Buying a property is one 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 the 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 a Property - Stages of purchase
Buying your future home is an important and dauting experience, but it doesn’t need to be with the assistance of Catron Simmons Lawyers.
We charge fixed fees for most conveyancing matters, depending on their complexity.
Pre-Approval (Before you start looking)
You will likely need to obtain a pre-approval loan from the banks to finance the purchase.
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.
Potential Property
Once you have found a property, it is always advisable to obtain a pre-purchase inspection. The most common reports are the building and pest inspection 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.
Offer & Acceptance
If you are satisfied with everything above, an offer is made for the property. If that offer is accepted, the purchaser will likely be asked to pay an initial deposit. It is important to remember this does not “secure” the property for you.
The Contract / Exchange
You need to bring the contract in and speak with one of our Solicitors to discuss the matter. You need to be absolutely clear on your rights and obligations before signing as this will likely be one of the biggest decisions of your life.
When the contract is signed the purchaser will often need to pay 10% deposit at this time unless negotiated otherwise. This money is paid to the real estate agent and held until settlement.
If you have purchased the property under Auction conditions, it is important to understand that there is likely to be no ‘cooling off’ condition.
If you have purchased the property under a private treaty conditions, there is typically unless negotiated a five-day cooling off period.
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
- Liaising with the financial institutions
- Checks with Government organisations such as Sydney Water, RMS etc to ensure they don’t have a caveat or interest in the land
The solicitor will also be required to attend the settlement conference involving the banks, real estate agents and other party’s solicitors. This is where the title for the property and keys will be handed over in exchange for the monies.
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.
Solicitors are typically more expensive, however, if there is an issue that arises while using a conveyancer often you are required to pay double the amount as you are then forced to hire a solicitor.
A solicitor generally able to provide a more focused client-based approach to the transaction.
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.
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.
What is the 'cooling off' period?
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 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 propoerty.
Under the Act, a s66W certificate must set out the following:
- the name of the legal practitioner (solicitor or barrister) 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 stamp or transfer duty?
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.
Transfer Duty Calculations from 1 July 2020:
| Property value |
Transfer duty rate |
| $0 to $14,000 |
$1.25 for every $100 (the minimum is $10) |
| $14,000 to $31,000 |
$175 plus $1.50 for every $100 over $14,000 |
| $31,000 to $83,000 |
$430 plus $1.75 for every $100 over $31,000 |
| $83,000 to $310,000 |
$1,340 plus $3.50 for every $100 over $83,000 |
| $310,000 to $1,033,000 |
$9,285 plus $4.50 for every $100 over $310,000 |
| Over $1,033,000 |
$41,820 plus $5.50 for every $100 over $1,033,000 |
Transfer Duty Calculator
Possible Concessions or exemptions from Stamp Duty:
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’s 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.
More information on tenants in Common and Joint tenants.
What is the First Home Buyer Scheme?
As a first home buyer, you may be eligible for a transfer duty concession or exemption.
- If your home is valued at less than $650,000, you can apply for a full exemption so that you don’t have to pay transfer duty.
- If the value of your home is between $650,000 and $800,000, you can apply for a concessional rate of transfer duty. The amount you’ll have to pay will be based on the value of your home.
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.
More information on Deposit Bonds.
What is a Strata Scheme?
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.
More information on Strata schemes.
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.