Property Passion - Buying and Selling Property

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Buying Property
Before making an offer
So you’ve found the perfect property and want to make an offer –what do you do next? First, we suggest that you take the Contract and all other documentation provided to your solicitor and ask him/her to look through them and give their opinion. This is an extremely important part of the purchasing process, since it may be the case that the Contract contains certain "Special Conditions" that prevent you from pulling out down the track if you are not satisfied with the results of your enquiries and searches. For example, many Contracts contain "Answers to Requisitions" which are full and final and mean that you are not permitted to make any further enquires regarding the property – and if, for instance, it turns out that your measurements of the property measurements are far greater than those specified in the Title, you many have major problems on your hands – and may still be forced to proceed with the contract!
So don’t take the risk – the small sum charged by your solicitor to look over the Contract is worth every penny! Never ever sign a contract that contains Special Conditions by the Vendor (ie the Seller) without first getting proper legal advice.

Making an offer
It is advisable to put all offers in writing to show you’re serious about buying – and also to ensure that the offer is passed on - it’s not written down in black and white there’s a real chance it may not be forwarded, especially by some of the less scrupulous agents! To make an offer, complete the standard form for your State or Territory – in Victoria it’s called a “Contract Note” whereas in Queensland it’s a “Contract for Houses and land” which must be accompanied by a PAMD Form 30c. You must remember to sign and date the offer.

Point to consider when making the offer
	Ensure that you add any Special Conditions that may be relevant – consult your solicitor to ensure that you get the wording right.
It’s also recommended that the offer you make is only open for a specified time, so make sure the written offer states this – including the precise hour eg midnight or 5pm. When making an offer, it is commonplace to provide a deposit. At this stage, a small token amount is acceptable, say, $100 or a similar amount. If your offer is accepted then it is customary to then pay a 10% deposit, although this is very negotiable and many property investors refuse point blank to put up that amount of money. In this regard, be careful what the written offer says – never commit to put up a larger deposit at a specified future date than you are either able to, or prepared to, make. If your offer is subject to certain provisions or Special Conditions, eg finance being accepted or a satisfactory pest or building inspection, then it is usual to hold out from paying the balance of the deposit until such provisions are satisfied and the Contract goes “unconditional” – this means that the deadline to pull out that has been specified in the Contract due to unsatisfactory inspections or lack of finance approval has passed.

Presenting your offer to the Vendor
Once your offer has been put to paper, the agent is legally obliged to present your offer to the Vendor for consideration at ANY time up until the Contract of Sale is actually signed – and if any agent tries to persuade you otherwise, we recommend you politely remind them of this fact!! Your offer may either be accepted, rejected outright or the Vendor may ask for extra money or additional terms. If it is accepted, the Vendor will sign and date the Contract and, assuming you have already signed and dated it, the Contract will become valid from the date that the Vendor has signed. Otherwise, it is open to you to reconsider and make another offer – termed a “Counter Offer” – if you think fit.

Cooling off period
In every State and Territory a cooling off period exists to protect the buyer in the event of a “change of mind” – irrespective of the reason. The cooling off period differs between States and Territories, but is usually between 3 and 5 days – and may differ between auctions and private sales. But beware! A penalty usually applies for exercising one’s rights under the cooling off period, so never rely on this “get out clause” if you aren’t sure whether or not to make an offer.

Checking everything out
Once your offer goes “unconditional” it’s full steam ahead to getting everything checked out as soon as possible. Your solicitor or conveyancer should carry out the necessary title searches and apply for the necessary certificates to check that everything is in order – and gather the necessary information to put together the “Settlement Statement” and “Statement of Adjustments”. If in the unfortunate event that major problems are uncovered that were not disclosed prior to purchase, then the Purchaser may be in some cases be entitled to cancel or “rescind” the Contract. This is a complicated issue and should be discussed in detail with your Conveyancer/Solicitor – but it may be the case that you still want to proceed with the purchase and in such a situation, both parties should work together to achieve an amicable agreement that is acceptable to all parties.

Settlement
Settlement in Australia is usually a manual transaction – the swapping of title, mortgage discharge documents and suchlike in return for bank cheques. If you’re taking out a mortgage to buy the property then your bank or financial institution will need to attend the settlement to satisfy itself that the paperwork is in order before handing over the cheques – and taking the title for its safekeeping – hence the expression “I don’t own my house, the bank does!” At settlement, all documents from the opposite party are carefully scrutinised and if there is even a small error, settlement can be delayed.

After Settlement (a) State Revenue Office:
Once settlement has taken place, the person with the Title – either the bank or the unencumbered purchaser (depending on whether the property has been bought on finance or not) takes the Title and Mortgage Discharge document (if relevant) to the State Revenue Office to pay the required duty and get the Transfer document stamped to reflect that this duty has been paid. The higher the purchase price, the greater the amount of duty will be owed. Duties differ considerably between States and Territories and are subject to regular change. Consult the relevant website below to ascertain the duty payable for your property:
	ACT - www.revenue.act.gov.au NSW - www.osr.nsw.gov.au NT - www.nt.gov.au/ntt/revenue Qld - www.osr.qld.gov.au SA - www.revenuesa.sa.gov.au Tas - www.treasury.tas.gov.au Vic - www.sro.vic.gov.au WA - www.dft.wa.gov.au
(b) Land Titles Office:
Next the Land Titles Office will, upon payment of the necessary fees and provision of the necessary completed legal forms, discharge the old mortgage (if relevant), register the new mortgage (again, if relevant) and transfer the Title in the names of the new Purchasers. If the property has been bought using finance then the financier’s details will also be recorded on the new Title. In most States a paper copy of the Title is automatically given to the Purchaser (or the financier if the property is financed). However, in Queensland a paper title is no longer automatically despatched – a fee is charged if a paper record of the title is required. The Title is then held by the bank or finance company until the mortgage has been finally paid off – or if there is no finance, the Title is held by the unencumbered Purchaser and should be kept in a safe place, preferably a fireproof cabinet away from the house itself. Below are links to the Land Titles Office for each State and Territory
		Vic – www.land.vic.gov.au NSW - www.lands.nsw.gov.au NT - www.rgo.act.gov.au Qld - www.abio.org.au SA - www.landservices.sa.gov.au WA - www.dli.wa.gov.au ACT - www.rgo.act.gov.au Tas - www.dpiw.tas.gov.au

Notifying the relevant Authorities
Once settlement has occurred, the relevant rates departments need to be notified of the new owner and any “adjustment cheques” for outstanding amounts should be forwarded to the relevant departments, along with the official form. In Victoria this is named the “Notice of Acquisition” or the “Notice of Disposition” depending on whether it is the buying or selling party that is forwarding it. It is up to you to notify all other authorities or organisations, and to arrange for meters to be read and for bills to be transferred into your name. See our Checklist for Moving House…… Don’t forget to book the removalists early and to arrange for the locks to either be changed or decoded on moving in day.

Celebrate!
Once you’ve done all this, the only thing left is to put your feet up and celebrate with friends and relatives – and pop that cork! Congratulations – you’ve done it!