Buying Real Estate
In simple terms, Ray’s role when you’re buying real estate or any property transaction is to ensure that you are able to complete your transaction with a minimum of stress and within the time frame stated in the contract.
What you need to know before going out and looking at properties for sale
If you are thinking about buying real estate or any property transactions then it is worthwhile contacting Ray, either with our easy Contact Us form by email or speaking to Ray before you commence looking for a property so you may be informed of the following:
- NSW Government and Federal Government current benefits for property buyers that relate to grants, stamp duty exemptions, stamp duty concessions, senior’s exemptions and investment property grants.
- GST and land tax issues. As a general rule, there should not be any GST included in the sale price of a “second hand” residential property. However, in the price for a building lot in a new subdivision or a vacant small shop or a farm, the price could include GST which should be investigated for relevance to the buyer.
- It may be possible for some of these properties to exclude GST if the right steps are taken by the buyer when negotiating a price with the seller. Likewise, land tax should be considered when purchasing an investment, commercial, industrial or non-productive rural properties.
- The hidden costs associated with buying real estate include the loan application fees, the different types of reports that buyers should consider having carried out on a property include pest reports, builder report and other types of pre purchase reports include the application to the local council for a Building Certificate so that the buyer may have council check the property to ensure that the residence, garage, carport, swimming pool and other improvements on the property meet the council’s approval.
- A council might insist on the buyer providing a surveyor’s identification report when lodging the application for the Building Certificate.
- “Cooling off rights” for buyers of land and what happens to those rights at public auctions.
- Loan pre approvals from banks and other lenders. It is important that Ray explains the terms of a buyer’s unconditional loan approval.
- Deposit bonds, rather than cash for a deposit is applying to property sales more frequently. A buyer may need to obtain a bond for the deposit and Ray is able to explain how a bond assists the buyer. It is important for a buyer to know whether or not the buyer is able to obtain a bond and at what price.
- Legal fees: Ray will provide a written costs agreement for the buyer.
What The Buyer Should Do When A Property Has Been Found
When buying real estate and you have found the property that you wish to purchase, then you the buyer make an offer to the real estate agent. The real estate agent has an obligation to pass onto the seller all reasonable offers. If the offer is acceptable to the seller of the property, Ray is able to discus with the seller’s solicitor the special conditions to be inserted in the contract which meets the buyer’s needs.
It is at this stage that the buyer needs to be in close and regular contact with the lender! The lender needs to approve the property as a suitable security for the loan. The lender might arrange an inspection of the property by its valuer to determine a value for the property.
When buying real estate you may find your lender may only be prepared to lend to the buyer an amount equal to 90% (or other percentage) of the value of the property as determined by its valuer.
The Real Estate Institute of New South Wales and the Law Society of New South Wales have worked together for many years to ensure that there are regular reviews and updates to the contract for sale of land.
This contract contains pre printed conditions designed to be fair to the buyer and the seller. It has standard provisions such as 42 days for completion of the sale transaction and the requirement that the buyer pay 10% of the price as the deposit, which is held by the real estate agent.
Ray is able to explain these standard conditions and any special
The Exchange Of Contracts
Ray’s role is to ensure that the contract signed by the seller and the copy contract signed by the buyer contain identical terms and conditions. In addition, it is important that any disclosure documents attached to the contract are also identical, such as title searches, plans of subdivision, terms of any covenants on the title, terms of any easements affecting the property, sewer mains plan and the council “zoning” certificate issued under section 149 (2) of the relevant Act
The exchange of contracts takes place when Ray and the seller’s solicitor date and then swap contracts. After the exchange has taken place, the seller’s solicitor will retain the contract signed by the buyer and Ray will then retain the contract by the seller. This is when there is a binding deal. A buyer must be aware that the deposit must be paid on or before the exchange of contracts. Ray will guide a buyer as to how the payment of the deposit should take place. Deposit bonds may usually be available to a buyer within two days of lodging the application. If the deposit is paid by way of cheque, then the real estate agent holds the deposit in the agent’s trust account as the ‘stakeholder’ for the seller and the buyer.
The real estate agent may not release the deposit to anyone without the written authority of the seller’s and buyer’s solicitors which is given when the sale is completed. If the buyer fails to complete the purchase within the time allowed in the contract, then Ray is able to advise that buyer of their legal rights.