Information For Buyers

Building & Pest Inspections

If the Contract is subject to Building & Pest Inspections, you must take all reasonable steps to obtain at least one of the reports.

You must arrange these reports – we cannot do that for you.

As we are not builders, or pest inspectors, we cannot provide you with advice on the contents of the reports. You should direct any questions in relation to the reports to your inspector.

You must obtain written reports from a licenced inspector otherwise you may not be able to terminate the Contract on the grounds that you are not satisfied with the results of the inspections.

House and Land Contract

The report should relate to the land, but also the chattels and improvements including, but not limited to, all buildings and structures, sewerage and waste water treatment facilities, hot water systems, air conditioning systems and retaining walls.

Community Titles Scheme (Unit)

The report should relate to the lot itself as well as all fixed improvements to the lot.

We must notify the Seller by 5pm on the Due Date as to whether or not you:

  • are satisfied with the results of the Building & Pest Inspections;
  • are not satisfied with the results and request the Seller reduce the Purchase price or repair the issues;
  • are not satisfied and terminate the Contract; or
  • require additional time (an extension).

You must act reasonably in your decision to terminate the Contract.

The Seller is entitled to receive a copy of the reports.

Reduction of Purchase Price/Repairs to the Property

You do not have a right to a reduction of the Purchase Price or to have repairs completed by the Seller.

Of course, if the Seller agrees, you may renegotiate. Please ensure that you advise us of any negotiations so that we can ensure that they are reflected in the Contract accordingly.

Buying and Selling at the same time

If you are buying and selling at the same time (simultaneously), a special condition should be inserted into your purchase contract (prior to signing) so your purchase is conditional on your sale settling. If funds are being used from the sale to facilitate the purchase, the two settlements can be conducted on the same day, with the funds from the sale being used for the purchase.

Failure to include this Special Condition may mean that you must proceed with your purchase without your sale contract settling, which may not be financially possible without the proceeds of your sale.

Please contact us to discuss your specific requirements before entering into a contract.

Contract Price

We cannot provide advice or tell you whether you are paying too much for a Property.

Should you require a valuation, please contact us before signing the Contract so that we may provide you with a Special Condition.

Cooling Off Period

Most Contracts are subject to a 5 Business Date Cooling Off Period. This means that you may, for any reason within the 5 business days, terminate the Contract.

If you decide to terminate the Contract within the Cooling Off Period, the Seller is entitled to retain a penalty of 0.25% of the Purchase Price from the Deposit paid.

You should contact us immediately if you are contemplating terminating the Contract during the Cooling Off Period.

Default Interest

If for any reason you are unable to settle on the contracted settlement date, the Seller is entitled to charge you default interest. The interest accrues at either:

  • the rate noted in the Contract; or
  • the Contract rate fixed by the Queensland Law Society (Interest Rates).
Deposit

Payment of the Deposit is a sign of your intention to proceed with the Contract.

A Deposit must not be more than 10% of the Purchase Price and can be considerably less, you can negotiate the deposit with the real estate agent during contract negotiations.

An Initial Deposit is paid when you sign the Contract and a Balance Deposit may be payable once the Contract becomes unconditional, again this depends on the terms of the contract you have negotiated. The balance of the two sums must not exceed the 10% deposit on a standard REIQ contract.

If you do not pay any part of the Deposit by the Due Date you are in breach of the Contract and the Seller may be able to terminate the Contract.

The Seller may then be able to keep any part of the Deposit that you have paid and recover any part of the Deposit yet to be paid.

If you are in breach, the Seller may be entitled to claim compensation from you.

The Deposit is usually held in the Agent’s Trust Account, and where there is no agent, the Seller’s Solicitor would usually hold the Deposit in their Trust Account.

It is our advice that you never pay any money directly to the Seller. If at any time the Seller requests that you make any payment to them directly, you should contact us immediately.

If the Deposit is not held in a Trust Account and the Seller or Deposit Holder become insolvent, you may lose your Deposit and be unable to recover it.

If you terminate the Contract because you are unable to obtain finance, or are not satisfied with the Building & Pest Inspections, the full Deposit will be returned to you (provided you have not breached any other term of the Contract).

It is also our advice that you do not agree to releasing any part of the Deposit to the Seller prior to Settlement.

Due Diligence

In Queensland, the onus is on the buyer to obtain searches and to read, understand, and make decisions based on those searches as to the soundness of the investment.

There is no obligation on the Seller to tell you about the Property or any of its defects or other issues, except for limited contractual warranties and statutory disclosure.

Common practice is that contracts are usually signed first, and searches are conducted afterwards. This often leads to problems as issues in search results may not be identified in sufficient time for you to exercise any remedy against the Seller.

Our advice is that you do not sign a Contract without a Due Diligence condition.

Where a Contract has already been signed there is generally no opportunity to add special conditions. In some circumstances it may be possible to negotiate amendments to the Contract whilst it is still conditional but we do not recommend that you rely upon that being an available option.

Finance

You must take all reasonable steps to obtain finance approval.

We cannot make an application for finance for you – you must make contact with your preferred bank or broker.

When you have received unconditional finance approval in writing, you should send us a copy of that letter.

We must notify the Seller by 5pm on the finance due date as to whether or not you:

  • have received finance approval;
  • have not been able to obtain finance approval; or
  • require more time.

You must be certain that you want to proceed because once we notify the Seller that you have obtained finance approval, it cannot be withdrawn.

Most financial institutions will reserve their rights to withdraw the finance approval at any time prior to settlement for any number of reasons.

You must carefully consider any conditions attached to the approval before instructing us to notify the Seller.

If you do not have sufficient funds to pay the balance purchase price at settlement, the Seller may terminate the Contract or seek an order from the Court to complete the Contract. In both circumstances, the Seller may seek compensation from you.

Fraud, Identity Theft and Hacking

In recent times, there has been an increase in the number of attempted frauds relating to real estate.

It is essential throughout the process that you provide us with a range of private information.

Much of that information can be obtained by fraudsters and identity thieves from publicly available records or by hacking, phishing or trolling through unsecure email transmissions.

Parties to a conveyance are commonly targeted as the nature of the transaction means there is often a requirement to transfer large sums of money.

We will take steps, such as obtaining personal identification from you, to minimise the risk of fraud.

We will ask you to either:

1. Attend at an Australia Post outlet to complete your verification of identity; or
2. Complete your verification of identity online, by way of a secure link through a text message; or
3. Another means which we will discuss with you at the time.

For more information on how the Australia Post Verification of Identity process works, please refer to the following links:

We recommend that you also take steps to minimise the risk that your personal information is fraudulently obtained by being cautious about all communication. This could include:

  • double checking all money transfer requests whether from us, the real estate agent or your financier, despite how legitimate the request may appear;
  • do not transfer any money to any account other than to our trust account without first checking with us, by telephone, that the transaction is necessary; and
  • avoid sending personal and sensitive information via email.
Insurance

The Contract provides that the Property is at your risk from 5pm on the first business day after the Contract Date.

Despite this, the Seller has an obligation until settlement to take reasonable care of the Property.

We recommend that you contact your insurer and arrange for insurance over the Property once you sign the Contract, or once you receive a copy of the fully signed Contract from the Agent.

House

You should arrange cover for building, contents and public liability.

Unit

The Body Corporate usually insures the building and public liability outside the lot.

You should check the Disclosure Statement to confirm what insurances the Body Corporate have taken out. We suggest, as a minimum, that you take out insurance cover for the contents of the lot, including carpets, curtains and blinds etc, and public liability for the interior of the lot. In some circumstances, you may be required to also insure the building.

If you are obtaining finance, it will be necessary for you to note the financier on the insurance policy. Your financier will also request a copy of the policy.

Pre-Settlement Inspection

You are entitled to attend the property prior to settlement for the purposes of a ‘pre-settlement inspection’.

This inspection allows you to check that the Seller has removed their belongings, that no fixtures have been removed and no damage has been caused to the Property prior to settlement.

You should contact the Agent to arrange the inspection.

Even if you are purchasing vacant land, you should ensure that you attend a pre-settlement inspection to ensure that no earthworks or construction have taken place and that no rubbish has been dumped at the Property.

You should tell us immediately if the Seller has made any changes to the Property or left any of their belongings.

Searches

The standard searches we recommend are essential and should be conducted as soon as possible after signing. We make this recommendation as:

  • it might be possible to identify unsatisfactory search results before the Contract becomes unconditional; and
  • if we are able to obtain search results early, we can give you advice on any contractual or other rights or obligations you may have.

We consider the following searches to be standard and required:

  • Title Search (ordered at the commencement of the Contract)
  • Plan
  • Land Tax Clearance Certificate
  • Rates Search
  • Special Water Meter Reading
  • Title Search (ordered on the morning of Settlement)
  • Body Corporate Information Certificate (only required for the purchase of a unit)
  • Company Search (only required if either the Seller or Buyer are a Company)
Settlement Funds – Shortfall

If your financier is not providing all funds required to settle, you are responsible for providing the shortfall. This can be done by:

  • transferring the shortfall into our trust account; or
  • if you already have a bank account open with the bank providing your finance, transferring the shortfall to that account and providing your financier with authority to draw from that account (authority is usually included with your loan documentation).

When transferring funds into our trust account, we ask that you attend your branch and request a ‘telegraphic transfer’ or ‘RTGS – Real Time Gross Settlement’. Using this method ensures the funds are immediately ‘cleared’ when they arrive in our trust account. If funds are not cleared in our trust account on the day of settlement, settlement will not be able to proceed.

Tenancy

Joint Tenancy ownership means that on the death of one owner, their share in the Property passes to the surviving owner, despite any provisions in the Will.

Tenants in Common means that on the death of one owner, their share in the Property is dealt with in accordance with their Will, or the laws of intestacy if they do not have a Will.

Joint Tenancy is not appropriate where parties wish to hold interest in the Property in unequal shares (for FIRB, taxation or asset protection reasons).

You will need to advise us how the Property will be held, and we urge you to obtain advice and consider the impact on matters such as your succession plans.

 If you need any assistance contact one of our lawyers at hello@savvylaw.com.au or call 07 3733 1541 for a no-obligation discussion and for expert legal advice.