Buying a property is one of the biggest financial decisions we ever make. Once you find the right property, what then? Below is an overview of the steps to be taken when buying a property in Queensland. Please note that this is Part One of Two for Property Acquisition in Queensland and part two of the Property Acquisition blog can be viewed at the end of this blog.
The steps to be taken when buying a property (property acquisition) in Queensland are usually as follows:
Engage a lawyer
You should engage a lawyer to handle the conveyancing on your behalf. Although it is possible to self-act, the process is complicated and a mistake can have terrible consequences. You should engage a law firm with specialist conveyancing lawyers. Buyers will often engage a lawyer following negotiation and signing of a contract for the purchase of a property, ideally before it is signed but this often does not happen. We strongly recommend that give a copy of the draft contract to your lawyer before signing so that they can discuss any issues that may need to be resolved before you sign the contract.
The seller and buyer negotiate and sign a contract for the sale of a property. As a buyer, when negotiating the terms of the contract, it is important that you consider:
- The purchase price.
- The deposit amount and time frame for payment – can you comply?
- The chattels to be included in the sale (ie, televisions, microwaves, refrigerators or pool equipment)?
- Are there any fixtures to be excluded from the sale – large light fittings, chandeliers?
- Are there any tenants in the property and if so, are you happy with the terms of the lease? Remember, if a tenant has a valid lease, you cannot force the tenant to vacate the property until the end date of the lease.
- Are there are any encumbrances such as easements registered over the property? If so, will this encumbrance restrict your use and enjoyment of the property?
- Do you need the contract to be subject to you obtaining satisfactory finance?
- Do you need the contract to be subject to you obtaining a satisfactory building and pest inspection report?
- Do you need the contract to be subject to a satisfactory pool safety inspection?
- Do you need the contract to be subject to any other conditions (ie, subject to you selling your existing property)?
- What is the settlement date (i.e., the date that you must pay the balance purchase price and in exchange for possession of the property). Is this a sufficient time frame for you and your financier?
Most contracts for the sale of residential land in Queensland are subject to a five business day cooling-off period (starting from the date that you or your lawyer receive a copy of the fully signed contract). However, there are a number of instances where a cooling-off period will not apply to a contract including if the property was purchased at auction.
Insure the property
Commonly, the risk for a property will pass to the buyer from the first business day after the day that the contract was signed by both parties (despite the buyer not owning the property yet). As such, it is important that the buyer arranges insurance for the property as soon as the contract is signed by both parties so that it is covered in the event of damage to the property during the contract period (ie, by flood or fire).
Pay the Deposit when required
As the buyer you will be in breach of the contract if you do not pay your deposit when required. This is something easily overlooked. As such, it is essential that you pay the initial deposit, which is often due on signing or shortly after, and the balance deposit (if any) in accordance with the time frames noted in the contract (even if the agent has suggested that you can pay the deposit at a later date).
Arrange your finance
If the contract is subject to finance, you will be responsible for making an application for finance approval. You should make this application as soon as possible once the contract has been signed so that there is sufficient time for you to obtain approval (or otherwise) from your bank or financier prior to the finance date. You may decide to engage a finance broker to assist you in this regard.
If your contract is not subject to finance, you must ensure that you have sufficient funds ready and available to complete the purchase on the due date.
Remember, sufficient funds to complete the purchase should include an amount required for transfer duty (previously known as stamp duty), any titles office registration fees and legal fees.
Arrange any inspections
If your contract is subject to a building and pest and/or a pool safety inspection, you will be responsible for arranging these inspections. We suggest arranging the inspections as soon as possible once the contract has been signed so that you obtain the results of your inspections well before the inspection date. This will give you enough time to make further enquiries if need be before you decide whether or not you are satisfied with your inspection reports.
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