Subject to Finance
If you are borrowing money to purchase a property, include a “Finance Condition” in the contract. This makes the contract subject to finance.
We list below some important basic concepts in Conveyancing, and you will find answers to some commonly asked questions.
From giving you advice on your contract, to arranging your finances with your bank, calculating your settlement adjustements to attending settlement, we take our clients through the journey and protect their interests.
Scroll down to read more.
If you are borrowing money to purchase a property, include a “Finance Condition” in the contract. This makes the contract subject to finance.
Your Conveyancing is important! Our professional team will carry you through your purchase.
We provide professional conveyancing services for your sale. Tell us what you need in your sale, and we will protect and guide you along.
If you buy a residential property in joint names with another person, there are 2 ways which the property may be owned jointly.
We strongly believe that we should guide and protect you closely in your Building and Pest condition. It is one of the most major steps in a residential conveyancing.
If you’re buying a property, you probably need to pay transfer duty (aka stamp duty). Sometime, you might be eligible for a discount!
You would at least inspect the property twice, once before you sign the contract, and a second time before settlement.
Conveyancing in Brisbane and Queensland happens every day.
This is probably one the most common questions asked – “What do I need to know in Conveyancing?”.
The first thing you need to know is this: Conveyancing involves LAW.
Yes, there is a lot of procedural stuff, however, Conveyancing is a lot more then just procedures.
It involves contract law (the conveyancing contract), property law (transfer of ownership in property), tax law (GST, CGT, Stamp Duty, AFAD etc), company law (if the owner is a company), trust law (if the owner involves trust), succession law (it affects your estate), and many more legal areas it touches on.
You may think that you don’t need any of these. But it migbt be beneficial to know what options you have, before you make a wise and informed decision. Our Conveyancing lawyer can explain these to you, you may choose and pick what you really need and don’t need.
Can you buy your house under a company name, or under a family trust, which might protect you and your family more? Or, even save you money on tax? Do you need to update your Will, since you have now bought or sold a major property?
Parking this aside, we attempt to layout below the foundational concepts of a conveyancing matter which you need to know.
Start with the very basic stuff – who owns the property?
Almost the very first thing you should ask when buying or selling a property is, “do you have a Current Title Search?” Because a Current Title Search reveals who the owner on title is.
This might seem very trivial to some, but in fact this is foundationally important.
If the property is held under joint names, the Current Title Search shows whether the property is owned in “JOINT TENANCY” or “TENANCY IN COMMON”. If you’re buying under joint names, this is EXTREMELY important. What are the differences between “Joint Tenancy” and “Tenancy in Common”? Read here.
The 2 most common conditions under a Queensland conveyancing REIQ contract are: (1) Finance condition and (2) Building and Pest Inspection condition.
So long as you have one or more of these conditions in the contract, your contract is a “conditional contract”. Which means, it’s not totally binding yet, as it is subject to some conditions.
Once all conditions in your contract are satisfied, your contract becomes UNCONDITIONAL.
You can have other conditions in your contract.
For example, a due diligence condition, where the buyer wants to examine particular things relating a property, such as body corporate, or building condition, or even things like vegetation orders, before the contract becomes “fully” binding.
Another not uncommon example is a purchase subject to another sale. In this case, the purchase contract becomes unconditional when the sale settlement is effected, and a lot of times almost immediately before the purchase settlement happens.
This is relatively simple to explain – your contract does not become “fully” binding until your bank approves your loan in writing.
Remember, that a “pre-approval” of a loan is not the same as “final loan approval”.
Even if you’re given a pre-approval, you still need to insert a finance condition into your contract. This is very important.
You certainly do not want to end up with a legally binding contract, when you have a loan pre-approval but then got rejected by a bank (this is not uncommon).
Your bank considers a lot of things when approving your loan.
But once your loan is approved (if you’re buying), forward the loan approval letter to your Conveyancing Lawyer so they can inform the seller’s solicitors of the satisfaction of Finance condition.
Your Conveyancing Lawyer will then liaise with your bank to get ready for settlement.
Read more about “Subject to Finance”.
Almost immediately after a Conveyancing contract is signed, the buyer should appoint an inspector to inspect the property.
We recommend the buyer to appoint an inspector as soon as possible, as this gives more time for the Conveyancing Lawyer to deal with any issues that may arise. We can recommend you some reputable inspection companies if you’re wondering which ones are good.
The inspection consists of 2 parts: (1) Building inspection, and (2) Pest inspection.
An inspection company of considerable size and reputation will do both at the same time. But it is also not uncommon to have separate inspection companies to do each of them separately.
The inspection company will produce an Inspection Report for the buyer. And, the buyer will have to decide whether he or she is happy with the condition of the property, before the deadline.
The deadline is quite commonly 7, 14 or 21 days after the contract date, but it can be shorter (we’ve seen 3 days) or longer (we’ve seen 6 months), depending on the arrangement between the seller and the buyer.
And, it doesn’t necessarily have to be increments of 7 (it can be 40 days).
Read more about “Building and Pest Inspection”.
Do you need to pay Stamp Duty (same thing as Transfer Duty)? It really depends on your situation.
If you’re a first home buyer – maybe. It depends on the property price.
If you’re going to live in the house, but it’s not your first home – maybe. It, again, depends on the property price.
If you’re investing the property for income, and not living in it – yes, it’s quite likely you have to pay Stamp Duty.
If you’re a foreign purchaser – not only you need to pay Stamp Duty, you also need to pay what’s called the Additional Foreign Acquirer Duty (AFAD), i.e. Stamp Duty + AFAD.
You can use our Stamp Duty Calculator to get an idea on how much Stamp Duty you need to pay.
One thing you need to know when selling a property, is that your Conveyancing Lawyer should be able to advise you on the drafting of the Conveyancing contract.
Whether it is your Conveyancing Lawyer drafting your contract, or it is your real estate agent drafting your contract, the advice should come from your lawyer.
Is your property subject to any encumbrances? – Your Current Title Search should be able to reveal that.
If your property subject to any administrative orders from a Tribunal? – Your Current Title Search should be able to reveal that.
Do you have any Included Chattels or Excluded Fixtures in your sale? Ask you real estate agent to put that into the contract, or alternatively your Conveyancing Lawyer should be happy to explain this to you and insert the clauses for you into the contract.
If you’re selling a property, you do not need to pay Stamp Duty, but you may subject to pay Capital Gains Tax (CGT).
If you sell your property, you usually make a profit, because the property would have likely increased in price over time. This “profit” is considered part of your income and is subject to income tax (not a separate tax, although it’s called CGT).
However, if the property is your home, you will be exempted from paying CGT.
Another thing you may need to consider is your estate planning. Whatever age you are, you should not omit considering your estate planning.
Yes, you might be spending some money to put the right documents in place (e.g. Will & EPOA), but families without these in place when a disaster happens can testify to you that it will 50 times more expensive when something bad happens.
It is almost like an insurance (but it’s not). You’re preparing for the worst to happen by having adequate arrangement in place.
This is another huge topic to be told (it’s important!). We encourage you to understand more about this topic, and make a decision to protect yourself and your family.