Australian option to buy land and property agreements - assignable and non-assignable
Locating a suitable house to buy is best done through a real estate agent. You should remember that a real estate agent works for the seller, not for you, so you should not reveal anything to the agent that you do not want the seller to know.
The next step is to make an offer on the house for the seller to consider. If the seller is satisfied with the price offered then both parties can proceed to sign a contract for sale and purchase.
While it is not essential, it is a good idea to involve a lawyer right from the beginning to help negotiate the contract for sale and purchase.
The contract should include:
Any special conditions should also be inserted; it is usually advisable to make the contract:
It is advisable to obtain a builder's report on the structural soundness of the house. It is also possible to get a pest report on the house.
You should preferably arrange finance before you make an offer on a house. This is especially important if you buy at an auction, as you are committed to the purchase and can be sued for damages if you pull out of the deal (see How to buy a house at an auction).
You may wish to have the property valued by a registered valuer. Your lender may require a valuation as a condition of your mortgage.
If you are buying a house with your husband or wife or de facto partner, it is generally best to put the property under both of your names. While under the PROPERTY (RELATIONSHIPS) ACT 1976 there is a strong presumption that the family home will be divided equally if your marriage or de facto relationship ends, this usually doesn't apply to marriages and relationships of less than three years: see How property is divided when a marriage or de facto relationship ends. So particularly if you are buying early on in a marriage or relationship, it would be wise to ensure that you share legal title to the house by having it under both your names.
It is a common dream for people to want to buy a section and to build their dream home or holiday home on it. However, buying a section is not as simple as it may sound, and it will always pay to do your homework on the section before putting in an offer, regardless of how attractive the section may look in a real estate advertisement.
As with buying a house (see How to buy a house), it is advisable to have a lawyer involved throughout the process of buying a section.
A few basic checks for one to perform can avoid a great deal of problems in the future. Ask around to compare the price you are paying with similar sections in the area. Check with the seller or developer what sort of financial packages they might be offering to assist you in buying the section; compare these with other options â€“ for example, those offered by your bank.
All the way through the initial consultation process with the seller or developer do not be afraid to ask what he or she might do for you. If there are any promises these will need to be set out in the contract you sign if you do decide to buy the section.
You have every right to ask the seller to provide a property report, known as a Land Information Memorandum (LIM), and all of the legal documents that may affect the section in question, especially the title to the property.
The LIM report is particularly useful as it will provide a variety of important information, including drainage records, the rates, any hazardous soil issues and the road access. The LIM report will also alert you to what is going on around your section and in the area â€“ for example, the size of any adjacent housing plans and any planned recreational areas. For more information on LIM reports, see How to obtain a Land Information Memorandum (LIM).
If you are intending to build on the section you will need to consult an architect, draftsperson or builder to look at the section before you buy it, to check the feasibility of your building plans.
It is always important to remember that there may be substantial extra costs and difficulties with sections on hillsides, or with difficult access, or with soft soil or hidden rock, or with DDT residue.
It is important that at the time that you enter into any contract to buy the land you make sure that the purchase is subject to your lawyer approving the title to the property and a LIM report.
In any case you should ask your lawyer to review any contract that you might be entering into, as the purchase of a section is an important decision and one that can contain many pitfalls for an unsuspecting buyer.
The usual process of selling a house involves using a real estate agent. It is the agent's job to find a buyer for your house; the agent will advertise and show the property to potential buyers. You will need to discuss with the agent how much to spend on advertising and who pays for it.
If you use an estate agent, remember that he or she is your agent, not that of the potential buyer. The agent works for you
You may, however, decide not to go through an agent, but rather to sell privately. In this case your lawyer and that of the buyer will complete the agreement for sale and purchase, which your lawyer will charge you for. However, this is usually not the best way to get the best price.
No, if there is no sale the agent is not entitled to receive any commission.
However, even if a sale does not take place a binding contract may be in place. This means that the agent could be entitled to commission even if the buyer defaults on settlement.
As well as the price of the house, you will need to decide what chattels (for example, furniture, drapes) should be included under the sale.
If you are auctioning, it may be advisable to obtain a "Land Information Memorandum" (a LIM), which contains the local council's records on the property, so that the potential buyer can be confident about what he or she is buying (see How to obtain a Land Information Memorandum).
You should consider whether the house needs any repairs and whether they would increase the value of your house sufficiently to be justified. Remember, presentation is everything.
Once you have established the terms under which you wish to sell your house you should determine the type of agency you want. The possible arrangements include the following:
The sale and purchase agreement should generally include:
Auctions are becoming an increasingly popular way of selling houses. If a property is desirable an auction enables a number of potential buyers to see it at the same time, and therefore it can be a means of obtaining the highest possible price for the property.
The advantages of selling by auction include the following:
Yes, there will be a fee involved in holding an auction, whether the house sells or not. Make sure to check with your real estate agent for details about this.
Usually a set of Particulars and Conditions of Auction are drawn up for the particular property before the auction. These are usually drafted by the auctioneer, and submitted to you for approval.
In the Particulars and Conditions you should include any special conditions that might attach to the property. For instance, if there was an agreement between you and a neighbour about some particular matter, and the agreement was not registered on the title, then the Particulars and Conditions should mention it.
Usually you as seller will set a reserve price for the property. It is usual practice for this not to be disclosed to bidders.
You may be entitled to bid for the property too, but this will be indicated in the Particulars and Conditions.
Once the highest bidder is found, that person becomes the buyer and must sign a contract and pay a deposit (usually 10 percent). If that person is unable to pay the deposit the auctioneer may re-open the bidding, or take the second highest bid so long as it is above the reserve price.
If a house does not sell at the auction there is a strong chance that it will sell shortly after with the bringing back of any conditional buyers â€“ that is, those who could not make an unconditional offer because, for example, they had not yet arranged finance.
Auctions have proved to be a popular way of selling houses in recent years. Buyers should be aware that the whole process has its own peculiar set of rules and potential difficulties. You should make sure that you do all the necessary background work before the auction.
Usually a set of Particulars and Conditions of Auction are drawn up for the particular property before the auction. You should study these closely before the auction and take particular note of any special conditions that might attach to the property. For instance, if there was an agreement between the owner and a neighbour about some particular matter, and the agreement was not registered on the title, then the Particulars and Conditions need to mention it.
Be aware of what warranties the seller is giving in relation to the property. In the Particulars and Conditions the seller may try to limit the warranties that apply in a standard agreement for sale and purchase.
It is very important that you obtain a Land Information Memorandum, which contains the local council's records on the property (see How to obtain a Land Information Memorandum), and that you are satisfied with all aspects of the property.
Usually the seller will have set a reserve price for the property. It is usual practice for this not to be disclosed to bidders.
The seller may be entitled to bid for the property too, but this will be indicated in the Particulars and Conditions.
Once the highest bidder is found, that person becomes the buyer and must sign a contract and pay a deposit (usually 10 percent). If you are unable to pay the deposit the auctioneer may re-open the bidding, or take the second highest bid so long as it was above the reserve price.
This is a conditional contract - the entire deal is under contract and both sides are bound - subject only to one or more conditions being met. The most usual condition is a grant of planning permission. Suitable for use throughout Australia.
Comprehensive option agreement for any land or property with provision for increasing the exercise price in proportion to the increased value of the land. Suitable for use throughout Australia.
Comprehensive option agreement for any land or property with provision for an extension of the option period in exchange for an additional payment to the Seller, thus rewarding him for waiting longer, if for example expected planning consent has been delayed. Suitable for use throughout Australia.
This standard comprehensive version is suitable for dealing with a land owner who requires an option agreement in its simplest form. Completely watertight yet elegantly easy. Suitable for use throughout Australia.
This standard comprehensive version is suitable for dealing with a land owner who is happy with legal documents, or with his solicitor. It does not contain the additional provisions of other documents. Suitable for use throughout Australia.
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