Going to contract

When you are ready to write up a contract, the next step is to decide on the price you wish to offer the seller and under what conditions you wish to make the offer. Common conditions of sale are: subject to finance, a builder's report, timber pest inspection or the sale of another property.  Remembering a final inspection is available once, all conditions have been met and being prior to settlement.

The seller can accept your offer, reject it or counter offer it. Counter offering usually occurs when the seller is not satisfied with the price offered and/or conditions included and subsequently alters them. The contract will be brought back to you for your consideration. If you accept, you initial the seller’s alteration and the property is under offer to you subject to any conditions that the contract may contain. Your sales consultant will continue negotiations between you and the seller until you are both in agreement. It is important to note that any ammendments to an offer are a risk to either party, that the other party may not agree to the chnages and may 'walk' from the contract. If need be, seek clarity from your selling agent.

Common conditions of sale

Along with the standard terms of the contract both buyers and sellers are able to insert further terms and conditions of sale. When writing in any special condition the key parts are who is going to do it; who is going to pay for it; what are they going to do; when are they going to do it by; what standards will apply; what happens if it is not satisfied and who can waive it.

Once an inserted condition has been satisfied notice will be provided to the other party usually by the solicitors or settlement agent involved.

A condition can be either satisfied or waived. If you have inserted a condition but it has not been met by the required date you can choose to waive that condition. If the condition is neither satisfied nor waived or varied, then the agreement will be terminated and any deposit paid by you shall be immediately refunded without penalties. If a condition has not been met by the scheduled date, your sales agent can draw up a variation to contract extending the end date by which that condition needs to be met. All parties to the contract need to sign off on any variation to the contract offer.

• Some common conditions of sale are:
• Conditional on sale of purchaser’s property. Note that if a subject to sale condition is written into an offer, your sales agent should explain the use of a 48 hour clause.
• Conditional on sale of purchaser’s property becoming unconditional
• Use the appropriate clause to allow you time to sell your property or for an existing contract of sale to become unconditional in all respects.
• Conditional upon Finance
• Conditional upon obtaining a Builder’s Report or a Timber Pest Inspection.

Each of these conditions should be clearly worded and the dates for confirmation made clear.

Paying the deposit

Once all parties have signed the contract you will be required to pay a deposit within a nominated period of time as per the offer. This time is often 7 days but is negotiable. A deposit of approximately10% of the purchase price demonstrates to the seller your commitment to the purchase. The deposit is not a fixed amount. Buyers should be made aware of large deposits of over $20,000 and for extended periods of time, that they have the option to have their deposit paid into an  interest bearing trust account.

Property purchase costs

Financial fees vary greatly, depending on such matters as what percentage of the property value that you will be borrowing, the amount of the loan, the amount of the purchase and which bank you are borrowing funds from. If you speak to your local Bank or  Mortgage Broker you can quickly ascertain approximate costs for your particular circumstances.

Possible expenses you may incur are:

• Bank fees which may include:
• Lender application fees, valuation fees, legal and settlement fees
• Lender monthly account keeping fees (if applicable)
• Lender “Professional Package” annual fees (if applicable)
• Lender’s Mortgage Insurance (if applicable)
• Lender retention account fees (if applicable)
• Title transfer, Mortgage registration fees
• Registration of mortgage discharge (refunded by seller at settlement)
• Solicitor/Settlement agent charges may include legal searches (please consult your solicitor or settlement agent)
• Stamp Duty on Purchase
• Home protection insurance
• Miscellaneous costs (Building / pest inspections, rates, removalists, etc.)

Completing the purchase

Before settlement your solicitor/settlement agent will undertake the necessary searches with respect to the property and your financier will prepare the mortgage documentation.

On settlement your solicitor/settlement agent will exchange with the seller's solicitor/settlement agent:

• Monies
• Transfer documentation
• Keys to the property ( Keys to the property are usually held and handed over after settlement by the listing agent)
• Within a few days of settlement your solicitor or financier will register the necessary documentation and mortgage transfer with the Land Titles Registry.
• Possession of the property usually takes place on the settlement day although the seller and buyer can agree for these dates to be different.

Throughout the buying process and beyond, our team will be with you every step of the way. If you would like to discuss the buying process, email our office today and we will get in touch to discuss it.