Buying or selling residential property will be one of the most important financial transactions you make. To be confident in your decision, contact us now to take advantage of our FREE pre-signing Contract advice now.
When you have expressed an interest in purchasing a property, the real estate agent will prepare a standard Contract for your to sign. It is important that you always seek legal advice before you sign the Contract to ensure that your rights are protected and that it meets your needs.
If required, we can draft special conditions to be added to the Contract. An example of this includes:
- The purchase of the property depends on the sale of your existing property; or
- The seller must ensure that the property is professionally cleaned before settlement.
It is also recommended that you obtain an independent valuation of the property. If obtaining finance for the purchase of your property, speak to your financial institution before your sign the Contract. If defects and liabilities are not disclosed in the Contract, you may be able to cancel the agreements and recover any deposit paid.
Paying the Deposit
Once the contract becomes binding, you will need to pay the deposit. Follow the conditions set out in the contract—normally, you’ll need to pay within 2–3 days. You might be asked to pay a partial deposit when you make the offer. This does not guarantee the property will be yours. The seller can still choose to reject your offer. If they do, you will get your deposit back.
In most cases, you will become responsible for the property from 5pm the next business day after the contract date. You must decide for yourself whether to take out home insurance, however, not having home insurance is very risky. Home insurance will cover you for loss or damages to the building and its fixtures. You should also consider taking out content’s insurance.
Cooling Off Period
All residential property sales in Queensland are covered by a statutory cooling off period. The cooling off period runs for five business days commencing on the date the buyer or their lawyer receiving a copy of the Contract signed by all parties. If the buyers decide not to proceed with the purchase, they may terminate the Contract by giving the seller notice in writing within the specified time frames. The buyer would then need to pay the seller a termination penalty of 0.25% of the purchase price.
If the Contract is subject to finance, provide your financial institution with a copy of the Contract as soon as possible. This will help your mortgage broker/banker arrange for finance approval within the relevant time frames under the Contract.
Building and Pest Inspections
Most Contracts are subject to a building and pest inspection. It is strongly recommended that you contact a qualified building and pest inspector to view the property. These inspections will identify any issues with the property.
As part of the conveyancing process, we carry out a number of standard searches. These searches include:
- Title search;
- Plan search;
- Council Rates search;
- Land Tax Certificate;
- Queensland Transport search;
- QCAT Neighbourhood disputes search;
- Body Corporate Information Certificate (if buying a unit or townhouse);
- Company search (if either party on the Contract is a company);
- Bankruptcy search;
- Court Register search;
- Townsville City Council Heritage search;
- PPSR searches; and
- Check title search.
There is a whole suite of additional searches that we may undertake on the property. Please note that searches should be carried either before or upon signing of the Contract. Please contact us as soon as possible to discuss your needs.
Pool Safety Certificate
If you are buying a property and there is no pool safety certificate in place for a pool on the property at settlement, you must obtain one with 90 days.
You can obtain more information from the Department of Housing and Public Works website.
Under the Contract of Sale the seller must disclose whether a compliant smoke alarm is installed in the property. If a complaint smoke alarm is not installed the seller must ensure that one is installed prior to settlement at their own cost. Please note that a seller cannot contract out of their obligation to have a smoke alarm installed.
If the seller has disclosed that a compliant smoke alarm has not been installed and you proceed to settle the Contract you will then be liable to ensure that a compliant smoke alarm is installed. In the event that a smoke alarm is not installed you risk being fined up to $375.00.
Please visit the Queensland Fire and Rescue website for more information
Electrical Safety Switch
If an approved electrical safety switch for general purpose socket outlets has not been installed in the property under the Electricity Regulations you are required to have one installed within 3 months following settlement. Failure to do so could result in a $1,500 penalty.
Stamp duty is a state tax which is payable on dutiable transactions in Queensland. Stamp duty is calculated on the dutiable value of the property which is generally the higher of either the consideration payable under the Contract and the unencumbered market value of the property.
As stamp duty is applicable to each transaction, you must ensure that the buyer named in the contract is the person or entity that you intend to own the property. Otherwise you risk 2 or more assessments of stamp duty, which can increase the stamp duty payable.
If you are seeking to purchase property for your Self-Managed Super Fund and are planning to buy the property using a bare trustee as buyer with a loan, then you run the risk of having to pay transfer duty again when the property is transferred to your SMSF on repayment of the loan.
You also need to carefully consider your current and ongoing eligibility for any concession or exemption that you obtain. If you do not fulfil obligations regarding the payment of duty or advising the Office of State Revenue of changes to your eligibility for concessions or exemptions, then they may identify this and can seek to recover any shortfall directly from you including penalties and interest. Recovery of incorrect or unpaid duty may occur years after settlement and could compound into substantial amounts. Visit the Office of State Revenue‘s website for further information.
You are entitled to enter the property once for the purpose of conducting a pre-settlement inspection. We suggest you make arrangements with the seller’s agent to arrange to inspect the property closer to the time of settlement and, amongst other things, check that no fixtures have been removed or not anticipated issues with the seller providing vacant possession.
You should let us know if the seller has made any changes to the property, as this may entitle you to terminate the contract or claim compensation from the seller. Inspections are important even if you are purchasing vacant land, to ensure that the seller or other parties have not completed any earthworks or construction on the property since the contract was entered into.
Once your finance has been approved and you are satisfied with your building and pest inspections, the Contract will go unconditional (meaning that its no longer subject to any conditions).
We will then proceed to make arrangements for settlement including contacting your financier to book in a time forward to your financier to draw the relevant cheques required (please note: you may be required to provide balance funds for settlement).
Settlement is the final stage in the conveyancing transaction. The parties’ solicitors and lenders will attend settlement to check and exchange documents and cheques. We attend settlement on your behalf (there is no requirement for you to attend). When everyone at settlement is satisfied with the exchange, the matter is declared “settled”.
Once settlement has been effected, we will contact you as well as send a facsimile to the agent requesting the keys be released to you.
After settlement has been effected we will contact any relevant authorities to advise of the change of ownership. Your financier will attend to lodgement of all relevant documents to complete the title transfer process. If there is no financier involved, we attend to lodgement of all documents necessary to complete the transfer.
Lastly, we will send you our final letter containing our tax invoice, office receipt, settlement statement and copies of all the searches.
We strongly recommend you seek legal and financial advice before buying a property at auction. Please note: There is no cooling off period for buying at auction.
If you are the successful bidder at the auction, you will have to settle the contract even if:
- the house doesn’t pass inspections;
- you change your mind;
- you can’t afford it/obtain finance.
The terms of sale usually require you to bid on an unconditional basis. This means you cannot have any conditions, such as:
- subject to finance
- subject to the completion of another sale.
For further information, visit our other pages for buyers:
Monday - Thursday / 8.30am to 5.00pm
Friday / 8.30am to 4.00pm