When purchasing property, we recommend that you engage a Solicitor as early as possible to take you through the essential steps that are involved in purchasing property including:
- Obtaining Finance
- Undertaking pre-purchase inspections
- Reviewing the Contract for Sale with your solicitor
- Paying the deposit; and
- Obtaining Finance
Organising finance is the first step you will take to purchasing property. It is important to speak to your mortgage broker or bank to discuss your financial situation and understand the costs involved with purchasing property. Your bank will then issue you ‘pre-approval’ which is the amount you are approved to borrow for purchasing a property. Once you have found a property and had your offer accepted, we will liaise with your mortgage broker or bank to ensure you have received unconditional loan approval. Unconditional approval is the banks final decision to loan you the money for the specific property you are purchasing. You should not exchange contracts for a property unless you have received unconditional loan approval, or you have a suitable finance or cooling off period.
2. Undertaking pre-purchase inspections
In addition to inspecting a property yourself, it is recommended you engage a licenced professional to undertake a pre-purchase inspection and provide a report, which can include a pest and building report, and strata report. When you purchase property, you are buying it ‘as is’ subject to any defects, inside or outside the property, and within the roof, walls and underfloor space. These reports will help you to identify any defects with the property and understand if they will affect the price of the property as well as its condition over time.
3. Review the Contract for Sale
At Baker Love Lawyers, we can conduct a pre-purchase review of the Contract as soon as you find the property you want to buy. Receiving advice on the Contract is important and is essential in protecting yourself and your legal rights. Common things we look for during a Contract review include any special conditions that are unfair to you, default clauses, the settlement date and whether you and your bank can meet with this timeline, we ensure the contract includes the correct particulars of sale like your full legal names and the purchase price and whether the vendor carried out any works requiring approvals or insurance. We can also negotiate any required terms including if you require a longer settlement period, or if you wish to take early occupation of the property, or if you are selling and purchasing at the same time and you need settlement to occur simultaneously.
4. Paying the deposit
When you are at the point of exchange, you will need to pay the deposit, which is usually 10% of the purchase price. We can negotiate a lesser deposit of 5% or a 10% deposit bond.
5. Attending to exchange including provision for a cooling off period if required
Exchange of contracts can occur two ways, with or without a cooling off period. If you wish to exchange contracts, but you have not yet received your unconditional loan approval, or carried out the pre-purchase inspection reports, we can exchange contracts with a cooling off period. This means you have five (5) business days post exchange to receive your unconditional loan approval and satisfactory pre-purchase reports. If for any reason you withdraw from the contract during the cooling off period, you must pay the vendor 0.25% of the purchase price, which works out to be $250 for every $100,000.
You can otherwise exchange by waiving the cooling off period, which we only recommend once you have undertaken the essential steps.
Different rules apply if you are purchasing at auction and we recommend you receive advice prior to the auction.
Conveyancing is a complicated process which is made easy by engaging the professionals at Baker Love Lawyers, please contact us today.