Buying a new home

20/3/2015Author: Geraldton Property Inspections

STEP 1: CONVEYANCING

The first step when purchasing a new pre loved home is to obtain a Conveyancer.
Conveyancing is the legal process of transferring ownership of property.
The purpose is to ensure that the buyer gets the land together with all the rights that go with it, and knows about any restrictions in advance.

You can decide who will do the paperwork associated with the property purchase. It may be a solicitor, certified practising Conveyancer, or you can do it yourself.

It is strongly recommended for inexperienced buyers to seek professional advice regarding the Conveyancing process, as licensed Conveyancers are covered under the necessary professional indemnity insurances.

Always ensure the Conveyancer explains the process of buying a property to you and read everything before signing anything!

A Conveyancer is not a builder or a termite expert so make sure you read and understand your Pest & Building Inspection reports as this is NOT the responsibility of a Conveyancer!

GLOSSARY OF CONVEYANCING TERMS:

Auction	A public sale of a property or real estate that is sold to the highest bidder and if you are the successful bidder you are required to sign Contracts at the time of the Auction. The Contract then becomes binding upon all parties immediately (there is no Cooling Off period).
Body Corporate	A company that forms part of a Strata Title, Community Title or Neighbourhood Title property made up of all the owners of the units in a complex.
Caveat	A warning on a Certificate Title that a third party might have some interest or right in the property.
Contract of Sale (Contract)	A written agreement setting out the terms and conditions which the seller and purchaser enter into for the sale and purchase of a property.
Cooling-off Period	The legal right of a buyer to withdraw from a contract for purchase of residential property by giving written notice within a certain number of business days (There is No cooling off period in WA the sale must proceed) after exchange. A cooling-off period does not apply if: The property is purchased at an auction or on the same day as an auction. The purchaser receives independent legal advice prior to the purchase of the property and waives its cooling off rights. Or it is a rural property or a property which is over 2.5 hectares
Covenant	A right or obligation affecting a property and noted on the title of that property for the benefit of some party, e.g. a property might be affected by a covenant restricting the property owner from constructing a dwelling of more than one storey in height.
Easement	A right granted to a person to use the land belonging to another, e.g. a neighbour may have an easement to drain water across an adjoining property.
Deposit	A deposit is normally paid by the buyer at the time of exchanging contracts or on “fall of the hammer” at auction. It is normally 10% of the purchase price. Deposit Bond – A written undertaking by a company to be answerable for payment of a deposit on the purchase of a property in the event of non-performance by the buyer.
Exchange	The Contract of Sale is prepared in duplicate, usually by the seller’s solicitor or conveyancer. The original is signed by the seller and a copy is signed by the buyer. The signed contracts are then exchanged and the buyer and seller each receive a copy signed by the other.
Home Loan	The funds a buyer has to borrow (usually from a bank or other financial institution) to purchase a property, generally secured by a registered mortgage to the bank over the property being purchased.
Loan	The funds a buyer has to borrow (usually from a bank or other financial institution) to purchase a property, generally secured by a registered mortgage to the financial institution over the property being purchased.
Loan documents	the documents the lender requires a borrower to sign before the lender will advance loan monies to the borrower.
Mortgage	A security taken by a lender over the property of the person the lender is lending money to. The effect of a mortgage is that the borrower cannot sell the property without repaying the loan and if the borrower fails to repay the loan, the lender (mortgagee) can sell the borrower’s property.
Mortgage Broker	An individual or company that obtains loans for others by finding lending institutions to lend the money.
Mortgage documents	the documents the lender requires a borrower to sign before the lender will advance loan monies to the borrower.
Pre-approval	An approval for a home loan credit issued by a lender before the borrower has selected a property. Usually issued for a stated maximum loan amount and conditional on a valuation being obtained for the property.
Pre-Purchase inspections	An approval for a home loan credit issued by a lender before the borrower has selected a property. Usually issued for a stated maximum loan amount and conditional on a valuation being obtained for the property.
Pre-Purchase inspections	the qualified inspections undertaken by buyers of properties prior to exchange or during the cooling-off period. Typical Pre-Purchase inspections include pest reports, building reports and strata reports for strata title properties. Be aware of unqualified entities.
Real estate agent	A person licensed to negotiate and sell property on behalf of the property owner.
Redraw	Accessing extra payments that may have been paid into an existing home loan.
Reverse Mortgage (seniors loan)	A loan that provides seniors with funds from the equity in their homes. Generally, no payments are made until the borrower moves, the property is sold or the borrower dies.
Settlement	The event at which the purchase of a property is finalised by the legal representatives of the vendor and the purchaser. Title documents are delivered to the purchaser’s solicitor in exchange for the balance of the purchase monies. At the same time mortgage documents come into effect, costs are paid and the new owner takes possession of the property.
Sewer diagram	a diagram issued by the local water authority disclosing the location of the main sewer line in relation to a property.
Stamp Duty	A state tax on conveyance or transfer of real property calculated on the total value of the property.
Strata search	These reports are usually obtained by buyers prior to exchange when buying a strata title property. The report covers issues such as the history of the building, recent repairs undertaken, disputes or areas under investigation, monies in the bank to cover repairs and maintenance and the likelihood of any special levies, insurances and by-laws.
Statutory searches	The searches required by law to be contained in a contract for sale of residential property. The searches include title search, zoning certificate and sewer diagram. Strata title – A form of title used for units and townhouses. It gives the owner membership of an Owners’ Corporation, and the ownership of a defined part of a building. Strata titles are registered under the Torrens Title system Title deed (also known as a Certificate of Title) – A legal document registered at and issued by the Land & Property Information Office as proof of ownership of property.
Title search	Details the names of the owners of a property and other information such as encumbrances, covenants and caveats.
Torrens Title	A system of recording property ownership where registration on the Certificate of Title guarantees ownership. Transfer (Transferring) – moving interests in a property between people. It may involve adding or removing one or more person’s names from a property.
Valuation	An assessment of the value of a property given in a written report by a registered Valuer.
Valuer	a licenced person who determines the value of a property using established valuation methodology.
Vendor	The seller. Zoning Certificate – a certificate issued by a local council disclosing the nature of the zoning of a property and any adverse affectations recorded in the Council’s records with respect to the property. (2010)

If you are after a competent Conveyancer I strongly suggest you contact the Australian Institute of Conveyancers (AIC.)

Experience, unfortunately shows that some Conveyancers will use cheaper alternatives of property inspectors to make their overall quote and fee proposal most competitive. Be aware of this!

There should be NO competition involved when buying a home.

Only buy a home based on an acknowledgment of the research you, the homebuyer, do.

This is a photo of a home purchased where the pest and building inspector/s said it was OK! What would you say here?