This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
No matter if you are a first-time buyer or an experienced property investor, purchasing property is without doubt one of the biggest things you will do in life. Establishing a reliable, specialised network of professionals will be extremely beneficial to you as a purchaser.
Such professionals to include in your network are:
- Licensed Conveyancer
- Real Estate Agent or Buyer’s Agent
- Pest & Building Inspectors
- Mortgage Broker
- Now you are prepared to begin searching for your ideal property.
Step 1: Pre-purchase Due Diligence
Once you have identified a property that meets your criteria and before an offer is submitted to the vendor’s agent, it is extremely important that the appropriate due diligence is carried out. Ask your conveyancer to review the Contract of Sale (Bliss Conveyancing will review any contract at no charge). Reviewing the Contract of Sale allows changes to be made to clauses within the contract — for example, the deposit amount, the settlement period, or negotiating with the vendor’s conveyancer to have clauses added or removed.
It is a significant advantage to have unconditional loan approval from your financial lender. This shows that you have met the lender’s criteria and confirms the amount they are prepared to lend you.
A pest inspection report will identify any previous pest activity that occurred within the property. A building report will highlight any structural issues the property may have or may arise in the near future. At Bliss Conveyancing, we encourage all our clients to ensure that the plumbing and electrical systems are also inspected, as these areas are generally not included in standard building reports.
If you are considering a strata property, a strata report should also be obtained. This will outline the owners corporation’s financial and operational matters, including quarterly levies, any special levies (if applicable), minutes from previous meetings, and ongoing maintenance activity.
Step 2: Exchange of Contracts, Stamp Duty & the Cooling-Off Period
If the vendor accepts your offer, contracts will be signed and the deposit will be required (generally 10% of the purchase price). Bank cheques, electronic transfers, or deposit bonds are common methods used to pay the deposit. After this, contracts will be exchanged and the cooling-off period begins.
In NSW, a cooling-off period of five business days typically applies. During this time, you can withdraw your offer and opt out of the transaction. However, you must pay the vendor 0.25% of the purchase price (or $250 for every $100,000).
Be aware that some contracts may include a Section 66W Certificate. Once signed by your conveyancer, this waives the cooling-off period. There is also no cooling-off period if a residential property is purchased at auction. This is why you need knowledgeable professionals in your corner — your conveyancer will inform you and review any Contracts of Sale thoroughly.
Stamp Duty is also payable and must be paid before settlement or within three months of the exchange of contracts, whichever occurs first. Your conveyancer will ensure this happens. You can estimate your liability using the Revenue NSW Stamp Duty Calculator.
Step 3: Settlement
This is the conclusion of the purchasing process, where the title of the property is officially transferred to the new owner and the keys are handed over. The outstanding balance on the purchase price is also paid at this time. You are not required to attend settlement — your conveyancer will represent you, along with the vendor’s conveyancer and any discharging or incoming mortgagees.
An exciting development in recent years is the shift to electronic settlements, which became mandatory for all conveyancing matters from 1 July 2019.
Contact us today for a no-obligation complimentary initial consultation.
