Buying process basic questions

S

stinadaze

Quick couple of question re buying process. I’m sure there is a thread (or several of them!) running around with this info but I cant find it!

Basically once you’re interested in a property you make an offer and hope its accepted. If it is, is the 025% “deposit” payable by force or optional? Does this 0.25% safeguard you against being gazumped? Are any documents signed upon this initial agreement? Does the 10 day cooling off period apply after this 0.25% is paid, or after the proper deposit is?

Thanks so much and your feedback would be great!

CHEERS!
 
I wish I had a $ for everytime I posted this :D

There are 2 ways to purchase property in NSW (excluding auctions, which are pretty much the same everywhere):
Way 1
1. Sign a contract in the REA's office & pay 0.25% deposit. 5 business day cooling off period begins.
2. Do pest, building, finance approval within 5 days. Seek, but don't necessarily gain, an extension of time if there are hold ups getting this done (quite common at the moment).
3. All good? do nothing - day 6, pay up the balance of 10% i.e. 9.75% and contracts are formally exchanged by default
4. All not good? i.e. termites found and you want to pull out. Rescind the contract and forfeit the 0.25% deposit to the vendor
5. If contract not rescinded, then settlement in 42 days later (typically)

Way 2
1. Make a written or verbal offer. Written offer has clause such as "finance approval, building and pest, settlement period", verbal the same.
2. If the vendor accepts the offer (written or verbal), finance approval, building and pest inspections are initiated
3. Vendor's solicitor issues contract to your (purchaser's solicitor)
4. All good? Sign contracts, pay 10% deposit. NO cooling off period applies. You sign a 66W form along with your solicitor, that you acknowledge that no cooling off period applies.
5. Contracts are exchanged
6. Settlement in 42 days later (typically)

Only under Way 2 are you open to being gazumped. This can happen at any point up until points 4. & 5. i.e. the other purchaser could buy the property before contracts are exchanged and you would miss out.
 
Oh thank you so much! geez you look this up and you find pages and pages of info but nowhere is it summarised as beautifully as this!!

That is exactly what I needed to know!!!

Cutting and pasting this into my notes folder :D
 
marmalade said:
Is this the same in QLD?
Click to expand...

very similar...

In qld:

an offer is generally made on the same paperwork that is the contract (can be done verbally, but still). The document legally becomes a contract when both parties agree on terms, conditions and price and both sign.

the deposit can be any amount - there is no legislative requirement as to a percentage etc.

the 5 day cooling off period starts once the contract is effected (i.e. document signed).

you can have any length of time for building/pest/finance and any other special conditions - but the cleaner and shorter the better. there is no standard, but around 5% deposit, 21 day finance, 14 day building/pest and 30 day settlement seems to be most common.

there is a 0.25% penalty that can be enforced if a buyer pulls out under the cooling off period - but enforcement is rare...and most people pull out under finance or the like anyway.

did I miss anything??
 
I believe qld isnt similar at all in the way things work

2 major things

1. Once the offer is countersigned by the seller, the buyer has the contracted time to do their finance et al. QLd alspo has cooling off,but only 3 days

2. Once u have finance approved and have said you are now unconditional, then if you dont settle on the day required, you can lose the place and your deposit. All other states in Aus have a notice to complete period, usually 14 days. You might pay penalty interest, but u still have a legal right to your deposit and to complete the contrac. In Qld , you are now up to the good will of the seller.

ta
rolf
 
i was trying to keep it fairly simple - but for clarifications sake...

Rolf Latham said:
I believe qld isnt similar at all in the way things work

2 major things

1. Once the offer is countersigned by the seller, the buyer has the contracted time to do their finance et al. QLd alspo has cooling off,but only 3 days
Click to expand...

If an offer is "countersigned" it has not been accepted, countersign infers that there is a counter offer by the seller. You are referring to acceptance and signing of the offer by the seller which then becomes a contract.

The time stipulations on finance (and building/pest)do not kick in until it is a contract - i.e. signed and agreed to by both parties on terms, conditions (finance) and price.

qld has 5 days cooling off. the cooling off period forms part of the warning statement (Form 30C) that must be attached to the front of the contract documents before it is signed by the buyer.

Rolf Latham said:
2. Once u have finance approved and have said you are now unconditional, then if you dont settle on the day required, you can lose the place and your deposit. All other states in Aus have a notice to complete period, usually 14 days. You might pay penalty interest, but u still have a legal right to your deposit and to complete the contrac. In Qld , you are now up to the good will of the seller.
Click to expand...

Finance is only one of the possible conditions - just because finance is approved doesn't make it unconditional, it relies on other factors including building and pest. Each condition must be completed within the agreed time frame.

The notice to complete period you speak of is covered by the settlement date stipulated in the contract.

If the buyer fails to comply with any provision in the contract, the seller may affirm or terminate the contract. Either way, the seller is entitled to sue for damages. Depending on the scenario, they may also sue for or claim deposits, specific performance and/or forfeit the deposit and interest earned and resell the property.
 
Last edited:
Alabex said:
i assume you just have it sitting in a word doc on your desktop somewhere and just copy and paste.
Click to expand...

Yes, I do.....now. Of course - so do solicitors etc that charge full fees for pressing the reprint button on docs they send out too :p.

But my original statement was said in jest - I have a WSOH ;)
 
urban cowboy said:
i was trying to keep it fairly simple - but for clarifications sake...



If an offer is "countersigned" it has not been accepted, countersign infers that there is a counter offer by the seller. You are referring to acceptance and signing of the offer by the seller which then becomes a contract.

The time stipulations on finance (and building/pest)do not kick in until it is a contract - i.e. signed and agreed to by both parties on terms, conditions (finance) and price.

qld has 5 days cooling off. the cooling off period forms part of the warning statement (Form 30C) that must be attached to the front of the contract documents before it is signed by the buyer.



Finance is only one of the possible conditions - just because finance is approved doesn't make it unconditional, it relies on other factors including building and pest. Each condition must be completed within the agreed time frame.

The notice to complete period you speak of is covered by the settlement date stipulated in the contract.

If the buyer fails to comply with any provision in the contract, the seller may affirm or terminate the contract. Either way, the seller is entitled to sue for damages. Depending on the scenario, they may also sue for or claim deposits, specific performance and/or forfeit the deposit and interest earned and resell the property.
Click to expand...

I am in agreeance with this UC. (For QLD props)

Cheers,

F
 
going back to the first few steps in the process, when a price is settled upon and a 0.25% holding deposit is paid you get the 1st page of the contract. somewhere around this point the page must be signed before the cooling off period starts to apply right? or does it start the day you pay the holding deposit without anything being signed?

And it is the agent or the vendor's solicitors that sends the contract to the purchasers solicitor?

thanks!
 
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