Conveyancing process – A simple guide and our top 5 tips when purchasing property
When you buy property in Victoria, under all circumstances, you require the assistance of a property lawyer or a qualified and experienced conveyancer. It basically means that when buying a property, you will need to be advised of exactly what the conveyancing process entails.
Generally, a conveyancing transaction consists of three main stages:
- Pre-contract
- Pre-completion
- Post-completion
Experienced property lawyers have specified and detailed knowledge about property conveyancing and a broad knowledge of property law, such as consumer law provisions, and the various legislation that applies to buying and selling land. Generally, it is advantageous to have a legal firm and solicitor working in your best interests.
Caveat Emptor – ‘Buyer Beware’
When buying real estate, the buyer assumes all risk. It is up to the purchaser to make any and all investigations in regard to the contract, the property, and to conduct all due diligence enquiries before they sign the contract. It is solely their responsibility. As signing the contract deems that you have understood the contract and you will be held to its contents.
However, this does not give the seller the right to provide misleading or fraudulent information. A purchaser can rely on Australian Consumer Law provisions to terminate the contract, if the information relied upon to purchase the home, is misleading and/or false.
Things that the buyer should investigate but are not limited to are the following:
- Having a lawyer review the contract and vendors statement before signing anything.
- Check the person selling the property is the person who owns it.
- Making enquiries with local Council on planning or building applications nearby.
- Checking for encumbrances e.g. caveats, planning restrictions and overlays, or easements
- Checking if you can do what you want with the property such as extensions, subdividing, and development.
- Details of building permits over the last 7 years and check to see if any building works performed without a permit by the current owner could be raised as a issue by Council in the future.
- If there is a pool, spa, or pond, is it properly fenced, registered and up to current compliance codes.
Our top 5 tips when purchasing property to protect yourself
1. Make your own enquiries
Remember the real estate agent has been hired by the vendor and they do not act for you. They are required to disclose certain information to you by law, but they may miss providing important details that could affect you after settlement. Don’t solely rely on what the agent or seller tells you. You need to understand the price you should be paying for the property given the area, council rates, stamp duty, transfer fee, government fees, and other fees that may be involved if you purchase the property. Whether the bank will lend you enough money, do you have pre-approval and what are the estimated repayments for the loan. You need to be well-versed in all areas of the process to make sure you fully understand what you’re entering into, not just what you’ve been told by someone not invested in the future ownership.
2. Arrange for a building and pest inspection
These are essential and can be added to the contract as a special condition or arranged for in the Cooling Off period (usually 3 days after contract signing). These inspections will come at a cost but will be well worth it for your peace of mind. They will reveal if the property has any defects or requires any type of work. The inspection reports should also be able to provide an indication of what it would cost to fix the issues. If there are defects found, this can provide you with the opportunity to cancel the contract if a major structural defect or a major pest infestation is found, you could also negotiate and check to see if the vendor will complete the repair works prior to settlement or give you the opportunity to renegotiate the contract price if you want to do the works yourself.
3. Employ a property
There is no substitute for using an experienced conveyancer or a property lawyer to act on your behalf. Given your primary goal when buying property is to increase your wealth, it makes sense to pay for professional advice to protect yourself and your investment from any mistakes or things that you didn’t consider or turn your mind to being a key aspect of your purchase (for example, rental possibilities or surrounding developments). Your conveyancer will be able to do all the necessary statutory searches and then be able to go through these documents with you, as they understand it all, and see if there are any issues or things to note. It’s during this process that you may discover that the Council has the right to widen the road or take part of your land or that the sewer is on your property, and they will be digging up your entire front yard.. There’s a lot involved in reviewing a contract and conducting due diligence investigations. Making enquiries and engaging a lawyer upfront is going to be well worth your money down the track and it could end up saving you hundreds of thousands of dollars from a simple oversight.
4. Title insurance
Another way you can protect yourself is to take out title insurance. This form of insurance is the most comprehensive protection against risks that may affect the legal ownership of your property and your right to occupy and use the land, and it’s good for the entire period of your home ownership. It protects you from future events like finding out that your boundaries are in the incorrect place, and the previous owners built on a part of your neighbour’s property. It also protects you in instances like if the Council sends a notice saying you have a structure on your property that did not get approved with permits and must be pulled down. Your conveyancer will be able to give you more advice about the merits of this type of insurance.
5. Ask questions
Lastly and importantly make sure you ask every question you can think of. Your conveyancer never actually goes to see your property. So, it is up to you as the purchaser, the one signing the contract and being held to the agreement, to ask all the questions. Ask the agent, ask the Council, ask your conveyancer. It’s best to have asked the question than to think it doesn’t matter and later have it be an issue and cost you lots of money, it could be a very expensive lesson to learn! There are so many things to understand, and you should utilise all the resources you have to make sure you understand everything before your sign on the dotted line.
Bellarine and Surf Coast Conveyancing
If you’re interested in knowing more about what is required when buying real estate, speak to our expert property lawyer at The Hrkac Group.
A smooth property settlement depends on all legal and financial obligations being met, and that can require liaison between a number of different parties including solicitors, lenders, and real estate agents – even representatives of local councils.
Our lawyers and conveyancers’ expertise and experience in facilitating a stress-free settlement can help ensure a positive outcome for you. So, whether it’s a change of name or transfer of title, an application for subdivision, or any matter regarding commercial or residential conveyancing, you can rest easy knowing it can be handled under one roof at the Hrkac Group. If you’re looking for conveyancing/property law services, look no further. To make an appointment to meet one of our friendly team at HG Legal Services today, feel free to contact us via email at legal@hrkacgroup.com.au or phone (03) 5224 2366.
If you’re buying or selling a property in Geelong, you may have heard a lot of different terms being thrown around. But don’t be overwhelmed if you haven’t heard the majority of these before. With the help of experienced Geelong conveyancers, you are still more than capable of completing the purchase or sale of a home.
Our friendly Geelong conveyancers at the Hrkac Group have compiled an easy reference guide of some of the most common conveyancing terms to help you through the process. Refer to this glossary of conveyancing definitions as you come across them on your property selling or purchasing journey.
Agent
The real estate agent who the seller, or vendor, has engaged to manage the sale of the property.
Auction
When the sale of a property is conducted in public and is sold to the highest bidder.
Caveat
A caveat is a legal claim lodged against a property by a person with an interest in the property. A caveat will prevent a property from being sold or transferred unless it is removed.
Common property
Areas of a property used by and belonging jointly to all owners of a property. This applies to such properties as apartment blocks or multi-dwelling complexes.
Contract of Sale
A written agreement between the buyer and seller of a property that outlines the terms and conditions of the sale, inclusions, price, descriptions of the property, and completion date.
Cooling off period
A period of three business days which commences from the date when an exchange of contracts has taken place between the purchaser and the buyer of the property. During this time, the purchaser can choose to walk away from the contract, though may be required to forfeit 0.2% of the purchase price. There are some circumstances in which a purchaser can’t cool off, such as buying at an auction.
Covenant
An agreement creating an obligation on the titleholder of a property to do or refrain from doing something. For example, a restrictive covenant could state that no more than one dwelling may be built on the land.
Deposit
A percentage of the purchase price for the property being sold. This amount of money is paid by the purchaser as an assurance that they are going ahead with the purchase of the property in question. This amount is usually held by the estate agent until all paperwork for the purchase of the property has been signed.
Easement
A right to use and access part of the land on the property. This right can belong to someone who is not the landowner. An easement is typically used when access is required for wires and pipes for maintenance of sewage, drainage, and electricity. An easement can also refer to shared driveways and paths on a property.
Encumbrance
Refers to the fact that there’s a mortgage or caveat registered for the property title.
Equity
Having ‘equity in your own house’ refers to the difference between the market value of a property and what is still owing on a mortgage. This will increase as the loan is repaid or as the property’s market value increases.
Finance
Pre-approval is the stage where your bank/lender has confirmed an amount you are able to borrow, based upon your financial position. Finance is not guaranteed at this point and is conditional.
Unconditional Approval is the stage where your bank has carried out all the necessary enquiries, including a valuation on the property it is taking as security and has agreed to formally lend you the funds required for your purchase. This stage is “unconditional” because it doesn’t have any further conditions attached to it, except for the execution of documentation.
Fixtures
Items that are attached to the property and which ownership moves from the seller to the buyer with the property.
Joint ownership
Title to property is held in one of two ways. Joint tenants means that each person owns the property jointly and equally. In the event of one joint tenant surviving the other, the property automatically passes to the remaining joint tenant or tenants. Tenants in common means that each person owns a share (can be 50/50, 70/30, 99/1 or any share you wish) in the property. On the death of one party that share passes to whoever inherits their estate, so having a current Will is essential.
Mortgage
An amount of money loaned to a person or entity that is used to define the purchase of a property. This will be registered on the title to the property and can be used to claim a legal interest in the property purchased.
Mortgagor
The person or entity who receives the mortgage.
Mortgagee
The person or entity who provides the mortgage.
Mortgage guarantee insurance
Paid by the borrower to protect the lender against failure by the borrower to keep up mortgage repayments or to pay back the loan in full when it is due. Such insurance normally applies where the borrower’s loan exceeds 80% of the value of the property. This type of insurance is taken out by the lender, with the cost passed on to the borrower. The borrower remains liable for any shortfall; for example, if the property is sold and the proceeds do not cover what is owed to the lender.
Off the Plan
An ‘Off the Plan’ property is a unit or house that has not yet been built, and you have agreed to buy based on the Developers’ plans.
Owners corporation
Formerly known as a body corporate. An owners corporation has the collective ownership of the common area in a subdivision of land or buildings. It is responsible for the administration, upkeep, and insurance of the common area shared by all the owners (the common property).
Section 32/S32
Information that the seller must provide to the buyer advising of restrictions such as covenants and easements, outgoings such as rates, and any other notices such as compulsory acquisition. Also known as a vendor’s statement.
Settlement
When ownership of a property passes from the seller to the buyer and the balance of the sale price is paid to the seller.
Stamp duty
A state government tax, based on the sale price of a property, paid by the buyer when property ownership is transferred. Also known as duty.
Statement of adjustments
A document that includes all the adjustments of certain costs such as taxes, rates, water, rent, and how they are divided up between the purchaser and the vendor. Until settlement, the vendor must pay all expenses pertaining to the property. These expenses transfer over to the new owner of the property upon completion of the settlement.
Subdivision
The process of dividing one piece of land into different lots. This is a common practice among buyers who wish to buy land with the intention of building multiple houses or units on it.
Subject to finance
A contract clause that states the purchaser of the property in question has to obtain finance for a set amount by a certain date. Failure to do so releases them from the buyer’s contract without a financial penalty.
Title
A legal document identifying who has a right to the ownership of a property.
Transfer of Land
A document recording the change of ownership of a property from the seller to the buyer.
Vendor/Seller
An individual or entity selling land.
Zoning
The permissible uses of an area of land as stipulated by the council.
Geelong Conveyancing
If you’re interested in knowing more about what is required when buying or selling a home, speak to the expert Geelong conveyancers at The Hrkac Group. A smooth property settlement depends on all legal and financial obligations being met, and that can require liaison between a number of different parties including solicitors, lenders, and real estate agents – even representatives of local councils.
Our Geelong conveyancers’ expertise and experience in facilitating a stress-free settlement can help ensure a positive outcome for you. So, whether it’s a change of name or transfer of title, an application for subdivision, or any matter regarding commercial or residential conveyancing, you can rest easy knowing it can be handled under one roof at the Hrkac Group. If you’re looking for Geelong conveyancing, look no further. To make an appointment to meet one of our friendly Geelong Conveyancers today, feel free to contact us via email or phone (03) 5224 2366.
Buying a house is such an exciting time, that sometimes the most important pieces get glossed over, only to come crashing down later on in the purchasing process – with little you can do about them then.
We want the process of purchasing a house to be an exciting and happy one, so here are the top 5 questions you should be asking about the property you’ve got your eye on, to make sure it’s a good decision for your heart as well as your wallet.
Questions to ask before buying a house:
Do I need a building inspection done on the house I want to buy?
YES!
A lot of people sign contracts ‘subject to a building inspection’ which is a great way to safe guard yourself against uncovering major structural defects not visible from the outside. Although a contract signed with this condition will allow you to withdraw from purchasing the property if any major issues are found, it doesn’t safeguard you against any minor defects found.
Even though the word minor sounds ok, it could still mean you’re out of pocket thousands of dollars to fix so, we recommend getting a building inspection completed BEFORE you put in an offer. This way, you can adjust your offer according to what’s found, or you can walk away will your deposit still in your account.
What do I need to know if the previous owners have renovated the house themselves?
With a plethora of home renovation shows on the box these days, it appears every second person thinks they’re a bona fide tradie. If there has been work done to a property by the owner in the six years and six months pre-contract, they automatically become an owner-builder and must, by law, include a Defects Report in the Section 32 for the property. Even if they didn’t need a Building Permit to complete the works – it doesn’t mean they can sell the house carefree.
If there is no Defects Report in the Section 32, you will almost certainly be able to withdraw from the contract at any time prior to settlement.
Can I sign the contract without engaging a conveyancer?
Although it may seem obvious, so many people sign contracts without getting legal advice first. You wouldn’t buy a second-hand car without getting it looked over by a mechanic, so why buy a house without having the contract looked over first? Conveyancers know what they’re looking for in property contracts and can identify hidden details before you sign your hard-earned money away.
Here at the Hrkac Group, we look over your contracts for free – so it’s really a no-brainer.
Where should I buy an investment property?
So you’ve worked hard and saved some money and you’re looking to invest in property. Great, but looking for an investment property and looking for a house to live in yourself are completely different.
Remember, if you’re looking for an investment property, you’re not planning to live in it yourself so you can expand your horizons. Look outside the suburbs you want to live in, you don’t even have to like it – that doesn’t mean it’s a bad investment.
You’ll need to decide what sort of investment property you’re after though – do you want high rental income, or capital growth promise? Looking for a low maintenance place, or are you capable of being the on-call handyman?
Should I put my name on the contract?
If you own a business, it could be a smart move to leave your name off the house contract. To protect your assets, so that if you get sued at work, putting your partner’s name on the contract will remove that asset from the proceedings, keeping it protected against being taken in the legal settlement.
Although this sounds simple enough, there are always other factors to consider – like the effects this will have on your, and your partner’s tax return. Here at the Hrkac Group though, we are a full-service firm so we have an accounting team, a legal team and a mortgage broking team to cover the entire process in house.
So, if you’re thinking about buying a new property and looking for Geelong conveyancing, look no further. You should start by calling the Hrkac Group and talk to our Legal Services team, and we can take care of things from there. Call us on 03 5224 2366 or contact us here.
As a result of everything that has happened this year, we are seeing the lowest interest rates on offer from the major banks in a long time. With rates dropping below 2.5%, now is the best time to get one step ahead on one of your biggest debts.
Whether you’re looking at purchasing a new property, or already have a home loan to pay off, these low rates are going to be in your favour.
If you already have a home loan, the temptation to drop your repayments is there, now that your loan is accruing less interest however, we have some top tips on how to use this drop in interest rates to your advantage and come out the other side a winner:
Don’t decrease your repayments.
If you can afford to, leave your repayments at their current rate (or even increase them!) so that you are effectively overpaying on your loan. By simply putting away an extra $50 on top of your minimum repayments you could save yourself over $14,000 in interest over the life of your loan (based on a $300,000 loan with 5% interest over 25 years) – more money in your pocket!
Choose a fixed loan.
Fixing all or part of your home loan is the best way to take advantage of the low rates and protect yourself against sudden rate increases over the next few years. This gives you some peace of mind that you won’t be surprised by any sudden or dramatic rate increases and you’ll know exactly how much you need to put away each month to make the repayments.
Open an offset account.
Some loans come with the ability to offset your savings account against your home loan. This in turn reduces the interest you pay on your home loan, by offsetting the interest your savings accrues. This is another way to add a buffer to the amount of interest you pay on your home loan.
At The Hrkac Group, our Finance team can help you find the right loan, set up an interest rate to suit your needs. Give us a call today on 5224 2366 with your questions.
Geelong Finance brokers and Conveyancing teams at The Hrkac Group were pleased with Interest Rate Reduction announcement.
The Geelong Finance and Conveyancing team is pleased that just moments after the Reserve Bank Australia (RBA) announced it would cut the official cash rate by 25 basis points, two of the majors have announced they will pass on the full rate cut to borrowers.
In an announcement on its Twitter feed, National Australia Bank said it would cut its standard variable rate by 25 basis points. CBA has also just announced that they are passing on the full 0.25% reduction. The rate cut takes NAB’s SVR to 6.13 percent and CBA’s to 6.15 percent. More are expected to follow.
This is the first time in a long time that any of the majors have chosen to pass on the RBA’s rate cut in full.
Contact Us now at The Hrkac Group Finance Broker team to review your business and personal loans and ensure you are benefiting from the low official cash rate.
Whether you are buying your first house or your fifth house, your dream home or investment property for future financial security, our in house Geelong Conveyancer is here to help every step of the way with advice and efficient and friendly service… always going that extra step to make sure things run smoothly.
As a full-service office, our conveyancing services now extend to cover business sales and purchases as our licensed conveyancer has the qualifications and experience to assist in those areas of conveyancing also.
Advice regarding government grants and concessions is also available and our in-house Geelong finance department completes the full gamut of services needed to make your next purchase or sale a stress-free one…
