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| Conveyancing
Demystified |
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| In
many states of Australia, Private Treaty Sales, which are sales through
an agent by private negotiation and contract, have a cooling off period.
Here a buyer can change their mind and cancel. This is not the case however
for auctions or contacts exchanged on the day of an auction even if the
property passed in. Further, those who sign a Section 66W certificate -
that should only be signed under legal advice - will cancel their rights
to have a cooling off period. In Victoria the cooling off
period is three days, in New South Wales five days, and South Australia
only two. There is no cooling off period in Tasmania. |
| As
a seller you should also become familiar with what are a buyer's legal concerns
during the closing process, so that you are aware of what can go wrong.
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| For
the Buyer
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| Things change from state to state and even sometimes from
month to month with conveyancing law. So the situation we will describe
as an example of what to expect is for the state of Queensland as of January
2000. For instance, in Queensland at least, the property is at your risk
from 5pm on the first Business Day after the Contract Date, so ensure that
you have a Cover Note in place. |
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| As it
is most likely that you will be obtaining finance, you should ensure that
the contract has a clause for it to be subject to finance approval by a
certain date. Even if you have verbal approval, there are occasionally problems,
and should the contract not have this clause completed and finance is refused,
the contract will be unconditional and you must proceed. This clause is
one reason the seller will look favourably on negotiations with a buyer
who has a pre-approved finance. |
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The main consideration
is to allow sufficient time in the contract for the loan to be approved.
In Queensland for instance, the buyer must notify of finance approval
by 5pm on the date specified on the contract. If the seller does not receive
notification of finance approval by 5pm, the seller may terminate the
contract. If instead finance has been refused, you must still give notification
by 5pm on the date specified.
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| In
most states you have about twenty-eight days from the date of signing the
contract to satisfy yourself that the property is in order and to check
that the measurements accord with the title. You may also wish to check
that things such as hot water systems and attendant electrical appliances
work. To prevent problems, you may wish to have a clause in the contract
that all electrical appliances and the like will be working at settlement.
You are allowed to make arrangements to inspect the property on the day
of settlement to satisfy yourself that the property is in the same condition
as it was when inspected. Importantly, you should make the contract subject
to a satisfactory structural and pest report. If instead it is vacant land
that is being purchased, you may wish to have the soil tested for unstable
ground or toxicity. |
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