Finding the perfect home is not easy. It is normal to spend entire weeks running through your checklist of must-haves and nice-to-haves, scouring the suburbs, and going through seemingly all available properties in your area. The process can be so long that when you think you’ve found ‘the one,’ you might be ready to sign a contract on the spot!
However, it’s prudent to hit pause or slow down—you don’t want to rush into signing any contracts, and you must ensure that the conveyancing process goes smoothly. A contract of sale is legally binding, and if you don’t meet all the obligations it stipulates, you could find yourself facing penalties. Here are things to consider before you sign.
Ensure the Correctness of the Buying Entity
The first thing you should do is ensure that you have the correct buying entity on the contract. Buying the property as an individual means, you need to have your full legal name—your first, middle, and last name—on the contract. The full name is vital since this will be the name that will receive the legal ownership of the property you want to buy.
The buying entity also matters when you’re applying for bank financing. The bank will use your full legal name on the mortgage documentation, so the name on the contract should match. If not, you might encounter problems in the transfer. The same applies if the purchasing entity is a company—you must use the full, correct company name and include its ACN on the contract.
Does the Contract List Standard Conditions?
In Queensland, standard contracts will either be an ADLForms or REIQ contract. Both of these must contain details on two essential conditions. The first is the pest and building condition, and the second is the finance condition. For these to apply, you must correctly fill out the contract before signing.
It is vital to ensure that the contract specifies a date for the pest and building condition. You need enough time to arrange for the inspection, receive the inspector’s report, and review it. If the inspector identifies issues, your conveyancing solicitor will have to negotiate these with the seller’s solicitor, so you should factor in time for these as well.
The standard condition of finance is also essential. You cannot complete the purchase without obtaining the funds for settlement with the seller in most cases. Bank would typically require 14 days from the contract date to arrange unconditional finance approval, even if you have pre-approval for a loan. They will have to arrange for property valuation, which could cause even more delays. Allowing for a 21-day finance date should be enough.
Also, consider if enough time remains from the finance approval until the settlement date. Your solicitor will need to carry out property searches when you get the unconditional approval and provide results before the settlement. Required searches can take up to 14 days before they can be returned. To avoid issues with the settlement deadline, your solicitor might need to undertake searches before the contract goes unconditional. It means that if you do not receive finance approval and have to terminate the contract, you will still be liable to pay your solicitor for the cost of property searches.
Does the Contract Have Special Conditions?
Another aspect of conveyancing your solicitor can help with is drafting special conditions for the contract and arranging for their insertion before the signing. Besides the basic clauses, a special condition might be that your solicitor will undertake additional searches. You might also include that you’re buying the house subject to your existing property’s sale. You would need a solicitor to draft these conditions to ensure that they are correct and suitable to your needs.
Contracts require thoroughness and detail-oriented thinking. If you are purchasing property, you must get all the conditions right to facilitate a smooth transfer of ownership. With an expert conveyancer, you will get through the process as quickly and efficiently as possible.
Contact Springfield Legals for conveyancing in Ipswich. Whether you’re selling or buying a home in Springfield, Ipswich, or Brisbane, we can help—our solicitors can guide you through all the stages of transferring property ownership and ensure that you enter into a purchase with full knowledge of your legal rights and responsibilities. Call us today for enquiries!