Torrens Title - Torrens title is the most common
form of title and is the normal type of title for a standard
home or block of land.
System - Old system is the type of title that occurred in NSW
at the beginning of the last century. It is based on keeping
a record of all of the original deeds of the property. In other
words it is not computerised. There is only about 3-4% of properties
in NSW that are still under Old System.
Strata Title - Strata title is the normal type of
ownership for units or townhouses. It means that the owners
of the "complex" share
in the cost of common property, such as communal hall ways,
roads and walls. There will be a management committee of
the owners called a Body Corporate and there will be levies
raised from each owner for common expenses.
Community & Neighbourhood Title - Community and
Neighbourhood title are normally in addition to Torrens title
and apply to common areas. A group of houses on Torrens title
might share ownership over a common driveway or common entertainment
areas such as playgrounds or swimming pools. Like Strata
Title there will be levies raised on each owner for the
costs of upkeep of common areas.
Company Title - Prior to the introduction of Strata
Title people used Company Title for apartment complexes.
In this form of ownership a Company owns all of the property
and what you are buying is shares that give you the right
to occupy a certain apartment.
We recommend that you get a property inspection report done
by an independent (not recommended by the owner or agent) inspector
for the property you are looking at.
There are a few different types of inspections (all of which
we can arrange on your behalf or you can arrange your own):
Building Report - A building report is a visual inspection
that looks at the structural integrity of the home and will
tell you if there are any repairs that are needed to the property.
Pest Report - A pest report is a visual inspection to see
if there is any evidence of termite damage or conditions that
are conducive to termite attack.
Strata Inspection Report - If you are purchasing a property
within a Strata, Community or Neighbourhood plan (where levies
are paid for the upkeep of common property) an inspection is
carried out on the financial and minuted records of the Body
Corporate. This is necessary to determine whether or not the
Body Corporate is underfunded or may have other risks that
are not evident from just looking at the property.
Survey Report - A survey report will identify where
the building has been built on the land in comparison to where
the actual legal boundaries are. This is required in case part
of the building is built over on the neighbours property and
/or the neighbours property is built on the land that you are
buying. An up to date survey is also required if you want to
get a Building Certificate from the Council.
Building Certificate - A building certificate is obtained
from the local Council and is a certificate from the council
certifying that all of the buildings either have been approved
or would be approved by the Council.
Other - Other types of inspections and reports can
be obtained for a variety of things if it is deemed necessary.
The other types of reports (although not limited to these)
are: Smoke tests; Engineers certificate; Geotechnical Reports;
Swimming Pool report.
Once you have agreed on a price with the owner the contracts
have to be "exchanged" before there is any legally binding
agreement. The exchange takes place after both the owner and
buyer have signed their respective contracts and the buyer
has handed over the deposit. Then either the agent or your
conveyancer will compare both contracts to ensure they are
identical. Once this is done the contracts are swapped i.e.
the owner is given the buyers contract and the buyer is given
the owners contract (the owner and the buyer's conveyancers
may act as agent for the owner and buyer in this situation).
The "exchange" has
then taken place and that is then the date that is entered
onto the contract.
Once "exchanged" the contract is legally binding on both parties.
Normally the deposit to be paid will be 10% of the purchase
price. However it may be possible to negotiate a lower deposit
if there are good reasons as to why you cannot come up with
that amount of money. The deposit is normally paid by cheque,
which can be a personal cheque.
If you have difficulty getting access to the deposit, you
may be eligible to get a Deposit Bond.
A Deposit Bond is normally used by people where all of their
cash is tied up in their current home or they are borrowing
the full purchase price.
We can issue On the Spot Deposit Bonds which are provided by Vero Insurance
Limited, provided you have a written unconditional loan approval
or if your funds are coming from the sale of your home, a copy
of the exchanged contract.
All residential contracts have a mandatory "cooling off period" of
5 working days. This means that only the buyer can pull out
of the contract without any reason within the 5 working days
after the date of the contract. The owner does not have the
option of pulling out at any time.
If the buyer pulls out of the contract they will forfeit 0.25%
of the purchase price to the owner and the balance of the
deposit will be refunded to the buyer.
Once the contract has "cooled off" it will become unconditional
and the buyer will be bound to the terms of the contract.
The contract also allows for the cooling off period to be
waived, provided that the buyer has had the contract explained
to them by a conveyancer and the conveyancer signs a certificate
(section 66W certificate) on their behalf. If this is done
then there will be no cooling off period and both parties will
be unconditionally bound to the terms of the contract.
If you are going to have a mortgage / loan on your property
you will need to ensure that you have written approval from
your lender before the contract becomes unconditional.
Most lenders will give you what they call a "pre approval" which
indicates that they will loan you up to a certain amount. However
this is not good enough to rely upon, as it is normally dependant
upon a valuation of the property. What you need to get is an
unconditional loan approval.
Stamp duty is payable on all contracts. It is paid to the
NSW government and is based on a scaled formulae. Stamp duty
is normally paid before settlement, even though legally you
have 3 months to pay it.
If you are a First Home Buyer you may be eligible to a concession
on the amount of duty you have to pay.
Your contract will have a completion period that is normally
42 days (6 weeks) from the date of the contract. This period
can be negotiated up or down before you sign the contract.
Completion also known as settlement is when you finally pay
all of the money for the property, become the legal owner and
collect the keys before moving in.
We arrange the settlement and coordinate any mortgage / finance
provider to ensure that everything goes through smoothly and
you become the new owner.
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