1. Compare asking prices.
Check
out the prices of homes within a suburb andbetween neighbouring
suburbs. You may find
significant differences in property
prices within
2 km radius or even less. When visiting homes
for sale it is a good idea
to make some written notes during the inspection
and comparethem at a
later stage.
2. Do your research.
Seek out information
about recent sales in the local area so you can compare
the selling prices. For a fee, you can check the actual
selling price of homes
over a period of time through information supplied
by
the Department of Land Information, www.landgate.wa.gov.au.
3. Pre-approved finance.
Talk to a mortgage
broker, bank or direct lenderabout getting pre-approved
finance for your home loan. A home buyer is
in much a stronger negotiating
position if they have finance approval when
making an offer.
Knowing how much you can spend will also
narrow your search.
Methods of Sale - Who is selling the home?
More and more owners are selling without a real estate agent
these days. Some go it alone with kits they have purchased,
others, like ANREPS clients, have professional support from
a licensed real estate agency, which provides assistance to
them and their buyers. If you are a first home buyer, you
may not realise at first glance whether the home is being
sold by an agent or by the owner or how the paperwork will
be completed so, here is a brief overview.
Private Sale
A private sale is a sale by the owner where no real estate
agent is involved. Negotiations take place directly between
seller and buyer. Drafting the contract for sale is usually
arranged by the parties involved. Once the contract has
been signed it cannot be changed without the written agreement
of both seller and buyer. It is vital therefore that you
write on the original offer form all the conditions you
require to protect yourself. We recommend that you have
your legal representative check the contract before you
sign, click here.
Real Estate Agency
When a property is being sold by a real estate agent on
behalf of the owner, your offer will be written by the agent
who will present it to the owner for their consideration.
Your written offer must be signed by you before it is presented
to the owners. If the owners accept, you are legally bound
to proceed and the contract cannot be changed without the
written agreement of the seller. It is vital therefore that
you write on the original offer form all the conditions
you require to protect yourself before the agent takes it
to the seller.
If another real estate agent has been driving you around
showing properties to you, and you want to buy one of them,
your agent will write the offer and give it to the sellers’
agent. However, unless you are paying your agent a buyer’s
fee, he (or she) must work in the best interests of the
seller, not you, if he is receiving any payment from the
selling agent .
ANREPS
ANREPS facilitates owner sales. An important part of our
service is to provide guidance to our clients and their
buyers. Though you will discuss terms directly with the
owner, if you reach agreement on price and conditions, a
qualified real estate consultant will meet with you and
the seller to draft a safe legal contract according to your
instructions. If you make an offer to our client and you
require assistance, please contact us, there is no cost
involved for you as a buyer.
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Beware Buyer - Look After Yourself
No matter who is doing the selling, we advise you to check
all representations, verbal or written, (including property
brochures) made to you about the house, its fixtures and
fittings as well as any factors that may affect the land
itself.
Certificate of title
Always ask to see a recent copy of the Certificate of Title
to the property. On it are recorded the owners’ names
and important details such as the lot number, which identifies
the land, and encumbrances that may affect how you can use
the land in the future.
Access
Find out if there is a right of way across the land or if
a third party has the right to use any part of the land;
e.g. there may be shared facilities for the use of a bore,
or a right of way for the Water Corporation to inspect drainage
or sewerage pipes. This is an encumbrance that may be registered
on the title as an Easement.
It is also advisable to check with the local council for
any unregistered easements or covenants that may affect
the property .
Sewerage connection
If you are unsure whether the property is connected to the
main sewer or septic tank, the Water Corporation will advise
you. Telephone 13 13 95.
Before you sign a contract, ask the sellers, or their agent,
if a notice has been issued requiring the land to be connected
to the main sewer. Read the clause relating to SEWERAGE
CONNECTION in the Terms of Sale or Joint Form of General
Conditions that accompany the contract or offer document.
If you are buying a property with the intention to develop
the land you may purchase plans from the Water Corporation,
which show the position of the main sewer and pipes connecting
it to the main building.
Building or developing?
Telstra provides a great service "Dial Before You Dig"
which gives access to plans/information for underground
pipes and cables including Water Corporation pipes, Alinta
Gas, Western Power and Telstra. Visit the website www.dialbeforeyoudig.com.au.
To obtain the information:-
• Contact the Dial Before You Dig Service - phone
1100
• Fax a completed Request Form through on 1300 652
077
• Submit a Request Online
Septic Tanks
When the property is connected to the main sewer but was
previously on septic tank, health regulations imposed in
1998 require that the tank be decommissioned within 60 days
of a change in ownership. Be aware that the owner may not
know if there are disused septic tanks on the property.
Further information can be obtained from the local Council.
Owner Builders & Extensions
If the property was built by an owner builder within the
last 7 years, or if there have been extensions or alterations
since 1997 that required a building licence and cost in
excess of $12,000, make sure that home indemnity insurance
is in place to protect you against loss from faulty workmanship.
Owner builders selling within 3 years must have approval
from the Builders’ Registration Board before they
can sell.
Main Roads
Call the Local Council as well as the Main Roads department
for advice on proposed developments which may affect traffic
flows in the area. A Clause 42 Certificate, available from
the Ministry of Planning, will provide details of public
works that may affect the property you wish to buy. The
cost is approximately $25.
Zoning & Infrastructure
The City Council planning department will confirm zoning
and help you to determine the sub-division potential of
the land and possible benefits from new infrastructure developments.
For example, the opening of new railway stations and bus
routes should boost property values in the immediate surrounding
areas.
Strata Titled Disclosure Documents
Before you enter into a contract to purchase a strata titled
property, the seller should provide you with compulsory
disclosure documents. These comprise a completed and signed
Form 28 with attachments including copies of all by-laws,
Form 29 (information about buying and selling strata titled
property) a copy of the Strata/Survey Strata Plan and Certificate
of Title. We recommend that you obtain minutes of the Annual
General Meeting and financial statements of the Strata Company.
The appropriate documents must be provided whether the property
is a duplex with no common property or an apartment in a
large block with substantial common areas. If you want to
keep a pet, the Strata Company will advise whether or not
you will be permitted to do so.
New Subdivisions, units and duplexes
It is not uncommon for sellers to market land they are subdividing
before the titles have been issued. It is quite legal to
do this but as a buyer you need to be aware that this process
can take quite some time, possibly months. Settlement cannot
occur until the title is issued. Any offer must be made
subject to the strata title being in order for dealing with
settlement to occur 14 days afterwards. Extensive delays
may result in a requirement for payment of stamp duty and
we recommend that you get advice from your settlement agent
or solicitor before proceeding with the purchase.
Fences
One of the most common problems is caused by disputes over
dividing fences. Verify that there are no outstanding debts
or disputes with neighbours over fences or other shared
property.
Reticulation & Electrical
Ask if you may see electrical equipment working. If there
is a bore, check there is a pump beneath the cover and that
water pressure is adequate. Ask also if there is any agreement
with neighbours for sharing the use of the bore; if there
are limitations on time for usage and what arrangements
there are for access to it.
(If the property is zoned rural, find out if there are any
restrictions on the amount of ground water which may be
pumped out in any given time period.)
Check all electrical fittings are in good working order.
If the house is old and has not been rewired, or if it was
built before 1960, a pre-purchase inspection report (electrical
wiring) is advisable .
Structure & Swimming pools
A pre-purchase building and home inspection report from
a registered builder will reassure you that the property
is structurally sound or reveal serious faults. Many builders
also pinpoint areas which are likely to need attention in
the near future. The condition on the contract should protect
you from buying a house which is structurally unsound but
the owners will not necessarily be required to renovate
every item that shows signs of wear and tear.
If the home has a swimming pool make sure that the installation
has been approved by the local council and that it complies
with the council’s safety requirements .
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Naming buyers on the Contract
If you are buying with another person try to have everyone
present when you write the contract. If this is not possible
or if you are unsure whether to buy in your name or in joint
names with your partner or spouse, we recommend you seek
legal advice to word the contract correctly. Your financial
adviser or accountant may also be able to advise whose names
the property should be registered. If you change your mind
after the contract has been forwarded to the settlement
agent you will not be able to simply add or delete a name.
Joint tenants or tenants in common
If you are buying with another person you must decide how
you want to register your ownership of the property. This
will be either as joint tenants or tenants in common. Here’s
what they mean:
If you buy property as joint tenants, it will belong equally
to the parties registered on the title. One may not sell
without the consent of the other. In the event of the death
of one party, the surviving partner becomes the sole owner.
Married couples usually buy as joint tenants.
Two or more parties may purchase property as tenants in
common. They contribute separately whatever percentage of
the purchase price they wish e.g. 50/50; 70/30. At a later
date, one party may sell his or her share to the other,
or to a third party if he/she wishes. In the event of the
death of one party the share passes to the beneficiary of
the deceased estate .
Stamp Duty
Stamp Duty is payable on the
full purchase price for the property. There are no exemptions
from stamp duty with regard to any items, whether fixed
or movable, that will be left with the property at settlement.
Items that stay with the property
Here is a list of fixtures and fittings that are usually
included in the sale. You may want to list some of them
on the contract:-
• Fixed floor coverings (i.e. fitted carpets, Vino
lay, parquet flooring etc.
• Light fittings (including globes)
• Stoves, hotplates, all ovens & range hoods
• Dishwashers that are plumbed in (not portable)
• Air-conditioning, heater units and other plant or
equipment which is built-in or
is permanently connected
to the gas, electricity or water supply
(e.g. Hot water system, reticulation
system, pool filters etc).
• Furniture - built in
• Garden sheds fixed to a concrete base
• T/V aerial (fixed)
• Clothes line or hoist
• Window treatments, curtains, blinds, security screens,
fly screens etc.
If there are movable items, such as pool cleaning equipment,
that you would like the owner to leave behind, then you
should negotiate separately for them.
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Who should the offer be made to?
When buying privately, make your verbal or written offer
direct to the owner. If you are buying from an ANREPS client,
you may use the Expression of Interest form in the property
brochure to make your initial offer to the owner. Call our
office on 9450 3398 for assistance if required.
Owners using our SuperSell option have engaged us to negotiate
on their behalf. Just call the consultant whose name is
on the property brochure or our office. If a real estate
agent is selling the property, your offer will be made through
the agent.
How will the paperwork be done?
A qualified consultant will be available to draft a safe
legal contract on terms agreed between you and the seller.
Our offices in Como are available to you for this purpose
or any other mutually convenient location.
Will a deposit be required?
You will almost certainly be asked to place a deposit. The
more substantial the deposit the more confidence the owners
will have in your offer and your commitment to purchase
the property. However the contract will still be legal and
binding on you without a deposit. If you do not intend to
place a deposit at all, discuss this with the sellers to
see if they are still willing to accept your offer.
How much deposit should be paid?
An amount up to 10% of the purchase price is usual. If you
don’t have 10% available, pay as much as you can.
There is no fixed amount. If the sale falls through and
it’s not your fault, the deposit will be returned
to you.
Who will hold the deposit?
The sellers’ settlement agent or solicitor will hold
the deposit in trust until settlement day. Cheques should
be made payable to the settlement agent’s trust account
and forwarded direct to their offices:- Note: To have your
deposit placed in an interest bearing account, the amount
must be a minimum of $20,000 OR be held for a minimum of
60 days and you must submit your request in writing.
Counter Offers
The seller may want to change the purchase price or some
of the conditions on your written offer. This is usually
done by striking out the original entry then inserting and
initialling the changes. You are not bound to accept changes
the seller makes and you may withdraw your offer at this
stage or re-negotiate. When buying privately we recommend
that you discuss terms verbally with the owner before entering
into a written agreement.
Terms of Sale (General Conditions)
These are general conditions that apply to you and the sellers.
They will be given to you in the form of a separate booklet.
If the Offer & Acceptance form is the standard REIWA
document you should receive the appropriate Joint Form of
General Conditions. ANREPS provides ‘Terms of Sale’
a document that addresses the same issues. These conditions
are an integral part of the contract. You should read them
so that you know your obligations and the consequences if
you or the sellers default on the contract. If you do not
understand them ask your legal representative for advice.
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If you require a termite or building inspection or have
any concerns about the property that you want to check,
you must include the appropriate special condition with
the contract.
A list of the most common special conditions is shown
below. It is vital to have specific wording for these conditions
so that everyone is clear about what has to happen, when
the condition must be satisfied and what the outcome will
be in the event that there are problems. Consult your solicitor
or legal representative to have these conditions worded
for you. ANREPS has pre-prepared conditions available, worded
by solicitors Irdi Legal. These are free to buyers of ANREPS
client properties. Sets of conditions are available for
purchase for a small cost, if required.
Do not sign a contract
until you have included all the conditions you need.
Do not make an unconditional cash offer unless you are
sure you will have the funds available on settlement day.
Seek further advice if you are not sure how to proceed.
List of commonly used conditions (Headings only)
• White ant clearance certificate or Timber Pest report
• Subject to sale of purchaser's property (use this
condition if you need to sell your own
property first)
• Subject to settlement of purchaser's property (when
your property is sold but not settled)
• Plant and Equipment (fixtures and fittings to be
in good working order at settlement)
• Structural soundness (building inspection report)
• Electrical wiring (inspection by electrical contractor)
• Swimming pool (council approval, structural report)
• Sewerage connection (acknowledgment of imminent
connection)
• Do not word these conditions yourself without seeking
legal advice.
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• The contract - the original Contract must be sent
to the buyers settlement agent or
solicitor immediately.
• Deposit - forward your deposit to the sellers’
settlement agent or solicitor by the due date.
• Finance - Make your application for finance right
away. You must have unconditional
written approval from
your lending authority by the date entered on the contract.
Your lending institution will require a copy of the contract.
Do not give the original contract
to your loans officer or broker.
As soon as finance is approved, inform the sellers and
send a copy of the written approval to the sellers’
settlement agent. Stay in close touch with your lending
authority to make sure that your unconditional offer of
finance will be available by the date entered on the contract.
• Special Conditions - fulfil your
obligations by having any checks of the property carried
out by the date stipulated on the relevant special condition.
Send copies of any written
reports to your settlement agent.
If you forget to arrange for these inspections you
may have
to waive your right to have them done.
• Transfer of land documents - these
documents will be sent to you before settlement.
It is important to sign and return them immediately
as the same document must
then be forwarded to the seller for their signatures.
• Stamp duty - must be paid prior
to settlement. You will be notified by your
settlement agent/solicitor
of the amount due.
• Keys - arrange to collect the keys
from the owners. Agents will usually deliver them
to you
once settlement is confirmed.
• Possession - if the property is
vacant you may take possession as soon as settlement
has
been effected. If the owners will be living in the home
right up to settlement day then,
under the terms of sale
they may be permitted to remain until noon the following
day.
If you are unsure, read the appropriate Terms of Sale.
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The purpose of the final inspection is often misunderstood.
Many buyers make the mistake of assuming that the final
inspection is their opportunity to inspect the property,
possibly with tradespeople, and make a list of repairs and
maintenance that they expect the sellers to carry out. There
are two kinds of final inspection:-
1. General maintenance inspection (where
no special condition has been added)
Under the Terms of Sale, buyers are offered the opportunity
to walk through the property, within 7 days prior to settlement,
to make sure that the property has been maintained to the
standard it was in at the time the offer to purchase was
made.
Example:
a. If an element on the electric hot plate was not working
at the time the contract
was written and is not working
at the final inspection, you will have no claim
against
the owner for repair of the element.
b. Gardens should be maintained in the same condition as
they were when
the contract was signed. If they have deteriorated
significantly the owner
should restore them to their previous
condition.
c. If a window has been broken since you signed the contract,
the seller should
repair it prior to settlement.
2.
Guarantee of plant and equipment (a
special condition added to the contract)
When a specific condition has been applied that requires
the seller to guarantee, or warrant, that all electrical,
mechanical or plumbing items will be in working order on
or before the settlement date, any item in these categories
that are not working on final inspection must be repaired
at the sellers’ expense, to the buyer’s reasonable
satisfaction, unless the buyer was made aware of the fault
at the time the contract was written and acknowledged it
on the contract.
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Stamp duty
Calculated on the amount of the Purchase Price for the Property.
Your settlement agent will advise or, for information regarding
Stamp Duty call the Stamp Office on - 9262 1100. N.B. This
must be paid before settlement. Click
here for the calculator.
Transfer fee
This is a Titles Office charge for transferring the title
into your name.
Bank/Building Society
Loan establishment fees including stamp duty, for preparation
of mortgage documents. Enquire at your lending institution
for full details.
Mortgage insurance
You will be advised by your lending institution.
Shire and Water rates & Strata levies
These will be adjusted by your settlement agent. You will
be required to pay rates on a pro rata basis per days of
ownership calculated from settlement day or date of possession
whichever is earlier.
Land Tax
Applies only if the property is not your principal place
of residence. For information, call the State Revenue Department,
Land Tax - 9262 1200.
Settlement Fees
Many solicitors now use the same fee structure as settlement
agents and provide legal advice, when required, at no extra
cost. There is a separate fee for Seller and Buyer.
Settlement disbursements
Levied by all settlement agents in addition to the settlement
fee. Amounts vary according to the cost of searches, photocopying,
courier charges, postage and other out of pocket expenses.
Building report / Termite inspection
Charges vary—shop around.
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