Buying your first home can be both exciting and intimidating. If you’ve made the decision to take the plunge and purchase your first property, you’re likely feeling a little overwhelmed by the entire process, including the abundance of Queensland property laws that apply. To help, we’ve created this comprehensive legal guide to buying your first home, which includes a handy checklist of questions to ask yourself before signing on the dotted line. We hope that our buying your first home tips — provided by seasoned veterans of conveyancing and real estate law — will help you avoid some of the common home buying mistakes that Queenslanders make and set you up for a happy life in your new home.
Buying A House In Queensland Checklist: Questions to Ask
Unless you’ve bought houses in QLD before, you’re probably unsure of the questions you need to ask — your lawyer, your financier, your real estate agent, and yourself — to ensure you make the right purchase decision and ensure it all proceeds smoothly. Here is our checklist of questions to ask when buying a house.
Have I had the contract reviewed by a legal professional?
Queensland property law is a unique form of law that raises special issues of practice and legal problems not present in other financial transactions. It is highly recommended you seek out a conveyancing lawyer with expertise in this area to help you navigate this complex form of law.
A conveyancing lawyer will be able to provide you with peace of mind, help you avoid vague or unclear terms in your purchase agreement, and negotiate on your behalf to make sure your contract is up to standard.
There is nothing stopping you from negotiating the terms of the contract through your real estate agent. However, it is important that you first get the contract reviewed by a lawyer before you sign, so that they can check that the commercial terms you have agreed on have made it into the contract. It is not unusual for the contract to be prepared incorrectly, which can lead to you thinking the contract is subject to a condition, such as finance, but from a strictly contractual perspective, this is not the case.
Normally, it is after the contract has been signed that they will also perform title searches on your behalf and prepare the necessary documents to finalise the sale. If you attempt to purchase a home without the advice and expertise of a lawyer well-versed in Queensland property law, your legal rights may be at risk and even your deposit could be forfeited.
What is my legal name?
Before you purchase a property, you need to decide on a suitable form of ownership (either your personal name (including joint ownership with another individual, a company, trust or self-managed super fund) that will be legally recognised by Queensland law. You should seek the advice of your accountant to determine what is the best entity to purchase the property in.
Whatever option you choose to take, it is important that the name is noted on the contract of sale. The Title of the Property will reflect the name on the contract, so it is imperative that this is correct from the outset. If it is not noted correctly on the contract, this could mean that you are not able to complete the contract, or could lead to additional costs being incurred to rectify this issue. the name that will appear on the title document of your property is recognised as legally valid. A legal professional will be able to help you ensure this is the case.
If you are concerned that you may have got the wrong entity noted on the contract, or left your middle name off the contract (you will not be the first, or the last), please contact one of our conveyancing solicitors to advise you on the next steps moving forward.
What is the impact of terminating under the cooling off period?
So you felt pressure in the moment to sign the contract but are now having second thoughts. What is the impact of terminating under the cooling off period?
First, let’s define the cooling off period. A cooling off period in Queensland is essentially a period of five business days (including the date that you received the fully executed contract) where you as the buyer have the opportunity to determine your realistic ability to finance the property, and elect to terminate the contract at your absolute discretion (without explanation) if you discover you would not like to proceed with the purchase.
If this is the case, you need to give notice to the seller or the sellers’ solicitors by 5pm on the fifth business day of your cooling off period, using the correct form of notice. Your solicitor will be able to provide you with the correct form of notice. It is not sufficient to give notice of termination over the phone.
It’s also important to note here that not all contracts offer cooling off periods, for example purchases by auction. Furthermore, the seller may elect to impose a 0.25% penalty if you choose to terminate during the cooling off period. So you shouldn’t just enter into a contract on a whim. If the cooling off period ends and you do not give notice of termination, you will have no choice but to must proceed with the purchase as dictated in the terms of the contract.
Navigating cooling off periods can be tricky and it is recommended that you seek the assistance of a solicitor before making any quick decisions. Furthermore, we do not recommend that you attempt to terminate the contract under the cooling off period yourself as if the notice of termination is not valid by law, you would be locked into the contract.
Have I allowed enough time for finance and for settlement?
You’ll need to give yourself plenty of time to organise finance and for settlement. Typically, the rule of thumb is to keep the time period tight but allow for any unforeseen circumstances. Your conveyancing lawyer can help you review and negotiate the length of settlement period to find a common ground between you and the seller. Remember to consider:
● Time to have your mortgage approved by your financier (approximately two to three weeks)
● Time for your financier to draft up the loan documentation and for you to sign in the presence of a qualified witness (one-two weeks)
● Time for your bank to review the documentation and any missing information or correct casual error (a few days to a week)
● Time for your bank to prepare for settlement and be ready to take a booking from your solicitor
Often, a settlement period will last between 30 and 90 days in Australia. A 30 day settlement is standard in Queensland. However, it can be difficult for your bank to be ready in this time. If you can negotiate a longer settlement, this will give everyone time to get ready for settlement, 60 day settlement period will accommodate most buyers’ needs, and you can always ask to bring settlement forward if everyone is ready to settle earlier.
Have I done due diligence on the property?
It is absolutely crucial that you perform due diligence on the property before you sign the contract. In Queensland, unlike other states in Australia, the obligation is on the buyer to conduct research on the property (Buyer’s Beware) and the seller does not have to disclose very much in the contract.
What does this mean? Due diligence can often include:
1. Property Searches – Do a title review. You may wish to undertake searches so that you can decide if this is the right property for you, or to check that the great deal you got on the purchase price is in fact a great deal. You can conduct searches with Council to verify whether the improvements on the Property are Council Approved and Final Inspections have been issued, you may also want to conduct a flood search to see if this could be a flood prone area. There are lots of other departments that also have searches available such as the Department of Main Roads. Always get a preliminary title report on the property.
2. Inspect your property thoroughly – Since a building and pest inspection isn’t a broad termination right, you need to do this prior to signing the contract. Make sure that your property is in good condition. Have a licensed professional inspector review the house and landscaping for evidence of structural defects, water damage or other potential problems.
Since a building and pest inspection isn’t a broad termination right, and there isn’t a standard due diligence clause in most contracts, you either need to have the contract subject to Due Diligence Investigations and Building and Pest Inspection or you would need to undertake all your enquiries prior to signing the contract.
Am I eligible for the First Homeowners Grant and who looks after this?
The Queensland First Home Owners’ Grant is a state government initiative to help first home owners purchase their new first home.
To be eligible:
● You must be at least 18 years old.
● You must be an Australian citizen or permanent resident (or applying with someone who is).
● You or your partner must not have previously owned property in Australia that you lived in.
● You must be buying or building a brand new home.
● The total value of the home, including the land, must be less than $750,000.
● You must move into your new home as your principal place of residence within one year of the completed transaction and live there continuously for six months.
You will need to discuss your eligibility for this grant with your financier.
Am I exempt for Stamp Duty, who looks after this?
If you have not owned land before, you may be eligible for a concession on your stamp duty if you intend to move into the Property within 12 months of Settlement (6 months if you Purchase the Property with a Tenant in place) and will be living in the Property continuously for the next 12 Months.
Your lawyer will be able to determine if you are eligible for the concession and draft the Office of State Revenue Concession Forms to enable you to claim the concession, if this is available to you.
What does off-the-plan mean?
If you are buying an apartment, a townhouse, dwelling or vacant land as your residential property, you may have the option of ‘buying off-the-plan’. This means you are purchasing a property an apartment that has not yet been built and the subdivision of the land has not yet been completed. In this case, it is likely you have viewed the design and construction plans, but you may not be able to inspect do not have a physical property to inspect.
Since this is more complex transaction than a typical house purchase, and the contracts are often drafted by lawyers who make the contracts very developer-friendly, we recommend that you have the contract reviewed before entering into the contract. You may wish to negotiate stipulating a longer settlement period for Finance and Settlement to allow yourself sufficient time to settle all the requirements with the seller.
Purchasing your first home can be daunting but our experts at Brisbane Conveyancing are always happy to answer any concerns that you may have. Need help with the conveyancing or just want to talk it through? Contact Queensland’s conveyancing experts, Brisbane Conveyancing, on 07 3077 6566.