Once you have decided on the house you want to purchase, you will need to appoint a conveyancer to handle all the legal work for you.
It is best to appoint a conveyancer before you sign a contract to purchase a property, but sometimes you end up finding the right property, and signing up, before getting a chance to appoint your conveyancer.
If this happens to you, make the conveyancer your next stop before anything else, preferably the same day.
Signing the contract is known as “Exchanging Contracts” and basically means that the deal is done, subject to any conditions that have been included in the contract.
These conditions can typically include things such as:
- Subject to a satisfactory Pest Inspection
- Subject to a satisfactory Building Inspection
- Subject to suitable finance being arranged
These are conditions that YOU, the buyer, should put in the contract, and they provide you with an opt-out should the property have problems, or should the buyer be unable to finalise ‘suitable’ finance on that property.
Settlement, or Completion, is the final phase of buying the property, and is the date that the seller of the property receives full payment from your financiers and the property becomes yours.
Other than the actual cost of the house itself, the next most expensive part of the transaction will be the Stamp Duty. This is a State based tax and can be very, VERY, different in each State.
An example of the differences may be something like these:
Stamp duty rates for a personal residence property, not being a First Home. (Discounts/Exemptions are available for First Home Buyers)
|Stamp Duty per Property Value|
The above figures were correct as at June 2009, but are subject to change, and as such should not be relied upon, but used as a guide only. Accurate figures can be obtained from each States website, or your conveyancer.
Legal Liability for Insurance when buying a House
As soon as you sign a contract to purchase a property, even before you complete the purchase, it is essential to take out building insurance in your name.
I still don’t know exactly why, but even if the property was to burn down the day before you complete, it would appear that you are still obligated to complete the purchase, hence, your Insurance will be needed.
Deciding not to buy after signing the initial contract ?
In most states there is a “cooling-off period” where you are allowed to opt out of the purchase, but a financial penalty may apply. Western Australia however does not have this provision (as at July 2009).
In Western Australia, once you have signed the contract, you can only opt out of the purchase if one of the conditions that you have agreed in the contract is not met.
In other States you are normally allowed a 5 day cooling off period, in whihc you can change your mind. However, you will pay a penalty of between 0.5% and 2.5% of the property purchase price.
Check with your property conveyancer/solicitor on this point, BEFORE signing the initial contract.
Information Links for buying property in Australia
- Buying a house in Queensland QLD Real Estate