What to do after purchasing an off-the-plan property
When you purchase an off-the-plan property, there are still several steps to take after the signing of the contract.
Once the contract has been signed it is still ‘conditional’ on the purchaser and seller completing their obligations under the terms and conditions that are included in the contract.
The Cooling Off Period
The next step is the cooling-off period
• In Queensland, all purchases of real estate have a five-day cooling-off period after the contract has been signed
• During this time, you can decide not to proceed with the contract
Although we recommend speaking to your financial provider before signing your contract, should something unforeseen happen, you can cancel the contracts strictly within this period.
Following this step is to pay the balance of the deposit, which:
• Sellers will usually require purchasers to pay a full 10% of the purchase price
• Generally speaking, this is required within fourteen days of the contract date
• Is 10% of the purchase price less the initial holding deposit that is usually paid when you submit your Expression of Interest
This deposit money is held in trust for the purchaser. It is held in a solicitors’ trust account, which protects you by ensuring that no money is exchanged until construction has been completed and you settle.
The Unconditional Contract
The next step after this is the unconditional contract, which:
• Once the seller has received the full deposit, and all conditions of the contract have been satisfied or met, the Contract of Sale will become ‘Unconditional’
• Now a legally binding contract in place, binding both seller and buyer
• It is important to understand that banks will only provide approval in principle for finance when buying off-the-plan
• Generally, this is because the settlement of the property is too far in the future to approve a loan
• Most off-the-plan contracts are not subject to finance
• You should still speak to your bank or finance broker before signing a contract to determine if your financial situation will allow you to purchase a property
• We strongly encourage our clients to be in close contact with their Financier at least six months prior to the expected date of settlement to iron out any potential issues and have a stress-free settlement
The final step in this process is the settlement, and there are two phases to settlement when purchasing off-the-plan:
• The first phase occurs upon practical completion
This triggers the issue of Certificates of Classification, indicating that the building can be occupied
• The second phase occurs when the titles are registered
This is generally when you will be notified that Settlement has been called, and your Settlement usually occurs fourteen days later
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