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conveyancing information

Things you should know before you buy or sell a property

Residential Property
Sellers need to have arranged a carefully drafted contract of sale before the property is marketed and presented to potential buyers. We are able to prepare a contract to your best advantage, drafting any special conditions necessary to ensure your interests are protected.

The law also states that contracts prepared by real estate agents must be prepared in a certain way. If this is not done or the contracts are not properly executed, you may be able to avoid paying the agent's commission. Alternatively, you may end up mistakenly committing to issues that are not in your favour. We urge you to seek our advice before signing any agency contracts as we may be able to save you unnecessary costs.

If you are borrowing in order to buy your property, we can advise you on finance options and problems that may arise in mortgage documentation.

Cooling-off period
Queensland buyers have a five day cooling off period, which means they are entitled to terminate the contract for any reason whatsoever within five business days after the contract is formed and the parties are bound.

If the contract is terminated in the cooling off period, then the buyer must forfeit an amount of 0.25% of the purchase price.

Deposit
It is common in Queensland for a buyer to pay a deposit of up to 10% of the purchase price on signing of a contract. The deposit is usually held in the real estate agent's trust account. The parties can insist that the deposit be invested in an interest-bearing account with the interest going to the party entitled under the contract. This is a worthwhile consideration for large deposits.

Insurance
The standard Queensland contract provides that the buyer bears the risk of the property from the day after a contract is signed. The buyer should arrange an insurance cover note immediately after signing to ensure that its rights are protected.

Time of the essence
Queensland contracts are stated to be expressly 'time of the essence'. This means that if any step is required to be taken by a specified time or date and this does not occur, then the party who fails to take the step is in breach of a fundamental term of the contract entitling the other party to terminate immediately. This may have severe consequences, for example where there is non-payment or late payment of deposits or failure to settle on time.

Finance clause
Most contracts in Queensland are drawn so that a buyer has fourteen days in which to arrange finance. Buyers have an obligation to take all reasonable steps to obtain finance and it is extremely important that any application to obtain finance is lodged promptly and that the seller is notified of any acceptance or rejection of finance.

Building and pest inspections
Buyers can insist upon the right to obtain a pest or building inspection prior to completion. This is a recommended step that will give the buyer the right to terminate if the buyer is not satisfied with the outcome of such inspection.

Agent's commission
When selling a property through a real estate agent, the agent is usually entitled to claim a commission at the standard rate prescribed in the legislation. Commission is usually paid to the agent out of the deposit monies held on the completion date.

Links
ASIC
Department of Fair Trading
Office of State Revenue
PRP Valuers and Consultants

For more in-depth information on conveyancing visit the msl conveyancing website.

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