Buying a Property

Once you have found the property you want to buy there are a number of processes and steps that need to be completed before you cancel the property yours.

Firstly, you should consult with a conveyancer or conveyancing lawyer who can outline all the processes that you need to complete before buying a property. Conveyancing lawyers will assess all restrictions or encumbrances on a property, develop contracts and ensure conditions are met and arrange payments and fees.

You should speak to a conveyancing lawyer as soon as possible, even before you look at any properties and especially before any paperwork is signed. Discuss your financial situation, time restraints and any preferences for the property.

Overall a conveyancing lawyer will make you aware of all conditions and requirements of buying property and explain the necessary issues such as cooling off periods.

Contracts

Conveyancing lawyers will be necessary when it comes to handling the contracts required when buying a property. Contracts when buying a property will involved all details in regards to the legal and financial issues of the transaction and are set once both seller and buyer have both agreed on a price with the conditions of the sale the contracts agreed and exchanged between the parties.

The contract can be exchanged in one of two ways, either by an estate agent or by the conveyancing lawyer. Before this exchange of contracts either party can withdraw from the transaction, after the exchange however, both parties have to complete the transaction.

The cooling off period is five days for a residential property is five working days. If a property is sold at auction then there is no cooling off period.

Before signing any contracts you should have a licenced professional inspect the property to ensure that it is structurally sound and free of any pests. It should be noted that contracts generally do not cover building quality but more the title. During a building inspection the property will be examined for any structural issues that may not be obvious or purely superficial.

First Home Buyers

First home buyers have special considerations available to them with some grants and discounts available. These include First Home Buyers Grant and Stamp Duty Concessions.

First Home Buyers Government Grant

The First Home Buyers grant is a Federal Government scheme that is available to all first home buyers where the purchaser is either a single or a couple with at least one purchaser an Australian permanent resident and the property in question will be used as the purchasers residence, not investment.
Design to encourage and benefit first home buyers in Australia, the First Home Buyers grant has had an extension of the First Home Owner's Boost (FHOB). This means that first home buyers that enter contracts between 1 July 2009 and 30 September 2009 will be eligible for $7,000 First Home Owner's Grant, with purchasers of new homes eligible for $21,000 of assistance, and purchasers of existing homes will continue to be eligible for $14,000 of assistance.

This will be halved from 1 October 2009 to 31 December 2009 with the FHOB grants at $3,500 for the purchase of established homes and $7,000 for the purchase of new homes.

These FHOB grants are in addition to the existing $7,000 grant under the First Home Owners Scheme.

Stamp Duty Concessions

When purchasing a property a first home buyer is eligible for stamp duty concessions. If the property is valued under $500,000 and will be your permanent residence then you will be eligible for the stamp duty to be waived on the contract for the purchase of the property. However, if the property value falls between $500,000 and $600,000 then the stamp duty will be discounted. However, if you are buying a property valued over $600,000 then full stamp duty is payable.

When buying vacant land with plans to build then concession are available up to $450,000.00.

Buying With an Existing Tenant

When buying a property that already has a tenant with an existing lease then you will have to take over as the role of vendor and landlord once the settlement has been completed as the existing lease between landlord and tenant still stands.

Of course several issues may arise from this situation. If the tenant agrees to stay in the property then the rent will need to be adjusted into your name from the previous landlord with any advance rent payments transferred into your account. However, the managing agent should be able to adjust any rent situations and transfer the names on the lease. Your conveyancer should be able to determine what and how adjustments are made.

However, if you need the tenant to vacate the property than you will have to send a notice of termination allowing them time to find new arrangements. This fixed term period may be as little as 14 days notice to end the tenancy with conditions applying.

Buying Off the Plan

When considering buying a property there is endless options when it comes to the type of real estate you are interested in ranging from apartments to houses to townhouses. Of course, one of the first choices that a property buyer must consider is whether to purchase an established property or to "buy off the plan".

Buying of the plan is the situation where strata units are advertised for sale before construction is completed with property buyers selecting from the plans of the complex and deciding on their property. Buying off the plan is popular for large apartment and townhouses developments and its has various pros and cons, although first time property buyers should learn as much as they can before committing to buying off the plan as there are several potential pitfalls that can be avoided.

Buying off the plan offers some great advantages and benefits, especially when it comes to avoiding a lot of the costs involved with buying a property with large tax savings, rental guarantees and delayed settlement payments. Essentially, buying off the plan means that you are securing a brand new future property at the current markets prices which can be a huge advantage with market prices rising. Additionally, payments that would normally be required in one hit when buying an established property but when buying off the plan a deposit of typically 10% will be required immediately with stamp duty due over the following three months. Stamp duty will also be far less than on an established property as investors can claim significant tax deductions for depreciation of the building and its fittings.

What's more the final payment will be due once the property has been completed which may be months away, leaving the buyer with more time to accumulate their funds.

Overall though, the main advantages of buying off the plan are the tax savings and time given to make any payments while also locking in a price for the property. Furthermore, as an owner while the property is being constructed, this means that you can have greater say over the interior design and colour scheme. Finally, it allows the buyer more time to sell any other properties that they may have.

Of course, on the over side of buying off the plan as a buyer you will be subject to interest rate rise and market fluctuations, contracts very rarely have penalties for late completion with unexpected problems with constructions and delay a very real risk. Also, the Housing Guarantee Fund does not apply to buying off the plan if the property is part of a multi-storey building.

Of course the biggest issue many investors have is the idea of not being able to see what they are buying. Typically there will be a display property and similar projects which may be more developed which can be inspected.

If you are considering buying off the plan it is important to research these various aspects and also ask a lot of questions of the estate agent in regards to any fees from the strata or body corporate, parking allowances or pets rules and about the history of the developer on the project.