction firms can shut down mid build leaving you stranded. It is critical that you complete you due diligence for all properties.
Offer & Acceptance
If you are satisfied with everything, an offer is made for the property. It is important to remember that the verbal offer does not “secure” the property for you, an exchanged contract is required to ‘take a property off the market’. It is critical at this point to be talking (if you have not already) to your lawyer, as your offer may be affected by information in the contract for example a large easement or restriction on the land.
The Contract / Exchange
With Cooling Off
If your offer is accepted, you will be required to sign the contract and pay 0.25% of the contract price to the agent with a 5 business day cooling off. Meaning that you can pull out of the contract in this time and only lose the 0.25% deposit.
During the cooling off, you must ensure that you have obtained unconditional loan approval and completed all your pre-purchase inspections reports. At the end of the cooling off period you are required to pay the full deposit (being 9.75%) to the vendor’s representative (typically the real estate agents).
Auction Conditions: No Cooling Off
If your offer is accepted subject to a s66W or at auction and, you are purchasing the property without a cooling off period. This means that when you sign the contract you unless in specific and often rare circumstances can you terminate the contract without significant loses. On signing the contract, you are required to pay the full deposit being 10% to the vendor’s representative.
Contract to Settlement
After the contract has been signed, your solicitors will make a number of inquiries/tasks including but not limited to:
Payment of Fees and Government Charges i.e. stamp/transfer duty
checking for outstanding debts with council, water supplier and/or strata
The solicitor will also be required to attend to settlement along with the vendor solicitor and relevant financial institutions.
This is where the title for the property and keys will be handed over in exchange for the payment.
Buying a Property
What does the 'cooling off' period mean?
The cooling off period is a period of time, typically 5 business days where the purchaser can change their minds and pull out of the contract.
If the purchaser does decide to pull out of the contract, they will lose their holding deposit which is typically 0.25% of the total purchase price paid on signing the contract.
There is typically no cooling off period on auctions, when the purchaser signs a s66W Certificate is signed waiving a cooling off right.
What is the difference between a private treaty or sale and an auction?
A private treaty occurs when a property is listed for sale, the purchaser makes an offer and it is accepted by the vendor. The contract is then signed and contracts are exchanged. There is typically then a cooling off period of five business days.
An auction is where prospective purchasers gather following a sale period and bidding is conducted on the property. Once the property is placed on the market is is a case of the highest bidder wins the property. Typically the purchaser signs a waiver of their cooling off rights.
What is a 66W and what is the effect of it?
A 66W certificate is the waiver by the purchaser to a cooling off period.
The effect of which means, that if a purchaser pulls out of a contract under the 66W conditions they generally forfeit the full 10% deposit of the purchase price.
There is also the risk that you may be liable for any difference between your offer and the subsequent sale of the property.
Under the Act, a s66W certificate must set out the following:
the name of the legal practitioner and where they are admitted to practice (or the name or a licensed conveyancer);
a statement that the legal practitioner provides the certificate in line with section 66W of the Act;
reference to the name of the property, the vendors and the purchasers;
confirmation that there is no cooling off period for the contract;
a statement that the legal practitioner does not act for the vendors; and
a statement that the legal practitioner has explained to the purchasers:
the effect of the contract for the purchase of the property;
the nature of a s66W certificate; and
the effect of no cooling off period.
What is the difference between tenants in common and joint tenancy?
You should obtain legal advice on this issue as advice will differ according to each situation.
Joint Tenants
All own equal shares of the property proportionate to the number of tenants involved. Joint tenants have the right of survivorship, that is the percentage of the deceased person passes to the surviving other tenants.
Tenants in Common
Tenants in Common ownership is determinate according to the percentage each tenant holds in the property. This percentage is typically decide at the point of transfer and/or sale.
Tenants in common do not possess a right of survivorship and the deceased’s ownership of the property passes according to their estate.
Stamp Duty is a tax charged by the government when you buy a house. The amount required to be paid depends on the property’s value and any concessions that may be applicable.
From 1 July 2023, a full exemption from transfer duty will be available if you are buying a new or existing home valued up to $800,000, while homes valued over $800,000 and less than $1,000,000 may qualify for a concessional rate.
If you are purchasing vacant land on which you intend to build a home, you may receive an exemption for land valued up to $350,000 and a concessional rate for land valued over $350,000 and less than $450,000.
Property value
Exemption
New and existing homes
Value is equal to or less than
$800,000
Exempt
You can apply for a full exemption from transfer duty.
Value is above
$800,000
and less than
$1 Million
Concessional rate
You can apply for a concessional transfer duty rate.
Vacant land
Value is equal to or less than
$350,000
Exempt
You can apply for a full exemption from transfer duty.
Value is above
$350,000
and less than
$450,000
Concessional rate
You can apply for a concessional transfer duty rate.
What is the First Home Owner (New Homes) Grant?
A $10,000 First Home Owner Grant (FHOG) is available when you buy or build your first new home.
Your first new home can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated.
If you purchase a newly built house, townhouse, apartment, unit or similar the purchase price must not exceed $600,000.
If you purchase vacant land and sign a building contract with a builder then we add the value of the vacant land plus the value of the comprehensive home building contract plus the cost of any building variations done together. The total combined cost must not exceed $750,000.
What is land tax? Do I have to pay that as well?
Land tax is a tax levied on the ownership of land. It is usually imposed annually and is based on the value of the land you own that are investment properties, meaning your principal place of abode is not included.
There is a land tax threshold below which land tax is not payable. For 2024, the threshold in NSW was $1,075,000. This means if the combined value of your land holdings is below this amount, you won’t be liable for land tax. If it’s above this threshold, you will pay tax on the value above it.
A strata scheme is a building or collection of buildings that has been divided into ‘lots’. Lots can be individual units/apartments, townhouses or houses. When a person buys a lot, they own the individual lot and also share the ownership of common property with other lot owners. Common property generally includes things like gardens, external walls, roofs, driveways and stairwells.
It’s important for you to be aware of the additional and different responsibilities and responsibilities that apply to living in a strata schemes if you are considering purchasing a lot in a strata scheme. Some activities may be more restricted than if you were living in a freestanding house – for example, where you can park your car or how you can renovate your lot.
“Off the plan” refers to the process of purchasing a property, typically an apartment or house, before it has been constructed. Buyers commit to buying the property based on architectural plans and drawings rather than seeing the completed structure.
PEXA is an acronym for Property Exchange Australia. PEXA is a platform or multi-level digital workspace that allows settlements to occur in the digital world in real time.
What is a deposit bond?
A deposit bond is essentially an insurance policy, the bond is a policy document that tells the vendor that the insurance company will pay the 10% of default of the contract.
Come settlement the deposit bond, the purchase price is paid in full and the bond simply lapses.
What is the difference between a Solicitor and/or Conveyancer?
Whether you hire a conveyancer or solicitor, it is critical to hire them at the outset of your transaction.
The advantage of hiring a solicitor is a greater level of knowledge in various areas of law, meaning that any legal issues that potentially arise can be quickly dealt with.
A solicitor generally able to provide a more focused client-based approach to the transaction.
Should I use a local Conveyancer / Solicitor?
You do not need to use a local conveyancer and/or solicitor, they must however, be registered within NSW.
At Catron Simmons Lawyers we can operate wholly electronically so there is no need to come into the office. Alternatively if you prefer however, we do of course accept in house appointments at no extra charge.
Frequently used terms in Property
Caveat – A notice on the title proclaiming an ‘interest’ over the property (other than the owner)
Certificate of Title – A document that shows the ownership and interest in the land/property under the Torrens System of title. Easement – Right to use the land of another or a right to prevent the owner from using the land in a particular way. Common easements are drainage and electricity.
Lien – A charge, security or encumbrance on a property for the payment of debt.
Reserve Price – The lowest acceptable price fixed by the vendor.
Vendor – The person/unity selling the property.
Zoning – a local planning tool, controlling the current and future prospects of the land.
We are a experienced boutique firm with a client driven focus. Located in the Hills District at Bella Vista servicing Sydney Wide. Catron Simmons Lawyers offer you the knowledge, confidence and the straightforward advice you require.
Alternatively, you can give us a call on 0407 171 626 (Alicia) or 0407 534 594 (Michelle)
We are open Monday to Friday from 9am-5pm but contactable 24/7.
Whether Buying or selling a property it can be some of the biggest decisions and investments in your lives, so you want to make sure it is done correctly.