What a Buyer Needs to Know About Buying Off the Plan and the Risks Involved

If you are thinking about purchasing a property, one of the things you will need to decide is whether to buy a home that is already established, or goes for something off the plan. Obviously, buying off the plan is exciting as you will be the first person to live in the home, you will have the ability to choose your own floor plan and colour scheme. However, before you jump into an off the plan purchase, there are a few things you should be aware of, including the risks involved.

Before Signing any Paperwork

Before you sign anything regarding an off the plan purchase you should take some steps to ensure the finished product will be the home of your dreams.

– Visit the site and check out the location. If there are other buildings close by, they may affect your view.

– Spend some time inspecting the show home, plans and models, making sure to pay attention to finishes, fixtures and fittings.

– Research the current property market and talk to a professional to determine accurate property prices.

– Research the property developer. Ask questions such as: how long have they been in business? How many properties have they built? If possible, visit their previous builds, inspect the quality and talk to previous clients to find out how happy they are with their purchase.

– Find out exactly what is covered in the purchase price, and what will incur additional costs.

– Let the property developer know your expectations and have them included in the contract.

– Obtain guarantees of the developer’s financial status to avoid the risk of them going bankrupt before the property is finished.

– Carefully review the contract and all paperwork with a conveyancer or legal professional, taking note of things such as: completion date, penalties if you back out of the contract, and if you can visit the site. Also, check to see if you are able to make changes to fixtures and fittings, what happens if the developers get into financial difficulty, and what happens if you find faults with the property once it is complete.

Risks Involved in Buying Off the Plan

While buying off the plan does have its advantages, there are plenty of risks involved that you should be aware of.

– There is a risk that you could pay too much for a property if the market falls between the contract exchanges and the building being finished. If that does happen, you may find it difficult to obtain financing for the entire amount.

– Many builders do not allow you to view the property until construction is finished, which means there is a risk that the home you have imagined is not the home that you get, or the quality of work may not be up to your standards.

– Interest rates could rise before you settle on the property, which could cause problems if you want fixed terms and interest rates.

– It is possible that the property developer will go into liquidation before the property is complete. It is important that you know your options are if this happens.

As you can see, there are benefits and risks when it comes to buying off the plan. Because of this, it is important that you talk to a conveyancer before you sign any paperwork.

Property Fixtures, Smoke Alarms and Swimming Pools

If you are planning to sell your property in the near future, you should be aware of the laws regarding fixtures and fittings, smoke alarms, and the new swimming pool law that is coming into effect early next year.

Fixtures and Fittings

Typically, fixtures and fittings are things attached to the property in such a way that they are considered irremovable parts of the property and therefore are included in the sale. Common fixtures include things like floor coverings, built-in appliances, hot water service, wall ovens, range tops and light fittings.

As a seller, you are entitled to remove any fixtures when you sell the property. However, anything you plan to remove should be recorded in the contract of sale so that the buyer is aware.

Smoke Alarms

Smoke alarms have been required in homes since May 2006, meaning that if you are going to sell your home, you must ensure that smoke alarms are installed and working. Legally, there needs to be at least one working smoke alarm for each level of the home.

The smoke alarms installed must comply with Australian Standard 3789, and the standard should be clearly visible on the packaging. If you own an older property, and the smoke alarms were installed prior to May 2006, they may not comply with this standard and will need to be replaced.

If you fail to comply with this regulation, you may be subject to a fine. Additionally, it is an offence to remove or interfere with an existing smoke alarm except to maintain, repair or replace it.

Swimming Pools

New laws regarding selling a property with a swimming pool will be coming into effect 29 April 2015. According to the new law, any residential property with a spa pool or swimming pool cannot be sold unless they have a valid Certificate of Compliance or relevant occupation certificate.

In order to obtain this certificate, pool owners must register their pool at the NSW Government Swimming Pool Register. Your pool will then be inspected to make sure it meets all the safety requirements, and when it does, the certificate will be issued.

Fencing – a child-resistant safety fence must surround all swimming pools. All gates and doors providing access to the pool area must be kept closed at all times.

Signage – Warning signs must be put up in the immediate vicinity of the pool, or in a prominent position near the pool. Ideally, a sign should be put up near the shallow end of the pool. All signs must clearly state, “Young children should be supervised when using this swimming pool,” and should include details about resuscitation techniques related to babies, children and adults.

Failure to comply with these rules could result in on the spot fines.

E-Conveyancing, a New Conveyancing Approach & New Client Verification Requirements

If you are in the process of buying or selling a property, you may have heard of a new conveyancing approach using electronic conveyancing. But what exactly does that mean for you?

Electronic conveyancing or e-conveyancing is a high-tech digital revolution that will take you through the sale or purchase of a property automatically, without the need of a qualified conveyancer, which means that it is not nearly as daunting or confusing as it may sound.

Until recently, conveyancers did most of their work the old-fashioned way, using pen and paper. E-conveyancing brings that process into the 20th century by:

– Allowing all parties to use an electronic interface to view and complete documents in a real-estate transaction.
– Allowing all financial transactions to be completed on a pre-determined date. This includes settlement payments to any parties entitled to receive them and the payment of fees and taxes such as stamp duty.
– Allowing legal documents to be filed and registered electronically as necessary.

While this may seem to be a new approach, e-conveyancing has actually been around since about 2005, and went live in NSW in October 2013. The first release provided the necessary functionality for financial institutions to lodge and discharge mortgages electronically. Recently, NSW has moved into the second release, which expands the functions available to include things like settling financial transactions and the electronic filing of caveats and transfers of land.

Property Exchange Australia Limited (PEXA), a company whose main stakeholders include governments from NSW, WA, VIC and QLD, as well as some of the largest financial institutions in Australia, is running the entire implementation of e-conveyancing.

Client Verification Requirements

Obviously, it is extremely important that anyone buying or selling a property can provide adequate identification. This has become more important recently as identity fraud is on the rise across Australia.

In response to some incidents regarding identity fraud and fraudulent real estate transactions, and to try and slow the increase in scams and identity fraud, NSW Fair Trading recently released the Real Estate Fraud Prevention Guidelines.

These guidelines help those in the real estate industry verify the identity of clients and include common sense procedures and practices, a list of warning signs and what to do if you suspect suspicious activity.

To comply with these guidelines agents must confirm the identity of a client by verifying certain documentation such as:

– An original photo ID and an original or certified copy of a secondary ID without a photo
– Verify the legal ownership of a property if the client is selling

The guidelines also specifies that these ID checks must be made in a face-to-face interview and the agent must physically see the documents. A checklist should be completed and kept in the client’s file for further inspection if necessary.

A Proof of Identity Checklist for Vendors is included in the guidelines and gives a list of all documents that can be used as proof of identity.

Benefits of Using Platinum Conveyancing Services

Buying a home is a huge financial decision, possibly the biggest one you will ever make in your life, and selling a property is an equally large decision with its own set of decisions and concerns. That is why you need to find a reputable conveyancer.

Realty is a niche market and therefore it is a good idea to have someone who specialises in the industry to talk you through every step and give you sound property advice. Regardless of whether you are buying or selling, we can expertly guide you through the process with minimal hassle, fuss and stress.

Our specialty is assisting with residential purchases and helping property developers, and every client receives personalised service specifically tailored to their individual needs. We offer free reviews, fixed fees, and as much advice and guidance as you need, seven days a week.

Our experts believe in being there when you need them, answering the phone when you call and building a personal relationship with you. We treat you as an individual – not a number – while deciphering the legal jargon and guiding you with our expertise and experience.

Services We Offer

Did you know it has been proven that at times, buying or selling a home is so stressful it can cause premature ageing? We can make things easier for you with reassurance, advice, and understanding whenever you need it. Every one of our experts is experienced in property law and transfer and we offer a full range of services including:

  • Legal advice
  • Contract drafting and reviewing
  • Contracts for auctions and buying off-the-plan
  • Cost appraisals
  • Property titles
  • Tenancy
  • Warranties
  • Section 66w Certificates
  • Purchases, leases, and service contracts for retirement villages
  • Commercial property sales and leases
  • Communicating with financial institutions in regard to deposits, loans, mortgages and discharges
  • Execution of contracts
  • Preparing legal paperwork
  • Advice
  • And much more

Joanne Azar, Principal

Joanne is the Principal and Licensee of Platinum Conveyancing Services and has over ten years of experience in the conveyancing and property law industry.

She is a Certified Practising Conveyancer (CPC) and obtained her qualifications with the Australian Institute of Conveyancers, and of course, she holds a current Conveyancers License with the NSW Office of Fair Trading. Joanne also has completed her Diploma in Conveyancing Law and Practice from the Division of Law at Macquarie University in 2007. Not stopping there, she is also a Justice of the Peace with the NSW Attorney Generals Justice department.

Joanne’s background includes a number of qualifications from many educational institutes such as a Diploma in Business in 1996 and a Diploma of Marketing Management in 1998. She is also continuing her education in the legal industry while successfully running her practice in Parramatta.

As you can see, Joanne and her team of experts at Platinum Conveyancing Services are both experienced and qualified to deal with anything that may come up while buying or selling a property. They believe in giving every one of their clients personalised, individual attention and ensuring the process is as stress free as possible.

Common Factors in Purchasing a Home

Purchasing a home is a major investment and the amount of paperwork and legal matters involved, can be quite confusing. However, there are some things that can help make the process easier, and one of the main things is to hire a good conveyancing firm. A conveyancer deals with the legal transfer of ownership of land or property and can help you with the entire purchasing process from start to finish. Some common factors in purchasing a home that a conveyancing company can assist with include:

Contract Review

One of the first things you should do after you have found your ideal home is obtain a copy of the contract from the vendor or agent. You should then engage a conveyancer to perform a contract review, once the review is completed, your conveyancer can advise you about the conditions of the agreement, notify you of any dangerous areas, and negotiate for any changes you feel are appropriate.

Building and Pest Inspection

While many Australian’s question the importance of this step, a building and pest inspection should be performed before you purchase a home for many reasons, and some financial institutions will not approve a home loan if an inspection has not been completed. Your conveyancer can arrange for a reputable company to visit the house and perform an inspection.

Not only is the building and pest inspection important for financing, it is also important that you are aware of the condition of the home you are buying before you sign the contracts. This helps to protect you from purchasing a home that has structural defects that may become dangerous. The inspector will also check for pests such as termites, which can eat through the structure of a building in a way that could cause collapse.

This inspection allows you to decide against purchasing the property if too many structural problems are found. It can also help you come up with a viable termite prevention and management plan to ensure your new home is kept in great shape for as long as possible.

Arranging for the Loan to be Unconditionally Approved

At some point during the home buying process, you will need to talk to a bank or financial institution about a home loan. In most cases, the first step is to obtain pre-approval, and then conditional approval that means the loan application is approved as long as certain terms and conditions are met prior to the next step.

The final stage is unconditional approval, which means all terms and conditions have been met, the lender has everything they need and have confirmed that they are willing to loan you the funds. The lender will give issue a letter of approval, which you should receive before the end of the cooling off period. If, for some reason you have not obtained unconditional approval before the end of the cooling off period, you should ask for an extension.

Title Insurance – What is it and Do I Need it?

Title insurance is a special type of insurance policy that protects you legally and financially against any legal problems that may arise with the property that you did not know at the time of purchase. Title insurance companies such as Stewart Title issue this type of insurance.

Some of the problems that title insurance protects you from include, missing or forged documents, liens for unpaid inheritance, estate, gift or income taxes, and errors in recording legal documents. Without title insurance, any one of these problems could cause you to lose the title to the property and possibly lose a lot of money.

Title insurance will pay for any legal fees and for defending you against any lawsuits that may arise regarding the title, and will either rectify any title issues or pay any losses incurred by the insured. Once title insurance is purchased, it remains in effect as long as the insured or their heirs have an interest in the property.