Buying in QLD? Here’s what you need to know
As Sydney house prices continue to soar, the dream of owning a home becomes more distant. Many people struggle to raise the necessary funds to contribute to a deposit and for payment of stamp duty and are considering alternative options to increase their chances of buying a property.
With properties in Brisbane half the price of those in Sydney, it is no wonder that there is a northerly migration towards the Sunshine State. With sunny shores, a buoyant economy and a median house price of $550,000.00, it is an attractive investment option for a lot of people.
Here we discuss 3 key legal differences between the process of buying a property in NSW and QLD:
Contracts are subject to Finance
In QLD, most Contracts are subject to finance. Buyers generally have 14 days after exchange of contracts (called countersigning) to obtain satisfactory loan approval to purchase a property. In the event that they are unable to obtain an unconditional approval to purchase the property, they can terminate the Contract and recover any deposit payable. This is quite different to NSW, where there is a statutory 5-business day cooling off period, which is required to be waived most of the time. In the event a Buyer rescinds the Contract within the 5-business days, they are required to forfeit 0.25% of the purchase price on a Property.
Contracts are subject to satisfactory Pest and Building Inspection Reports
Contracts which include the sale of a house will also be subject to a satisfactory pest and building inspection. Unlike NSW, where Contracts are not subject to anything except a statutory 5-business day cooling off period. Within 14 days of countersigning, a Buyer may obtain a satisfactory pest and building inspection report and if it discloses major issues, a prudent solicitor will advise on whether a price reduction is possible, or liaise on your behalf to ensure that the issues are rectified prior to settlement. As with the finance condition, if the Contract is terminated on these grounds, all and any deposit paid is recoverable.
The Seller has an automatic right to terminate the Contract if settlement does not occur on the settlement date requited under the Contract, which is usually 30 days from countersigning. This is much shorter than the standard 42-day settlement period commonly seen in NSW. In both states once contracts are terminated, you forfeit the full 10% deposit on the Property. This differs to NSW, the right to rescind the Contract only arises if the Vendor serves a Notice to Complete requiring settlement within 14 days of the service of the Notice.
If you are thinking of buying property in QLD, or have purchases a property and require more information regarding the next steps, please contact one of our specialist Property Lawyers. Our firm has extensive experience acting for clients across a different range of QLD transactions, including the buying, transferring and selling of existing and off the plan property.