It is has become common to enter into a contract to buy a new property before it has been built. In some cases, the time between entering the Contract and Settlement can be in excess of 2 years! Life and circumstance can change dramatically over that time so it’s important you understand the Contract and its effect on you now and in the future. To get advice before you enter into a Contract, contact our office and make a time for a no cost consultation with one of our team.
Commonly asked questions about established house purchases.
Can I buy the property in my Superannuation Fund & Borrow Money?
Yes. In 2007 the Superannuation Industry Supervision Act was amended to allow Self Managed Superannuation Funds (SMSF) to borrow money in order to acquire real estate. Of course there is a strict criteria which the SMSF must meet. //Adcocks is not a qualified Financial Advisor and cannot provide advice on the structure required, however, if you do not have a financial advisor we can refer you to one with vaste experience in this area. Contact us for more details. //Adcocks does not receive a fee or commission for it’s referrals.
Can I buy the property in my Superannuation Fund (& not borrow money)?
Yes. Provided you have sufficient cash in the fund to complete the purchase. You should first speak with your Accountant and Financial Advisor to ensure this is appropriate for your situation. As the property will go in the name of the Trustee for the Super fund, we will require a copy of the current Trust Deed.
Is the house a Community Titled Property? & what does this mean?
Community Titled properties can sometimes appear like a Torrens titled property; one that is only governed by the local council regulations. However, in many instances, particularly with courtyard homes they are Community Titled. This means that (depending on the amount of homes in the Community title) you as an owner will be bound by By Laws (rules) of the scheme.
If you have bought a Community Titled property, you have certain obligations at law and it’s important you understand them.
When do I have to take out insurance?
The day you sign the Contract! If something were to happen to the property before settlement (such as a fire) it would be your insurance that would need to cover the damage.
You should also consider taking out Title Insurance. Adcock’s can arrange cover for you through First Title , and we strongly advise all Purchasers take out the cover.
It’s a one off cost and covers you for the entire time you own the property for things such as fences not on the correct boundary or where someone has fraudulently obtained your title.
Every new purchaser should not be without this cover. We do not receive a fee or commission for endorsing this product.
For further information on title insurance or Contact us to discuss in more Detail
How do I know if all the renovations have been approved by council?
This is why it’s vital you have us check your documents before you sign; or at least as soon as you get them! Our Conveyancers are trained to examine the searches and Contracts for such things.
At Adcock’s we can also provide you title insurance through First Title. This insurance is designed to cover you for things such as unapproved pergolas, encroachments of boundaries etc.
Every new purchaser should not be without this cover. We do not receive a fee or commission for endorsing this product. For further information on title insurance or Contact us to discuss in more detail
Does purchasing an investment property affect my tax?
Any investment will inevitably have an affect on your tax situation and real estate is no different. Before proceeding with any sale or purchase, you should seek the advice of a qualified taxation expert. Things that should be considered include
//Q who is to bear the CGT (if any
//Q how is it to be financed
//Q should a family trust be used
At //Adcock we know stamp duty laws and we work with your Accountant or Financial Advisor to ensure these transactions can be supported by acceptable documentation and that you pay no more state tax than is necessary //Adcocks are not taxation experts or financial advisors; however we are more than willing to discuss with you or your accountant any issues you may have.
How do I know if there's any restrictions on the house I want to buy?
The Statuary Searches provide information to the Agent and your Conveyancer on the past dealing of the land and any current restrictions. If you are unsure of how to interpret these searches, Contact //Adcocks who will be able to advise on them. Remember, it’s critical you obtain your own, independent advice before your Cooling Off expires and you are bound by the Contract.
Should we hold our property as Joint Tenants of Tenants In Common?
This depends on your personal circumstance and why you bought in the first place. A surviving Joint Tenant, will upon the death of all the other Joint Tenants, become the sole owner of the property (even if their last Will says something different). Typically, couples who purchase a home to live in, choose to be Joint Tenants so that the survivor has a secure home. Joint Tenants must equally share the ownership. Ie half each or one third each with three owners. Tenants in Common usually are business partners. A Tenant in Common can leave their share in the property to anyone they include in their last Will. Tenants in Common can own different proportions of the property. Should you be unclear on what you wish to do or should you wish to discuss these terms further please contact //Adcocks.
What are the benefits of being a First Home Buyer?
Contact our office and we’ll help you assess if you qualify.
Is GST payable?
The Contract will stipulate whether there is a GST component included in the sale price. If you are not registered for GST (IE unable to claim back the GST amount), this is not terribly important to you. However, if the entity you are buying in IS registered for GST and CAN claim back GST paid, how the GST is applied is VERY important. There is a provision in Land Contracts for the Vendor to apply the Margin Scheme provided the Purchaser agrees in writing (in the Contract). Typically, people are not aware they have agreed to this when signing the Contract. Contact us to see if GST is applicable to your Contract.
Should I use the Conveyancer the Agent recommends?
The Real Estate Agent acts for the Vendor and is paid by the Vendor. If the Conveyancer or solicitor referred by the Agent obtains most of their business through that Agent they may be more interested in looking after that association than making sure your interest is protected.
Should I use the same Conveyancer as the Vendor?
Generally speaking you shouldn’t use the same Conveyancer as the other party to the transaction. At //Adcocks we prefer to act only for you because any advice we give you will not compromise the advice we would give to the other party. Any possible cost saving can be insignificant where a problem occurs and you may be required to engage another Conveyancer at the last minute resulting in far greater costs.
Should you be unclear on what you wish to do or should you wish to discuss these terms further please contact //Adcocks.
Can I on sell my Contract?
Yes, you can sell your interest in a Contract but the process is fraught with difficulties. //Adcocks are familiar with the issues involved and can prepare the documentation. You should be wary of signing a Contract with the intention of on selling your interest without first speaking to one of our Conveyancers.
What happens if I can’t get Finance?
If your Contract is subject to you obtaining finance, you must consider your position carefully. If you waive the Clause, and make the Contract unconditional you may incur large costs if you cannot settle. Usually if you have done everything possible to obtain the finance, but have failed, your costs to terminate the Contract should be minimal. However, ignoring the clause will not make it go away! //Adcocks will deal direct with your financier and ensure you have sufficient time and advice to make the right decisions.
If you do not have your finance in order and would like assistance, click here.
//Adcocks does not receive a fee or commission for it’s referrals.
It is important that you understand your obligations with regard to all the Contract conditions. //Adcocks can provide the expertise necessary to deal with these issues.
What happens after I sign the contract?
Once you’ve signed the Contract and associated forms, you need to start working towards Settlement. This means, your financier and your Conveyancer will need a copy of the Contract immediately so documentation can be prepared to avoid delay.
If you bring your Contract to our office, we’ll make copies and supply them to the relevant people on your behalf. This must be treated as a matter of urgency as the process from signing to Settlement is typically 4 weeks; and some financiers require all of that time to be ready.
What is a Form 1 (Cooling off Form)?
The Vendor Disclosure Statement, a Form 1, must be issued by the Vendor to the Purchaser upon the sale of all property. Usually the Agent for the Vendor obtains all the required searches and completes the Form 1 and the Vendor is required to sign to confirm its accuracy. Essentially the Form 1 is required to disclose everything which currently effects the title and the land. The disclosures should include any known land contamination, building works done without approval, any Council conditions which continue to apply, whether the Government has indicated that the property is required for future road use, and it should list all mortgages and caveats lodged against the title and whether these are to be paid out at settlement. The Form 1 is a lengthy document and should be read carefully before signing any Contract.
Most Purchasers are entitled to have two clear business days, after the Contract has been signed, to consider whether they want to continue with the purchase. This “Cooling Off” period is not available where a property is purchased at auction and it is not available to companies and under some other circumstances. You shouldn’t sign any Contract unless you have every intention to proceed with the purchase.
What should I consider before signing a Contract?
Signing the Contract?
Should we hold our property as Joint Tenants or Tenants In Common?
This depends on your personal circumstance and why you bought in the first place. A surviving Joint Tenant, will upon the death of all the other Joint Tenants, become the sole owner of the property (even if their last Will says something different). Typically, couples who purchase a home to live in, choose to be Joint Tenants so that the survivor has a secure home. Joint Tenants must equally share the ownership. Ie half each or one third each with three owners.
Tenants in Common usually are business partners. A Tenant in Common can leave their share in the property to anyone they include in their last Will. Tenants in Common can own different proportions of the property.