How to Time Your Property Settlements Well When Buying and Selling

When you’re looking to move to a new property, the usual dilemma is whether to sell your current home first before buying a new one, or vice versa. Both options come with their pros and cons, and are each risky in their own right.

However there is a third option, for those who want to get the best of both worlds while minimising the costs: do both processes simultaneously.

How do you time your settlements in such a way so that they don’t overlap and leave you at a disadvantage as either vendor or buyer? Here’s the ideal way to go forward:

1. Keep tabs on the market

   Watch the trends and make your move to sell when demand is picking up and prices are jumping. This allows you to maximise the value of your property. Then if possible, consider buying into a market where competition is less robust, allowing you to snag a nice home at a lower price. Doing your research well is the key to this secret! Of course, you can only wait for so long between settlements without complicating your living situation, so you need to keep up with your due diligence and connect regularly with local real estate agents.

2. Extend your settlement date

   Both parties generally negotiate over the date of settlement in the contract of sale. To give yourself adequate time to find a new home, you can suggest a long settlement period of up to several months. If suitable, you can also ask your conveyancer to include a clause that allows you to bring the settlement date forward (provided you give your buyer a few weeks’ notice). This would make it parallel to the settlement date of your new property,

3. Put in a conditional offer

   This type of offer calls for the purchase of a new property to be contingent on the sale of the old one. You simply ask your conveyancer to include a clause in the contract that makes the purchase “subject to” the sale of your property. This gives you leeway to get your current home off the market while ‘reserving’ your next property. The risk here is that some vendors may not be willing to accept conditional offers, given the lack of certainty attached to them. As an alternative, you could apply for a bridging loan, which allows you to “own” two properties simultaneously. This loan provides you with funding for a new place while you wait for your old home to sell, though the interest rates are generally quite high.

Timing your settlements to fall simultaneously when buying and selling property can be a tricky business, but it’s not altogether impossible. At Think Conveyancing we’ve worked on some challenging transactions and worked with our clients to meet conflicting and chaotic deadlines: it’s all part of the process of conveyancing. We’re always on hand to help you with the legal process of buying and selling property, so if you’d like to speak with a member of our friendly team for an obligation-free chat, contact us today on 1300 932 738 or request a free quote online.

Settlement Delays: Know Your Rights

When you’ve found what you’ve been looking for in a home or investment property, you can’t wait to make it officially yours. After the time and effort of getting finance and processing the transaction, the exciting time arrives to settle.

But what happens when the vendor makes a move to put off that final moment of parting as settlement day arrives?

For a buyer who’s all but ready to move in, a settlement delay is stressful and troublesome, especially if it means your scheduled preparations will be impacted. If you’ve let your old home go, it may even mean you don’t have a residence for a time.

On the flip side, what if you’re the vendor who has found the seemingly ideal buyer… and they suddenly seem to be hesitating at the crucial moment? What can you do next?

1. You can demand interest
   As a Seller, if you decide that you can wait for the delay, you can get still compensated for it by requiring the payment of interest for each day the settlement drags on. This is known as penalty interest and can be specified as a condition in the contract of sale. Your conveyancer will advise you on how to charge this to the other party.
2. You can issue a Notice to Complete (only in certain States)
   This gives the other party an additional period (generally two full weeks or 14 days) to address any issues hindering the settlement. If he/she is still unable to meet the new date, then you are generally within your rights to terminate the contract and keep/recover the deposit made to secure the property.
3. You can take legal action
   While you can’t do this right off the bat, it is an option that is available should the situation worsen. After taking action as per points 1 and 2, if the settlement still does not happen within the agreed period due to delays from the other side, you can try to file a case to force the vendor/buyer to fulfil his/her contractual obligations in relation to the property. For further advice on your rights before taking this step, independent legal advice from a litigation lawyer is recommended.

Of course, you can ultimately choose to be gracious and be understanding if there is a valid reason for the delay and if it won’t take long. In this case, as a Seller, you may choose not to apply any penalties against the Buyer.

Nonetheless, such occurrences prove why it’s important to have a good conveyancer on hand to advise you on whether waiting on the delay is smart and if not, what options are open to you.
Conveyancing laws can vary across states, which is why it’s imperative that you hire someone in your local jurisdiction. And be sure to be organised yourself – procure and/or sign documents promptly to minimise the possibility of delay.

And remember, from a legal standpoint, it comes down to the contract that’s drawn up. Make sure it protects your interests, no matter which side of the transaction you’re on.

Engaging the services of an experienced and qualified conveyancer can help you ensure that your property transaction goes smoothly and that any delays are handled swiftly and professionally. For an obligation-free chat about your property needs, contact our friendly team at Think Conveyancing on 1300 932 738 or request a free quote online.

Summary:
Settlement delays →
Know your rights!
Step 1 > Notice to Complete

• Gives the other party 14 days to complete the settlement
• Otherwise, the contract can be terminated
• And you can keep/recover the deposit

Step 2 > Demand interest

• Penalty interest can be charged daily
• Compensation can be requested for losses incurred

Step 3 > Take legal action

• Notify the other party you are ready to settle
• Terminate the contract
• Sue for damages
• File a lawsuit to force the fulfilment of the contract

A good conveyancer on hand to give advice is essential
(Just make sure they’re in the state/territory where the property is located)

Should You Buy Now and Then Sell – or Does Selling Come First?

The only thing constant in life is change, the saying goes. Families grow, careers shift and at some point, you outgrow your home, marking the time to move on to a new property.

However, a question that will likely be at the back of your mind is whether or not you should let go of the old home first before you get to the new.

There are, after all, many things you need to address before you sell a house, and a lot of paperwork to deal with if you’re going to play the role of both vendor and buyer.

There are several pros and cons for selling your current property first before buying again:

Pros:

1. You can focus on adding value to your current property

   You generally can’t just sell your property as it is and still get a good price for it. There’s some renovation and improvement work in store in order to make your dwelling presentable to the eyes of potential buyers, and you need to allot both a budget and a chunk of time to making this happen. Handling the selling costs first also keeps your budget from getting distracted by the payments required for a new property, such as for third-party services and loans.

2. You have money in the bank

   Selling first adds a big amount to your bank account, and allows you to budget appropriately. Moreover, vendors will almost certainly be more willing to entertain a buyer who already has funding. You will also be able to negotiate more forcefully knowing that you have time and money on your side, especially if the vendor is looking to make a quick sale.

3. You may have some leeway on settlement dates

   By selling first, that doesn’t necessarily mean you have to move out quickly. Together with your conveyancer, you may be able to negotiate a clause in the contract that allows for a longer settlement or a rent-back period while you find your new home.

Cons:

1. You may not have a new home right away

   If you decide to buy after you sell, the market may not necessarily have what you want on short notice. This means you’ll be forced to take out a short-term rental until you find your dream home, adding an unexpected hit to your budget (not to mention a double-move).

2. Rising prices may become your enemy

   If you start your search during a boom period where dwelling values are soaring, you may end up having to pay a whole lot more for a good home. This is a big risk you’ll encounter especially if you have a rental period to ride out.

If you do decide to sell your house first, it’s recommended that you don’t take too long between the selling and buying processes. This way, you should still have a good idea of how the market is moving. Be sure to research and prepare the necessary documents early in the process, so you’re prepared to move immediately once you do find the right home.

At Think Conveyancing we’re always on hand to help you will the legal process of buying and selling property. For an obligation-free chat about your situation, contact our friendly team on 1300 932 738 or request a free quote online.

Why Signing an Unconditional Contract is Risky

The Australian property market can be quite competitive, especially in booming areas. When stock is low in the midst of high demand, buyers may become increasingly willing to make compromises to get their dream home.

One thing buyers can be tempted to turn to is an unconditional offer.

As its name implies, an unconditional contract contains no conditional clauses – meaning outside of a Buyer’s right under legislation, the Buyer must settle the property regardless of whether their finance is approved or not and whether the physical condition of the Property is acceptable or not., while a seller must proceed with the offer he/she chose to accept.

Such a contract must be followed as agreed upon by both parties and generally cannot be terminated half way through (unless exceptional circumstances arise). Unconditional contracts are typically observed at auctions, where bidders may be expected to sign such an agreement to take the home they won, regardless of its status.

The risks of entering into such contracts are high, especially when the Deposit amount requested by the Seller and agreed to by the Buyer is a large sum. As conveyancers, we see clients wrestle with some of the issues that can arise from these types of contracts, so here we highlight some of these risks:

1. Over and under valuation.

   A buyer may overvalue the property’s market worth in his/her haste to secure it, causing him/her to spend considerably more than they should. On the flip side, a vendor could undervalue his/her property, thereby losing out on profit.

   Prior to making or accepting an unconditional offer on a property, both buyer and seller must do proper research to determine its correct value. This can be done by hiring a licensed valuer – their reports differ from agent appraisals in the sense that they must base the valuation on quantifiable facts regarding the property.

2. Lack of a finance clause.

   This is an important consideration especially for buyers who need to borrow money to complete the purchase. There is always the risk that lenders often won’t approve a loan, but since the sale is not contingent on the buyer having the money to pay up, he/she may end up having to forfeit their Deposit.

   Thus, a buyer looking to make an unconditional offer should be satisfied that they will have the funds needed to settle the property, whether through his/her own savings or due to high confidence that a loan can be secured.

3. Lack of assurance regarding the property’s status.

   This is a big concern especially if the unconditional agreement is made where the buyer is unable to see the property properly for themselves. If the property happened to deteriorate in any way, such as pest infestations, the buyer must still finalise the purchase.

   To avoid this, a buyer should do their best to first conduct a thorough, due diligence investigation of the property prior to making an offer to ensure that the property is as represented by the vendor (fair wear and tear excepted).

An unconditional contract is sealed by the seller’s signature, so if a buyer has already made an unconditional offer and would like to back out, the only way to do so is if the vendor hasn’t signed a document yet or under cooling off (if applicable).

Overall, unconditional contracts present many risks. Before signing one, be sure to speak with a licenced, experienced conveyancer so you are fully aware of the pros and cons of this strategy before you sign on the dotted line.

At Think Conveyancing we’re always on hand to help you with the legal process of buying and selling property. For an obligation-free chat about your situation, contact our friendly team on 1300 932 738 or request a free quote online.

Why Does it Take a Mountain of Paperwork Just to Buy a House?

Buying a home is one of the most important decisions you will make. It’s representative of an adult standing on his or her own two feet. It represents freedom; a potential legacy; your home and sanctuary.

The process of looking for a house is very exciting, if occasionally challenging! It involves so much searching, bidding, budgeting and stress, but the moment you find that one space that is destined to be yours, it is positively exhilarating.

Then, with a great find comes great responsibility. And with great responsibility comes a great deal of paperwork.

Why is so much documentation necessary (causing you much stress as you rush around to collect and organise it all)? We break down the following reasons:

1. For bank loans

   Banks require a lot of verification in order to consider approving you for a home loan. This is because they need to protect themselves against financial risk by ensuring you can actually afford the loan.

   Typically, banks will ask you for proof of identification, recent proof of income, investment records, credit card statements, current residential status and details of the contract of sale if you’ve already entered an agreement.

   You will also be advised to take out insurance on the property purchased, which should be effective on the date the contract is signed by both parties. Even though the property may be covered by the vendor’s insurance up to the date of settlement, most lending institutions will generally require purchasers to take out building and contents insurance from the date the contract is signed in order to safeguard the lending institution’s interest as the lender.

2. For legal protection

   Presenting, signing and collecting documents can put a dampener on your excitement, but these documents are essential. They not only ensure the legal transfer, but they can protect your interests in the event of legal trouble encountered while settling the property.

   For instance, a contract of sale has the job of clarifying the conditions and inclusions made as part of the sale agreement. For instance: who owns the dryer that is bolted to the wall in the laundry? You can’t make assumptions about chattels, and the paperwork involved in managing this process can protect your interests. Other supporting documents like title search or a Certificate of Title are required as proof of ownership. Moves are being made by the government to digitise parts of this process – but for now, transacting these documents does churn through a lot of trees.

3. For government records

   Once you settle a property and walk away with the keys it is not the end of the process. When a property changes hands, the government needs to be made aware of the shift in ownership. It also legitimises the transactions and accords you the official rights of a property owner as recognized by the state.

   Thus, after settlement  a transfer of land document should be lodged for registration at the Land Titles office. You should also be ready with your contract of sale, duties forms and a notice of acquisition to facilitate duty assessment.

The processes of making an offer, reaching an agreement and settling are quite complicated, so engaging the services of an experienced and qualified conveyancer can help you ensure that the transaction goes smoothly. For an obligation-free discussion with our friendly team at Think Conveyancing, contact us on 1300 932 738 or request a free quote online.

Friends Versus Business: Do You Need a Conveyancer for a Private Property Sale?

The process of property buying and selling necessitates considerable legal work. This is where the need for licensed professional conveyancers comes in, especially when the people at the other end of the deal are people you don’t know.

What happens, however, when you are dealing with people you know?

When you’re selling to friends and family, hiring a conveyancer may feel unnecessary. After all, you’re transacting with people you know and trust, and it will potentially save time and money if you skip this step and do your own conveyancing.

You know the old saying, though; never mix business with pleasure. As conveyancers, we’ve seen plenty of transactions fall apart over the years and in many cases, the problems arise when emotions are in the mix.

Here, we outline some common considerations that you still need to keep in mind – even when your buyers or sellers are your loved ones:

1. You still need to meet all your legal obligations.

   Conveyancing, which can be a complex process, is guided by the laws of your state or territory. “You still need a conveyancer to prepare the contract of sale, a statutory disclosure statement (often referred to as ‘Form 1’) and the other documentation required by law for the sale to proceed,” explains the SA branch of the Australian Institute of Conveyancers (AIC). Managing this process on your own could see you overlook or skip essential steps in the process, which could result in delays or added expenses.

2. You need someone to help you remain impartial.

   When we’re dealing with people we know, we can sometimes be hesitant to act as forcefully as we normally would with an unknown third party. A conveyancer helps add some impartiality back into the deal, to ensure you don’t unwittingly agree to unfair terms or conditions, and gives you a legal grounding to fall back on if you wish to negotiate with the other party.

3. You need a check-and-balance.

   A conveyancer can play the highly important role of objectively checking through title transfer agreements made between yourself and your buyer, protecting your best interests in the process.

4. You need someone to help you see the selling process to the end.

   A property transaction, especially one that involves your home, doesn’t just end with a turnover of keys. You have to liaise with the bank regarding your mortgage, inform the government of a change to ownership in the property and calculate the necessary adjustments. A conveyancer can help you care of these details, and offer guidance and support on any areas you’re unsure of.

To save money, you and your friend or family member may consider hiring one conveyancer to act on behalf of both of you. There are some serious risks here – for instance, a conflict of interest is quite possible, since the conveyancer will have to juggle the best interests of two competing parties.

As a result, very few conveyancers are willing to agree to such arrangements, and those who do require the parties to sign release forms freeing the conveyancer of any liability.

Our recommendation? When it comes to mixing business with pleasure, do your best to keep the process as independent, straightforward and stress-free as possible. For the sake of a relatively small fee, you can engage a legal professional to act on your behalf and ensure your best interests are prioritised, every step of the way.

At Think Conveynacing, we’re always happy to help you with any aspect of your conveyancing requirements. For more information on what we do and how we could help you, please contact our friendly team on 1300 932 738. You can also contact us online here.

The Future is Now: How Technology is Making Property Transactions More Convenient

As the digital age continues to transform how we live, technology is progressively becoming integrated into everyday life. These days, hardly anyone can get by without a smartphone, the Internet and a home computer – and with such mod cons at our reach, it’s becoming more commonplace for transactions and business deals to take place online, too.

The property industry has not be immune from this advancement – in fact, it has enthusiastically kept up with the evolution of digitisation.

In the United States, the industry belief is that we’re headed towards seamless transactions: Rick Sharga, CMO of California real estate firm Ten-X, confirms: “The notion that people will be able to buy and sell properties wherever they are, whenever they want, using whatever computing device they feel like, is where the industry is going.”

Whether such a fast-paced state of play will be adopted in Australia remains to be seen!

That said, we are already seeing evidence of several ways in which technology is simplifying property transactions, for both buyers and sellers:

1. Real-estate apps

   Apps continue to make life easy for agents and vendors, compiling complicated services into handy, user-friendly packages. For instance, Australian depreciation experts Washington Brown have developed the Property Calculator app for iOS, which helps investors to calculate expected depreciation tax benefits. The BMT Tax app serves the same purpose for Android users. Buyers can also determine the best properties and suburbs to invest in through the Suburb Investor app, which utilises data from CoreLogic to provide information on value. And of course, a good browser app never hurts to get you access to the top real estate websites.

2. Social media

   One of the best places to list – and find – homes for sale these days is increasingly through social media platforms, such as Facebook and Instagram. Word spreads easily because postings can reach your friends, and their friends – and you never quite know who’s following along. Social media also enables a seller to show off photos and videos of the property on the market, and to even provide real-time updates on any work being done to enhance the property further.

3. Virtual reality

   Interested buyers are now able to view houses through their screens instead of having to personally visit the property. Video tours are one of the most popular ways to market real estate, especially those that utilise 3-D software, as they enable you to experience a home halfway across Australia. Photo editing software is getting more sophisticated, allowing virtual staging – where you can add decor and furnishings to listings photos – in order to give buyers a premium idea of how the house will look once lived in.

Behind the scenes, technology is enabling faster processing of paperwork and correspondence, which may soon translate to faster conveyancing and improved finance processing times, leading to quicker settlements.

However, whilst there are now a number of ways that the real estate industry is evolving and improving, nothing quite beats the personalised touch of one-on-one service. Whilst these apps and advances help to facilitate long-distance (and even global) interactions, buyers and sellers ultimately do business at a personal level, through phone calls, text messages and e-mail. At Think Conveyancing, we leverage the best of technology to make our operations as efficient as possible, while also keeping our focus on our customers. For an obligation-free chat about your situation and how we may be able to assist you, contact our friendly team at Think Conveyancing on 1300 932 738, or request a free quote online.