Buying Property – what you need to know
Before you sign the Contract, it is important that you discuss with the Real Estate Agent when payment of the deposit can be made by you. This date must be reflected in the Contract.
Once you have signed a Contract to purchase a property, it is important that you make arrangements to have any conditions satisfied by the due dates.
Have you paid your deposit?
The initial deposit will most likely be due when you sign the Contract. If there is a Real Estate Agent involved, it is generally payable to their Trust Account to be held on trust pending settlement. It is important that you pay the deposit by the date stated in the Contract. You will be in breach if it is not paid by the due date.
Have you taken out insurance?
It is important to arrange for insurance over the property as soon as the Contract is fully signed. The date on which the Contract is fully signed is called the Contract date. Many buyers are unaware that the property becomes at their risk from 5:00pm on the first business day after the Contract date.
Is the Contract subject to Finance and a Building and/or Pest Inspection?
Most Contracts for the purchase of residential property will be subject to standard Finance and Building and Pest inspection clauses. Generally these clauses will be due for satisfaction within 14-21 days from the Contract date, unless negotiated otherwise.
You need to make sure that you will be able to satisfy these conditions by the due dates. You will need to make arrangements to have the inspections carried out as soon as possible. Make sure you give yourself enough time to review the reports thoroughly and consider whether you are satisfied.
Completing the inspections as soon a possible also gives both parties an opportunity to negotiate any issues identified. It may be necessary to obtain repair quotes in order for the purchase to proceed.
A copy of the Contract should be provided to your bank or broker as soon as possible once the Contract is signed. Even if you have obtained “pre-approval” from your bank prior to making an offer. The signed Contract is required to finalise your finance application and issue unconditional approval. By making these arrangements when the Contract is signed, you can avoid having to request extensions from the seller or causing delays to settlement.
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