Home Loans Comparison

The Process of Buying a Property

Once you have found the property that you would like to buy and agreed on the selling price, you must follow a process before you officially own the property. First, you must read the contract regarding the sale of the property and sign it if you totally agree with it. If there are provisions that you would like to question, you may clarify them first with the seller before signing the deal.

If you have signed the contract, you must exchange contracts with the seller. This is very important because the transfer of ownership will not proceed if the contract is not signed. The contract usually contain the address of the property, the names of the parties involved, the selling price, the provisions of the sale, special items included in the sale and the date of settlement.

Upon exchanging contracts with the seller, you might be obliged to pay the deposit. It is also advised that you have legal representation throughout the transfer of ownership. While the contract is done by the solicitor of the seller, your legal representative must thoroughly read it to make sure that heritage, title and zoning restrictions do not contradict your reason for buying the property.

The legal representative can also identify if the seller has the authority to sell the property and if the rates and taxes are already satisfied. He can also conduct property inspections before the contract signing and exchange of contracts.

After the exchange of contracts, there will be a cooling off period if you have bought the property through private sale. You can cancel the contract during the cooling off period but the seller might charge you an additional fee for the cancellation of the contract. The length of the cooling off period varies from state to state and properties bought through auctions do not have this period.

Usually, there is a six-week period between the exchange of contracts and the settlement. However, the length of the time in between can change depending on what you have agreed upon with the seller. During the settlement period it is advised that you ensure that your home loan is in order.

If you will finance the balance of the property through a loan, the lender will arrange property valuation and require you to have building insurance since the exchange of contracts unless you are buying a strata property.

During the settlement, the property price balance is paid and the title deeds and keys to the property are handed out. If you will pay the balance through a home loan, your lender will receive the transfer documents and the title deed. Then, the lender will transfer the amount that you have borrowed to the seller.