fbpx

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.

Full Deposit
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.

Finance
• 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.

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.

 


DISCLAIMER: Whilst the publisher and author believe that the information contained in the publication is based on reliable and researched information, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. Anyone who intends to use the information as the basis for making financial or business decisions should first obtain advice from a qualified professional person. This article is published on the understanding that neither the publisher nor the author – is responsible for the results of any action taken on the basis of the information published; and is not engaged in rendering legal, accounting, professional or other advice or services. The publisher and author expressly disclaim all liability and responsibility to any reader of this publication as a consequence of anything done, or not done, by a reader relying upon any part of this publication. (C) This article may not be reproduced in full or in part without the specific written consent of Which Property? and the Author.