Q: What is transfer duty and how is it calculated?
A: Transfer duty, also referred to as stamp duty, is a single payment to the state government , be it a tax on property transactions. The amount varies depending on the state and the specific buyer’s circumstances, such as whether they are a first-time homebuyer, or an otherwise home buyer. Refer to each states websites below:
NSW | QLD | VIC | SA | TAS | WA | ACT
Q: What is the cooling-off period for residential property purchases?
A: In Australia, residential property purchase contracts typically include a 5-business-day cooling-off period, however it does vary depending upon the state of transaction. This period allows the buyer to change their mind and cancel the contract, though some exemptions apply.
Q: What is the settlement period and how long does it take?
A: The settlement period is the process of transferring the residential property ownership from the seller to the buyer. It typically ranges from 30 to 90 days, as specified in the contract of sale.
Q: What is PEXA and how does it help in residential property transactions?
A: PEXA (Property Exchange Australia) is an electronic conveyancing service that enhances the property settlement process by enabling professionals to communicate and submit transfer documents electronically, thereby increasing efficiency.
Q: When does the residential property become the buyer’s responsibility for insurance purposes?
A: The responsibility for the residential property transfers to the buyer at 5:00 pm on the first business day after the contract date. This means that any risks associated with the property, such as damage or loss, are now borne by the buyer. However, it is at the buyer’s sole discretion to decide when to take on this responsibility and ensure they have adequate insurance coverage in place from this point forward.
Q: What details should be included in the residential property contract?
A: A residential property contract should include the full names and contact details of the buyer and seller, a detailed description of the property (including lot, plan, and title reference), the purchase price, deposit details, and the settlement date. It should also outline any existing encumbrances, conditions of sale (such as finance approval or building and pest inspections), inclusions and exclusions, special conditions, and information about the cooling-off period, if applicable. Additionally, it should contain the signatures of both parties, contact details for their legal representatives, and specify when the property becomes the buyer’s responsibility
Q: How do I pay the deposit for a residential property purchase?
A: The initial deposit should be paid within two business days of the contract date, into the nominated account.
Q: What is the difference between buying a residential property through auction or private treaty?
A: Auction:
- Process: Buyers bid competitively at a specified time and location.
- Contract: The highest bidder signs an unconditional contract immediately after the auction.
- Cooling-Off Period: No cooling-off period; the sale is final and binding.
- Price: The final price is determined by the highest bid, which may exceed the expected value due to competitive bidding.
- Transparency: The bidding process is transparent, and buyers can see what others are offering.
Private Treaty:
- Process: Buyers negotiate a sale price with the seller or through a real estate agent.
- Contract: The contract includes terms and conditions agreed upon by both parties.
- Cooling-Off Period: Typically, a five-business-day cooling-off period applies, allowing the buyer to withdraw from the contract under certain conditions.
- Price: The price is negotiated and agreed upon by the buyer and seller, often allowing for more flexibility.
- Privacy: The negotiation process is private, and other buyers do not know what offers have been made.
Q: What are the different types of residential property sales processes in Australia?
A: In Australia, residential property can be sold through four main types of sales processes: Private Treaty, where the seller sets a price and negotiates offers with potential buyers, typically including a cooling-off period;
Auction, where buyers bid competitively, with the highest bidder signing an unconditional contract immediately and no cooling-off period;
Tender, where buyers submit confidential written offers by a specified deadline, and the seller selects the most favourable one, generally with no cooling-off period; and
Expression of Interest (EOI), where buyers submit offers by a specified date, allowing for some negotiation before finalising the sale, which may include a cooling-off period.
Q: How can I conduct due diligence when buying a residential property?
A: Buyers can conduct due diligence by researching residential properties online, consulting with a real estate agent, research online, obtaining relevant reports, and negotiating any necessary amendments to the contract before bidding or agreeing on a sale price. Arrange for professional building and pest inspections to identify any structural issues, pests, or other potential problems.