Welcome to part 8 of our Buy Property in Australia from Overseas Series. This week will look at contracts and deposits when buying an Australian property from overseas. (To start at the beginning of the series, read Part 1: Real Estate Industry Professionals Foreign Investors Should Deal With).
When you put an offer in on a home or piece of vacant land, you will need to pay a deposit and then, if you’re awarded the property, you will need to fill out the necessary contracts. Your estate agent will let you know the required deposits and help you fill out all of the contracts from start to finish.
The Offer Contract and Deposit
The very first contract and deposit you will make is when you decide that you’d like to make an offer on a home or piece of property. You will need to fill out an offer contract that outlines your offer price and any contingencies. For example, maybe you want a piece of property that has a lot of trees and shade. To insure these trees aren’t cut down, you may send in an offer with the contingency that the seller will not remove the trees.
You may need to put in a good faith deposit with your real estate agent to show the seller that you’re serious about the offer. This is usually a small amount, and at times you may not need it. If the seller refuses your offer, you will get a refund of the good faith deposit. If the seller accepts your offer, you will need to pay a larger deposit, usually 10%, in order to continue with the sale.
Once a seller accepts your offer, the real estate agents involved in the transaction will begin drawing up the documents needed to complete the sale. It usually takes anywhere from 30 to 90 days to go from making an offer to owning the property. There are a number of things covered in the initial contract, so it’s important that you and your real estate agent discuss each detail carefully. The most common things include the price, expected closing dates, any cooling off period that you may have in case you change your mind, and description of the property.
Since overseas buyers often have to purchase brand new property or vacant land on which to build, common things such as vacancy and chattels are not included. However, if you’re purchasing a large building to renovate, your contract will include information on how soon the property must be vacated, whether any fixtures are not included in the property price, and how you will receive the contracts necessary for any leased chattels on the property.
Before closing on the property, you may want to have an inspection done on the property for either damages or insects. Your agent can help you draw up a contract that states the terms of the inspection results. Some buyers’ want the selling priced reduced or the repairs fixed if an inspection turns up something bad. If purchasing vacant land, you may also want your agent to help you procure a copy of the land survey to insure that the property description on the sales contract and the survey match up. Once you have all of the contracts signed, you will provide the rest of the payment and the property is yours.
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