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Buying residential property

This article discusses the process and legal requirements of buying a residential property.

Do I need a Lawyer to Buy a Residential Property?

You can buy a residential property without consulting a lawyer.

However, you should definitely consider seeking the assistance of a experienced property and conveyancing lawyer.  The purchase or sale of a property is a high value transaction that involves risk and can be stressful and confusing.  An experienced lawyer will review contracts, negotiate with the vendor or purchaser, assist you in property disputes and provide advice regarding issues in other related areas of law.

Brander Smith McKnight uses lawyers for all property and conveyancing transactions, we do not use conveyancers.

The Process of Buying Residential Property

The process of conveyancing from exchange of contract to the completion of the sale, called the settlement, typically takes 6 weeks. However, this period can be shortened or extended. The process of buying a residential property has four main stages.

Preparing for Purchase

If you require a loan to purchase a residential property you should seek to have a loan pre-approved.  This approval is based on your assets, income and your ability to make repayments.  Typically the bank will set an amount that they are willing to lend you. Once you have selected a property, your bank will assess that particular property and approve (or decline) the loan for that property.  It is important to ensure that you have allowed for associated extra costs such as stamp duty.  You should consider having the property inspected for structural defects or pests for a house and obtain a strata report for an apartment.  The lawyers at BSM can organise these reports and scrutinise them for potential problems.

The contract for sale of the property is then reviewed.  An experienced lawyer will ensure that you understand all of the rights and obligations that arise under the contract.  In addition, a lawyer will advise if there are any problematic terms in the contract and negotiate amendments according to your instructions. This helps mitigate the potential for future disputes between the parties to the contract.

Exchange of contracts

Prior to the exchange of contracts, both parties will come to an agreement regarding the terms of the contract and the purchase of the residential property.  Once agreed on, the contracts are signed by both parties and exchanged.  This can occur in a real estate office or via the respective lawyers.  Following the exchange of contracts, the deposit on the property will become payable,  Typically, unless formally waived, there will be a cooling off period after the exchange which is usually 5 business days. During this period the purchaser has the right to withdraw from the contract . If you have purchase a residential property at auction, there will be no cooling off period and the contracts are exchanged and binding at the fall of the hammer.

Preparing for settlement

Prior to settlement a property and conveyancing lawyer will make various inquiries in relation to the residential property. For example, determining whether the property is heritage listed, council zoning or building approvals or whether there is existing money owing on the land.  A lawyer will ensure that approvals, funding and mortgage documentation is in order and prepared for settlement.

The purchaser must pay the stamp duty on the property, which must be paid within three (3) months of settlement.  However where a mortgage is involved the mortgagee (bank) will require stamp duty to be paid on or prior to settlement.

Prior to settlement you should make a final inspection of the property being purchased to confirm that there has been no damage or changes to the property.

Settlement

Settlement is the final step in the conveyancing process.  Upon settlement you will become the owner of the residential property you have purchased.  It is now common for settlements to be completed electronically.  A property and conveyancing lawyer can assist you in negotiating a simultaneous settlement. A ‘simultaneous settlement’ refers to situations where the sale and purchase of properties occur at the same time.  The lawyer will then lodge the relevant documentation for the transfer of property in the NSW Land Registry Services.

Brander Smith McKnight’s expert property and conveyancing lawyers can provide you with advice and assistance throughout the entire process of purchasing a residential property.  We will ensure settlement is completed smoothly which includes ensuring the mortgagee is prepared, both the purchaser and vendor have completed all necessary steps and that all relevant documents for the transfer and payment of stamp duty are lodged.

What can I do if the contract has been breached?

Brander Smith McKnight’s expert property and conveyancing lawyers can help you where a party has breached a contract for the sale of property prior to or after settlement.  We will advise you of your rights and in consultation with you develop a strategy for the resolution of the breach.  This can include negotiation, alternate dispute resolution or litigation.

We resolve the vast majority of disputes without litigation saving our clients considerable amounts in legal fees.  If litigation is necessary our lawyers are highly experienced court advocates with a panel of expert barristers available if required.  We can either seek compensation for the breach or seek to have the contract performed.

Why use BSM Lawyers when Buying Residential Property?

  • We have highly experienced property and conveyancing lawyers and appreciate how important the purchase of your property is.
  • We will alleviate your stress by ensuring that the process is properly managed and runs smoothly ensuring that all of the detailed documentation is completed thoroughly and on time.
  • We will keep you well informed and explain things in clear and simple terms.
  • We provide a competitively priced fixed fee.
  • All of the work is performed by lawyers, we do not use conveyancers.
  • Our lawyers have experience in all types of title, including torrens, strata and company.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

Brander Smith McKnight has offices conveniently located in Sutherland, Parramatta, Wollongong, and Sydney CBD.

FAQs

chevronWhy is it important to have my contract reviewed by a lawyer when buying a residential property?

A lawyer can ensure that you understand all of the rights and obligations that arise under the contract and advise you if there are any problematic terms to your contract.  If there are problems a lawyer can negotiate amendments to your contract according to your instructions.  This mitigates the potential for future disputes between the parties to the contract.

chevronDo I need a lawyers help when buying a residential property?

You can do your own conveyancing, but it is not wise to do so.  The purchase of a property is an expensive transaction that involves considerable risk.  There are many factors that need precise coordination, for instance approval of funding, loan and guarantor documentation, transfer documents, identification documents, stamp duty documents and registration of title.  The process of conveyancing is complex, time consuming and can be very stressful and cause considerable financial loss if performed incorrectly.

chevronWhat costs arise in relation to the buying of a residential property?

  • Stamp duty
  • Title search fees
  • Lawyer fees
  • Fees associated with mortgage and loan documents
  • Registration fees
  • Insurance
  • Removalists fees
  • Property inspections

chevronCan I buy a residential property that is not built yet?

Yes, this is known as buying an ‘off-the-plan’ property.  Put simply, ‘off-the-plan’ property refers to property that does not exist yet.

chevronWhat is a cooling off period?

In NSW, a cooling off period is a period of time that commences after the exchange of contracts.  During the cooling off period the purchaser can rescind their contract and not proceed with the purchase.  The length of a cooling off period is set under law by default as 5 days, however, a shorter or longer cooling off period can be negotiated prior to exchange.  There is no cooling off period following an auction.

chevronWhat is the Transfer?

The Transfer is a legal document that swaps the ownership of property from one party to another. A property and conveyancing lawyer can prepare this document for you.

chevronIf I am looking to purchase a residential property at auction, should I have a lawyer review the contract of sale prior to the auction?

You should consider having a lawyer review a contract of sale for a residential property before bidding at an auction. There is no cooling off period for properties purchased at auction and you will be bound to the terms of the contract immediately.  By having a property lawyer review a contract prior to bidding at an auction you will be aware of your rights and obligations under the contract. In addition, potential problems may be discovered and the terms negotiated on your behalf prior to the auction.

chevronWhat are special conditions in a contract of sale?

Special conditions in a contract of sale refers to terms agreed between the parties to the contract that must be satisfied or waived before the contract can be settled.

chevronWhat is a Certificate of Title?

A Certificate of Title is a document that provides evidence of an interest in property.

A Certificate of Title provides various details regarding property, including who owns the property, the boundaries of the property and any mortgage on the property.

chevronWhy should I use a lawyer and not a conveyancer when buying a residential property?

Property lawyers and conveyancers are not the same. We advise using an experienced property lawyer when buying a residential property.  A property lawyer has a broad legal knowledge and can assist you with related legal issues and identify complex potential issues with a property purchase.  A conveyancer is only permitted to practice conveyancing.

chevronWhy should I obtain inspection reports if I am buying a residential property?

Whilst it is not compulsory to have a prospective property inspected before purchase, it is advisable to do so.  The property may have pests or building defects not visible to the naked eye that could dramatically decrease the value of the property and be expensive and problematic to rectify.  Once the exchange, including the cooling off period, has occurred you will not be legally protected and likely unable to negotiate a lower price or solution.

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