time line for house buying?

hi all,

We're weighing up the different possibilities for finding somewhere to live when we make the big move and I

Pam wondering if anyone can tell me the sort of time lag there is likely to be between agreeing to buy a property and collecting the front door key?

Also can anyone give me any idea of the likely associated costs? We know about the tax, I'm thinking about solicitors fees, survey charges etc. We are looking to settle in NSW

thanks in advance.

Buying in Aus is different to the UK. Once you sign the contract you have to buy the house. There is no backing out. Surveys or inspections are only made if you pay for one to be carried out and its best to do that prior to buying. Solicitors, Conveyancers and lenders all charge different fees so its usual for you to ring around and find out their costs. Stamp duty will be fixed at the rate for the State you are buying in. If you look at the Consumer Affairs site in New South Wales they often have brochures you can download which will help you with buying and selling.

The standard time from exchange of contracts to settlement (completion) in NSW is 6 weeks. Occasionally people negotiate shorter or longer but both parties need to agree and the standard settlement period probably applies in 90%+ of transactions

What happens much faster here is getting to exchange of contracts. Chains of transactions as you will be used to don't really exist.

Properties can be sold through auction or by private treaty (akin to the UK practice of agreeing a price). It is common for vendors to have an auction "campaign" where they have a few weeks of open houses with an auction date set, to get the interest up, but still be open to offers prior to auction, which is just like a private treaty sale.

LOTS more houses get auctioned here, as opposed to the UK when it's mostly repos and stuff being offloaded by corporates. For vendors in hot markets they think it is more likely to get people in bidding wars or paying over the odds just to secure the property. This is particularly the case in Sydney, where in some busy markets (eg Inner West) it's almost impossible to find a property that doesn't go to auction. In less busy ones vendors will be more open to taking offers during a campaign. In country areas it's much more common for properties to be sold by simple private treaty because the markets here are much slower, so no real benefit to vendors trying to whip up a bidding war as there just aren't enough buyers to create one.

If you buy at auction, on the hammer you are committed to paying a 10% deposit and exchanging contracts on the spot, and settlement follows 6 weeks later. This means that before the auction you really have to do your due diligence (get survey reports, sometimes these are provided by the vendor, get your mortgage all in place, get a conveyancer to check the draft contract of sale and negotiate out any unacceptable clauses). This can cost IRO $1000 a time for a property about which you're really serious, so you can see how failing to buy at repeated auctions soon gets expensive. You still have to do that when buying via private treaty, but you're in a better position to at least get an offer accepted in principle, subject to you sorting out your surveys and contracts.

Either way, you have to move quite fast to exchange contracts. The practice of agreeing a price and the vendors "taking it off the market" while you do that due diligence doesn't exist. This pace is why you don't get chains - it would be impossible to line all that up across multiple transactions. People here accept that when buying and selling, they might have to pay two mortgages for a short time, or get a bridging loan, or rent for a bit, or camp out with friends/family, because the chances of being able to sell your house and buy another and the settlement be on the same day are very slim

I would say that the whole process from seeing a house you're really serious about either during an auction campaign or privately, to moving in, takes about 8-10 weeks.

Personal example:

We saw our house advertised on an auction campaign. We'd already bid and "lost" a 3 auctions and had had enough of the process, so were very clear to agents we were only interested in properties where they would consider offers prior. My wife saw this one (I was working), I rang the agent the next day to see if I could view as well and went separately to have a look. We decided within 48 hours we wanted it, and made an offer, which the agent negotiated (there was one other party interested) over the next few days whilst we got our mortgage sorted out. This whole process from first viewing to agreeing the price took about a week.

We quickly got inspections and valuations done (2-3 days), found a conveyancer, and got her to negotiate the terms in the contract of sale. This whole process took about another week. A day or two later, we paid the deposit and exchanged contracts. 6 weeks later we were in

So from first viewing to exchange was about 2.5 weeks, 6 weeks from there to settlement. 8.5 weeks total

HTH

EDIT: Stamp duty is a significant cost, I can't remember the rate but it will be on the NSW government website. You have to allow for that (just as in the UK), your inspection costs, and lenders costs (which will usually get rolled into the mortgage), and your conveyancer's costs.

Inspections cost $200-$500 or so. You may want to get a separate pest inspection (for termite risk mainly) which is another $200-$300. Inspections are of limited value IMO, just as in the UK; building surveyors in both countries caveat their observations and often miss things. OK for me as I am experienced in buildings & construction

Conveyancer, I can't remember but she was probably in the $600-700 zone all up. Ours would negotiate terms in contracts for about $200 but waive the cost if the deal fell through, then the other $500 was for everything else (sorting the financial transactions, contract finalisations etc). She was excellent and if you're buying in Sydney PM me and I'll send her details

thanks Petals and Northshorepom, that's really helpful. Some of it we knew, but a lot was new. We won't need any of this for a while (still to sell in UK) but I find it's really helpful to know the system before you start looking in earnest.

We've just bought in regional NSW. As northshorepom says, 6 weeks is the usual time from exchange of contracts to settlement (completion), but because our property was vacant (and we were about to be homeless) we requested early settlement, so got the keys two weeks early. Building and pest inspection only cost us $500, the conveyancer about $1200. Stamp duty was the killer though: on a $386k house the tax came to $13.5k.

Good luck!

Buying in Aus is different to the UK. Once you sign the contract you have to buy the house. There is no backing out. Surveys or inspections are only made if you pay for one to be carried out and its best to do that prior to buying. Solicitors, Conveyancers and lenders all charge different fees so its usual for you to ring around and find out their costs. Stamp duty will be fixed at the rate for the State you are buying in. If you look at the Consumer Affairs site in New South Wales they often have brochures you can download which will help you with buying and selling.

Important to point out this is totally untrue.

NSW has a 5 day cooling off period after you sign the contract other that an auction.

Typical settlement periods are 60 days or 90 days but subject to negotiation with the vendor.

If you defaulted on a purchase you would likely lose your 10% deposit.

hi all,

 

We're weighing up the different possibilities for finding somewhere to live when we make the big move and I

Pam wondering if anyone can tell me the sort of time lag there is likely to be between agreeing to buy a property and collecting the front door key?

 

Also can anyone give me any idea of the likely associated costs? We know about the tax, I'm thinking about solicitors fees, survey charges etc. We are looking to settle in NSW

 

 

thanks in advance.

I usually think two months until exchange time. You also have a three week cooling off period where either party can pull out. I've done that once but it was costly as my solicitor had already started the procedure with the first house and then I decided to buy another house so I ended up paying quite a bit more than necessary! Most people pay for a survey of the property - essential, in my view - and you can get a cheapie survey or go for the full monte. I have always gone for the full survey as you never know what might be lurking underneath or overhead! Stamp Duty is another cost - everyone hates it but you can't get out of it. You've received some good advice from Northshorepom and the others so can't add anything more to that.

NSP. Settlement is not always 6 weeks.

Don't forget the buyer is not the only party involved.

Usually the seller is living in the property and also needs to move to a new home.

So generally it is a negotiation but more likely the seller will dictate the timing to what they require depending on when they are ready to move, which determines the settlement date anf buyer being able to move in.

I'm talking about the standard NSW contract of sale, which is almost always 6 weeks. It can be amended by negotiation of course - I did say that - but IME this rarely occurs, certainly in Sydney. Regional NSW it would be more likely to. I negotiated about 4 contracts when we were buying and they were all 6 weeks, the other dozen or so draft contracts I took out were all six weeks, others who were buying/selling at the same time that we know were all in 6 week settlements too. In Sydney it is the norm, and as the standard contract form is in use across NSW I expect it is at least the starting point for negotiations there.

Also note the cooling off period (that is one of he standard contract terms) is one of the terms that vendors' conveyancer's/lawyers usually delete, at least in Sydney. Again, every draft contract I took out had this removed and the 4 I negotiated, I tried to get it put back but none would budge. I grant that Sydney has been a sellers' market for the past 3 or so years so they could call these sort of shots.

The point is that the cooling off period is not a statutory right; it's just part of the standard contract of sale, and a part that is often deleted

thanks all. We've had experience of buying in system where you sign up and then are more or less committed and I have to say I prefer it, at least you know the seller isn't going to pull out after you've paid all your searches or start demanding more money at the last minute. So it's a relief to know this system operates in Sydney. It's also no surprise to hear about big 'stamp duty' bills - again, we have suffered this before!

What I was really after was an idea of the time from acceptance of your offer to moving in, and the likely other costs of conveyancing etc, and I'm really grateful to you all for giving me an idea of how this works. Sounds a bit daunting, but having fallen foul of a cheap on survey in the past, we'll be going for a full structural survey if we can afford it.

Thank you.

You can add clauses to your side of the contract. You can make your offer subject to finance and satisfactory survey.

The former is common but the latter less so. When we made an offer on a house we added the survey clause, owner was perplexed never had one done, house was fine......... seemed that in SA people rarely had surveys ( more common now). Anyway we found some issues we were not happy with so pulled out. The owners refused to return the deposit, as said we were nitpicking and the survey did not show anything major and looked fine to them. We had to pay a solicitor to ' remind' them that the clause specifically said survey to OUR satisfaction not theirs. We did get our deposit back but it took a while.

Also in a hot market we found that agents actively discouraged subject to survey clauses. Seems that people are happy to pay over the odds in some places without surveys..............

I've just looked up stamp duty for NSW and was astonished to realise that you pay nearly twice as much if you are a foreign buyer. I'm assuming this means someone not permentantly settled in Australia and not someone born overseas?

Also in a hot market we found that agents actively discouraged subject to survey clauses. Seems that people are happy to pay over the odds in some places without surveys..............

Absolutely, it depends very much on how hot the market is. Sellers' market.....you'll have to move very fast and in doing so you'll probably have to take more risks. You're also more likely to get vendors deleting things like cooling off periods from contract and again putting more risk on you

Buyers' market......the shoe is on the other foot, and you'll be able to insert clauses in contracts to reduce your risk, probably; if you're the only serious prospect the vendor has, they pretty much have to go along with it.

I've just looked up stamp duty for NSW and was astonished to realise that you pay nearly twice as much if you are a foreign buyer. I'm assuming this means someone not permentantly settled in Australia and not someone born overseas?

Applies to non-residents. If you're PR you're OK.

Was brought in recently (last year) because of media beat-ups about Chinese buyers buying everything that moves in Sydney. Federal government whacked the FIRB permission charges up (I think to something quite unreasonable, like about $5K or something?), state government doubled the stamp duty.

Classic case of knee-jerk legislation that doesn't achieve its outcome. Most Chinese buyers who were bringing foreign cash over to buy did it through local friends, family or similar agents anyway. So that still goes on, not hard to avoid such rules if you're rich enough and minded to do so