This article deals with your rights and obligations if you’re buying a house in Australia, “get out” clauses and complaints. This about what happens after your contract is signed. For more information about the pre-contractual stages of buying a house, including offer and acceptance, check out our Buying a Property article first.
Rights and Obligations
Once the offer and acceptance (or Private Treaty) is signed by both parties, you’re pretty much locked in. There are certain exceptions and we have more on “get out clauses” and conditional offers below.
Now is the time to employ your settlement agent (sometimes called a solicitor or conveyancer, depending on the state you’re in). These are qualified professionals who deal with the administrative side of a property sale. The stuff they deal with can be quite complicated.
For instance, they deal with tricky mathematics surrounding who pays how much of the council rates, water bills and strata levies (body corporate fees) for the year. These are paid out to the seller. Settlement agents check the title deeds for problems and deal with the relevant state land agency.
This period between signing the contract and “settlement” of the transaction usually takes six weeks. It’s during this time you will need to set things in motion with your mortgage broker or bank and confirm that your finance has been approved. It is also during this time that the work required to meet any other conditions of sale are met – for instance pest inspections or engineering reports.
For details about your specific rights and obligations relevant to the state or territory where you are thinking about purchasing a property, follow the state links on the Real Estate Institute of Australia website. Rules change from time to time and each state is subtly different and the local REI – whether it’s REIWA, REIACT, REIQ, REIV, REIT, REISA, REINSW or REINT – will have up-to-date information.
Get Out Clauses
Cooling Off Periods
There is a standard five business day “cooling off period” in the housing Contract of Sale, which gives you a bit of time to change your mind if you’ve found you’ve overcommitted. Be prepared to lose a quarter of your deposit if you withdraw from the sale at this point.
You can negotiate for a longer cooling off period, or you can waive it, should you wish. But this should all be dealt with at the time of signing the contract. If you are asked to waive the cooling-off period, the appropriate form must be signed by your solicitor.
Cooling off periods can only be included in contracts on private treaty sales, they cannot be included in auction sales.
If you have made a conditional offer on a property (that is, an offer “subject to” something like finance approval or an engineering report finding the building structurally safe) and those conditions are not met, then you are free with break the contract of sale.
At the point of settlement, the buyer pays the remainder of the selling price (normally through your lender, of course) and becomes the legal owner. The settlement date can move by agreement between both parties (sometimes it takes a little longer to get finance, for instance) but if one party does not agree, then you’re stuck with the original date.
If you have any concerns or complaints about a real estate agent or how an offer and acceptance or auction has been handled, at any time, there is recourse through the Real Estate Institute and the Consumer Affairs or Fair Trading department in the relevant state.
There are also relevant state-based agencies and supervisory boards to review complaints about settlement agents, solicitors and conveyancers.
To help avoid any problems, make sure all professionals you are dealing with are registered with their state agencies.
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