Buying

A must read if you plan to buy or sell around the Christmas / New Year period

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As Christmas draws near there is much to consider. If you are looking to buy or sell property then one vital consideration is the Christmas/New Year shut down period.


KEY TAKE OUTS:

  • Considerations for buying or selling around the Christmas/New Year break


Most Solicitors and Conveyancers will close over the Christmas/New Year break. The period of the office closure depends on the firm but irrespective here is what you will need to know.

Most Contracts for Sale will contain a special clause that notes the Christmas/New Year shut down period. Here’s what’s important about this:

  • in most circumstances the Contract will nominate a date for settlement in 2020, if the settlement period noted on the Contract falls within the Christmas/New Year break. For example, lets say this Contract contains a special clause that says that if settlement falls during 24 December 2019 and 16 January 2020 then settlement is automatically extended to 17 January 2020. Now let’s say Contracts have exchanged on Monday, 18 November 2019 pursuant to the standard 42 day completion period. In this case settlement would fall due on 30 December 2019. This falls in the Christmas/New Year shut down period. As such, pursuant to the special clause, settlement is automatically extended to 17 January 2020.

  • usually, the special clause will restrict either party from serving any notice requiring settlement during the closure period. For example, lets say this Contract contains a special clause that says that if either party serves a notice requiring settlement between 24 December 2019 and 16 January 2020, then notice expiry date is automatically extended to 17 January 2020. Now, you are the buyer and settlement was due on 20 December 2019 but the seller wasn’t ready and didn’t complete on that day. If you served a 14 day notice to complete, demanding settlement, that 14 day notice would fall due during the closure period. As such, instead of the notice expiring 14 days after it is served, it expires on 17 January 2020.

 

So, if you’re a buyer, before signing a Contract:

  • have a discussion with the other party about their settlement expectations i.e. do they want to settle before or after the Christmas/New Year break

  • get advice on the Contract terms. Does the Contract contain a Christmas/New Year closure clause and if so, how this this affect you?

 

And if you’re a seller:

  • have a discussion with your Solicitor/Conveyancer about their office Christmas/New Year shut down period

  • let your Solicitor/Conveyancer and Agent know whether you would prefer a settlement pre or post Christmas/New Year break


ABOUT MELINA CONSTANTINO:

Melina has over 9 years’ experience as a Licensed Conveyancer, acting for client matters involving; purchase and sale of residential and commercial property, Retirement Village Contracts, Put & Call Options, Call Options and Family Transfers. She is passionate about helping a wide range of clients across all aspects of the buying and selling process and ensuring that her clients meet all their legal obligations.


For further information please don’t hesitate to contact:

Melina Costantino
Licensed Conveyancer & JP
melina@couttslegal.com.au
02 4607 2104

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Attention First Home Buyers!

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Have you heard of the First Home Buyers First Home Loan Deposit Scheme?


KEY TAKE OUTS:

  • The Federal Government has introduced the First Home Buyers First Home Loan Deposit Scheme which is due to commence from 1st January 2020 which will assist first home buyers with being able to borrow to purchase their first home!


From 1st January 2020, the First Home Loan Deposit Scheme will commence.  This scheme is aiming to help first home buyers enter into the property market sooner by providing a Government guarantee that allows the first home buyer to purchase a home with a deposit of only 5%.

The scheme means that the additional amount required to reach a 20% deposit will be guaranteed by the Government, which ensures that the borrowers will not need to pay lender’s mortgage insurance, giving first home buyers a saving of up to $10,000.00.  The support from the Government will stay in place for the life of your loan.

An income threshold will apply to this scheme.  You qualify if you are a single earning up to $125,000.00 or a couple with a combined income of up to $200,000.00.  You must also both be first home buyers.

There is a catch!  This offer is only open to a maximum of 10,000 loans every year – so get in quick!


ABOUT CARINA NOVEK:

As a Licensed Conveyancer, Carina specialises in property law. She has over 20 years experience in conveyancing and is the perfect person to help get you into your first home today!


For further information please don’t hesitate to contact:

Carina Novek
Property Manager
carina@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Steps to take before bidding at auction

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Bidding at an auction can be an overwhelming thought if you have not purchased property in this way before.  So we thought we would help out by setting out a few keys steps to take before the auction gets under way.


KEY TAKE OUTS:

·       Follow our step by step process before you start to bid at an auction!


STEP ONE: Pre-Approval

Speak to Mortgage Broker or Bank to obtain pre-approval.

STEP TWO: What happens at an auction?

Attend other auctions to see how an auction is run – so it is less daunting on the day.

STEP THREE: The Right Property

Find a Property you are interested in and attend the open home – ask the agent for a copy of the Bidder’s Guide.

STEP FOUR: Get the Contract

Request a copy of the Contract for Sale and send it to your Licensed Conveyancer for review. 

STEP FIVE: Negotiating

Similar to a private treaty purchase you have the opportunity to negotiate the Contract.  The weeks leading up to the auction is when this must occur.

If the Contract was successfully negotiated, then your Licensed Conveyancer should give you a copy of the requests and the vendor’s solicitors response to take with you for reference.

STEP SIX: Inspect the Building

Arrange a Pest and Building Inspection, while this cost is not refundable is you are not successful at auction it is a small price to pay for peace of mind if you are the new owner of the Property.

STEP SEVEN: Deposit

Arrange your deposit to ensure you are prepared if you are successful.  Your options are:

  • 10% cash deposit (unless a lesser deposit has been previously negotiated);

  • Deposit Bond.  A deposit bond can be obtained through your mortgage broker.  When related to an auction purchase a deposit bond cover you for 10% of your maximum intended bid.  If you intend to use a deposit bond you need to ensure your Licensed Conveyancer has received approval for this from the vendor’s solicitor.

STEP EIGHT: Time to make a move

Register to bid by contacting the agent prior to the auction.

STEP NINE: Ready Set Bid

Make the highest bid!

STEP TEN: Make it yours

Now is the time you sign the Contract for Sale and plan to pay the deposit.


Congratulations! You are well on your way to becoming a new home owner.  Coutts’ look forward to guiding you through the rest of the process and seeing you move into your dream home.


ABOUT KYLIE FUENTES:

Kylie is a licensed conveyancer and JP based in Picton. She has over 10 years’ experience acting and advising clients on their property transactions. Kylie has deep exposure in acting for matters involving the sale and purchase of residential, commercial and industrial sites, in addition to vacant land and house and land packages within New South Wales.


For further information please don’t hesitate to contact:

Kylie Fuentes
Licensed Conveyancer & JP
kylie@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Self Managed Super Funds

BUYING property through self managed super funds (SMSFs) seems to be flavour of the month, but while friends and relatives may be waxing lyrical about the benefits, there is a lot you need to understand before jumping on the bandwagon.

Last year the Australian Taxation Office clarified what is allowed and what isn’t when it comes to borrowing money to buy and maintain property with a SMSF.

People have always been able to buy property via SMSFs but what has changed in the past few years is that SMSFs can now borrow money to do so.  This has meant that SMSFs are now able to make investments that they may not previously have been able to afford.  Prior to 2007, funds could not borrow to invest and even after the super rules were updated to allow it, there existed some doubt about other things like whether a fund could make improvements to property.

Here's the rules

There are strict rules governing what money borrowed through an SMSF can be used for.  For example, spending borrowed money on repairs and maintenance is ok, but spending borrowed money on anything deemed to be an ‘improvement’ is not allowed.  While improvements to the investment property are allowed, they must be funded using other money in the SMSF (such as money from member contributions) and not any funds the SMSF has borrowed.

People need to go into the arrangement with their eyes wide open.  For example, depending on whether a person would be making a taxable loss or gain with an investment property, and factoring in what their marginal tax rate is, they may be better off holding a property investment outside of super.  It all comes back to looking at what’s best for the individual and their circumstances.

With something as important as the money a person hopes to retire with, it’s worthwhile researching any retirement strategy thoroughly and seeking independent advice before deciding if it’s the right choice for you.

It’s vital not only to get tax, legal and financial advice, but also to make sure that your advisers are up-to-date in this area.

Get the documentation wrong for the borrowing arrangements, for example, and you could end up paying double the stamp duty on an investment property.  It really does pay to choose your advisers wisely and remember that ignoring the fine print is at your peril!  It’s worth knowing that you can get in-house administration support with certain SMSF products – this can save time, money and heart-ache in the long run.

Things to weigh up

If buying property within a SMSF is something you are seriously considering, here are a few things to weigh up. As a general rule, it’s a good idea to have a SMSF in place before looking at investment properties.  The process of setting up an SMSF can be lengthy , so all the time and effort put into finding the property investment of your dreams could go to waste if your ducks aren’t in a row by settlement  time.

It’s important to do your research.  The Australian Securities and Investment Commission (ASIC) website at www.asic.gov.au – is a good place to start.   Then speak to your advisers about whether this strategy would suit your personal goals, timeframe and feelings about risk.

People must be aware of the costs associated with managing the SMSF (quite aside from the establishment costs if you don’t have an SMSF in place already) and adding a borrowing arrangement into it.

Coutts has the team to manage your purchase in self managed super fund. Therefore, if you are looking to buy a property in a self managed super fund please contact Coutts.