What do These 5 Property Contract Phases Actually Mean?
When it comes to conveyancing terms, a lot of people don’t really know what most things mean and how they might affect them.
Here, we explain five of the more common property contract terms, so you can move through the property purchase process as smoothly as possible.
When you purchase a property, you don’t just shake hands with the current owner, hand over some cash and move in. Property purchases come with settlement periods, which commonly range in length from one to three months. Your settlement date is a pre-arranged day where the property title is officially transferred to you and any outstanding payments are made (this includes the balance of the purchase price and any relevant taxes or council rates). Once this is finalised and the settlement is effected, you will be able to collect your keys and move in!
Properties with strata titles are usually individual properties (like apartments and garages) and their common areas (like driveways, gardens, gyms and etc.) If you’re purchasing an apartment in an apartment building or even a unit in a set of units that is strata titled, your conveyancer will obtain all of the extra documentation, such as the Section 43 (1)© Certificates. For instance, there might be a large upcoming expense, like repainting the complex or replacing the roof, which you might be expected to contribute to.
If you’ve ever lived in a property where nothing can be built within three-metres of the back fence or where you have sewer lines that you need to keep accessible to the council, then you might already be familiar with the term ‘easement’.
This is the right of a person or entity (such as the Water Authority) to use a part of another person’s property. This doesn’t mean any random person can use your backyard; it’s only available for use for a specific reason, often pertaining to something to do with the local council or another Government Department. These easements can affect how a property is used and the value of the property, so always consult your conveyancer about any of these prior to signing your contracts.
Cooling off Period
Purchased a house at an auction only to go home and think ‘oh my god, what have I done?’ In Western Australia, there is no such thing as a cooling off period. However, it seems the Eastern States have a cooling off period. When purchasing a property, other than in Western Australia, you’ll have a period of time (approximately a week depending on what state you’re in) where you can back out of the deal. Be wary of this though, as there may be a fee associated with a change of mind. And rules change all the time, always check if a cooling off period applies before making an offer.
Most people purchase property with the assistance of a loan from a Bank or a Finance Company. Your home loan will become your mortgage and you will be required to make regular repayments, as well as interest payments. If you default on these payments the lender will have the right to seize and sell the property to get their money back.
These explanations are just the tip of the iceberg of property terms. To learn more about the conveyancing process or to have a professional, accredited quality endorsed conveyancing firm handle your property purchase or sale, contact Vicki Philipoff Settlements today.