Select Conveyancing

Are you curious about using your equity to invest?

What is equity?

Home equity put simply is the difference between the current market value and any loans (debt) held against it. It is the amount of your home that you own outright and the amount that you can potentially use to invest.

What can I do with it?

Remember that you need to be able to afford to pay it back, so the bank will asses you based on your home value, income and expenses. While you may have a lot of equity, you may not have access to all of it at once.

• Use it as a deposit on an investment property
• Pay for a renovation
• Invest in shares
• Buy a car or go on a holiday

Buying an investment property is generally a good investment when you do your research and look for a property that can expect good returns and growth over time. You can include the expected rental to help you to service the loan and over time you will gain equity in that property. This new equity can be used to buy more investment properties.

Calculating your equity

Let’s say your home is valued at $1million and you owe $500,000. You have an equity of $500,000. Banks will generally lend you up to 80% of the value of your home so you have the potential to access $800,000 less what you already owe which leaves you $300,000. It is this $300,000 you can use towards a new investment. Remember that you do need to show that you can afford the new amount – If you are buying an investment property you will have rent to help you with the affordability calculations.

Once you have your approval to buy you can start looking for your investment. Speak to Nicola @ Select Conveyancing for all your conveyancing needs.

Always make sure to gain independent advice based on your circumstances to ensure you feel comfortable with the investment that you are making.

Are you looking for tips on investing in property?

When it comes to investments, property remains one of the safest choices long-term. You may be investing from a distance and renting out your property. Or you may be buying and living in it while you renovate to sell in the future. Either way, keep reading and get in touch with Nicola at Select Conveyancing for your all property conveyancing needs.

Know how much you can spend

Before you invest in property you need to know exactly how much you can afford. This is done by both understanding your cash flow and going to a lender for pre-approval of your investment loan. You can then go looking for properties with confidence and knowledge.

Know your costs ongoing

Property can be expensive – Council rates, insurance, maintenance and if you are in a strata property there are strata fees. When you are renting out your property you need to keep on top of maintenance and ensure that the property is in a great condition for tenants.

Know the areas

Buy in an area that will have growth. If you are going to be renting out your property you want to make sure that there is a good demand for rental properties. Looking for a property that is close to transport and schools will give it more appeal.

Know your investment goals

Are you looking to flip the property – renovate and sell? Or are you looking to hold the property long term?

Know the mistakes to avoid

It is very easy to get carried away so here are some things to remember

• Do your due diligence
• Decide based on facts not emotions
• Try to stay under your borrowing limit
• Research the location
• Don’t rely on rental income to cover everything, you may have unexpected costs
• Know the tax deductions you may gain
• Realise that property is usually a long-term strategy

Happy property buying – Nicola, Select Conveyancing Lane Cove.

For many people buying a unit is an affordable way to get into the property market. Units are also great if you are not interested in looking after gardens and lawns. They are perfect for people with busy lifestyles and if you are planning on living close to the city centre they are much cheaper than a house.

All units will vary in size and the facilities that are included can come with hidden costs. Here are a few areas to consider when you are buying:

Strata Fees

Strata fees are an ongoing cost when you buy a unit. Strata Fees are levies which are generally paid quarterly to cover the cost of repairing and maintaining the units blocks common or shared areas. You will pay based on the square meters of your unit and the expenses of the property. If the property has a pool, gym, lifts etc. the fees can be quite costly.

• What are the owner’s strata fees
• Is there a maintenance fund
• Is there an ongoing debt
• Are there any planned building works

Owner’s corporation

• What are the pet ownership rules
• Common area rules
• What are the meeting requirements
• Ask if you can view minutes from a recent meeting

Nearby Facilities

• Is there a local park
• Nearby shops
• Restaurants, cafe’s and bars
• Public Transport

Parking & Storage

• Does your property have a car space or garage on the title?
• Is it single or double?
• What storage do you need?

Neighbours

• Ensure you walk through the property prior to purchase.
• Ask about the number of renters to owners within the property.
• Does it seem noisy, smelly, messy, dark!
• Is it a security building?

Structure and layout

• Check for any cracks, mould or broken sealants.
• What are the walls made of and are they insulated well?
• Is there carpet or floorboards?
• Remember that renovating a unit is not always easy and changing the layout is rarely possible.

At Select Conveyancing, we are here to help you through the buying or selling process – Contact us to discuss your needs.

Have you heard the term – Sunset Clause?

Did it leave you asking…

What is a sunset clause

To put it simply – It is a time limit that is put on the validity of the contract. Therefore if the settlement has not taken place by the end date both parties can legally walk away from the contract. Plus the buyer is entitled to receive their deposit back in full.

It is used commonly in 2 ways

Off the plan – The clause in an off the plan purchase states the date when the developer must finish the project. It also states that if the project is not finished by that date the buyer can walk away and get their deposit back in full. In most cases, this date is well outside the expected time frame and allows for common building delays.

Conditional sale – A buyer may make a purchase that is conditional on the sale of their current home. Here the seller inserts the clause date so they can decline the deal if the buyer takes to long to sell their home. 

Are there risks

There have been a few cases where developers have deliberately run over time so they can terminate the contract and attempt to resell at a higher price. There has been new legislation put in place in NSW to stop this abuse.

Do your research

As with all purchases of property you need to do your homework. If you are purchasing from a developer, make sure you look into their track record and industry presence. What are their past projects, see if you can contact people who have bought off them in the past and visit other locations they have developed.

Make sure you have a conveyancer look over the contract before you sign just so you know that you have not missed anything important beyond the sunset clause.

Contact Nicola @ Select Conveyancing for your next property purchase or sale.

Are you considering buying off the plan for your next property?

While it can be an exciting way to secure a home – How do you know if this is going to be the best choice for you? 

The Process

The thought of buying a property before it has been built is exciting and the fact that you will have a NEW never before living in home is even more exciting.

It can be cost effective as developers usually only require a 10% deposit but may be as low as 5% or as high as 20% and then the balance will be paid on the completion of the build.

Are you familiar with interpreting plans? Will the rooms be big enough? Will you be purchasing in a good position of the building if you are looking at apartments.

If it is an investment – what is the market going to be doing in 12 to 18months times when the build is complete?

The Positives

Stamp duty may be discounted, depending on when you buy. If construction has not started then the stamp duty is payable in the land value and not the finished property.

Getting in early may mean that you secure a great deal as developers need to sell a certain number before they can gain the finance they need.

Often the property increases in value while it is being built as the price of property grows over 12 months or more of construction.

The Negatives

The developer may not actually manage to get the build complete and you may lose your deposit if they happen to go bankrupt. Make sure you gain legal advise and do your research about the developer.

Often lenders will not fully approve your finance until the build is complete.

The final product may not be what you expected when you purchased off the plan.

Conclusion

Buying off the plan is not for everyone. It can be better suited to investors who have time to wait and as they are not planning on living there, the process can be better. Saving on stamp duty and the potential of the property increasing in value are two big positives.

Ensure that you get good advice and do your research before you commit to any purchase.

Contact Nicola at Select Conveyancing if you have any questions.

Gazumping will occur when an agent or seller accepts an offer you make to buy a property at an agreed price but then sells the property to someone else, usually for a higher price. As the agent is legally obliged to pass on to the vendor any further offers received for the property up until the exchange of contracts, gazumping can occur.

In NSW, a property sale is binding for the seller and buyer when contracts are exchanged between the two parties. The exchange occurs when the seller signs their copy of the sale contract; the buyer signs their copy, and the two parties exchange their signed contracts. The 10% (of purchase price) deposit is also paid at this time. 

Unfortunately, if you are gazumped, the agent nor the seller is obliged to compensate you for any money you may have spent on legal advice, inspection reports, finance application costs or inquiries. Only your expression of interest payment must be refunded to you in full.

You can protect yourself

• Have your finance ready so you can pay the 10% (of the purchase price) deposit
• Have the contract of sale reviewed as quickly as possible by a professional
• Present your offer in writing and ask to see confirmation of other offers (although the agent does not have to oblige)
• Aim to exchange contracts as soon as possible and offer to waive the cooling off period, gain professional advice about this process first.
• Consider that you may have to offer more on a property under high demand
• Be aware that it is ultimately the vendors choice of who they sell to and it may not always be the hight price

Note: Gazumping cannot occur after a finalised auction

Always make sure you have your contracts reviewed by a professional – contact Select Conveyancing Lane Cove. 

Reference: NSW Fair Trading

When you are buying a property in Australia it is a tax that is payable on your purchase! How much it is and who gets the money are some interesting topics to discuss.

So you have found the perfect property, how much is stamp duty going to cost you?

Remember that as a conveyancer I am here to provide you with all the below amounts and dates of payment. This is just to give you an idea of the costs that may be involved in your purchase.

Who has to pay stamp duty?

• Every buyer of real estate has to pay stamp duty.
• A transfer of property incurs stamp duty.
• A mortgage incurs stamp duty.

Is there ever an exemption?

State governments can offer exemption when there is a change of hands following divorce or death and often when it is between family members.

First home buyers in most states receive a concession or exemption.

When do you pay?

NSW – Within 3 months of settlement

VIC – Within 30 days of settlement

QLD – Payable within 30 days of settlement

ACT – Payable within 28 days of settlement

WA – Within 2 months of settlement

SA – Payable on settlement day

NT – Within 60 days of the transaction or settlement, whichever is closer

TAS – Payable within 3 months of transfer but generally on settlement

How much is it?

The cost of stamp duty is decided by the individual state and territory governments. This is why it can vary depending on where you are purchasing a property.

There are also concessions in some states for first home buyers and the rates can vary if you are buying land only without a house.

Have a look at the links below to see the calculators for your state.

NSW – Buying or Selling Property NSW revenue

VIC – Buying or Selling Property VIC revenue

QLD – Buying or Selling Property QLD revenue

ACT – Buying or Selling Property ACT revenue

WA – Buying or Selling Property WA revenue

SA – Buying or Selling Property SA revenue

NT – Buying or Selling Property NT revenue

TAS – Buying or Selling Property TAS revenue

What is the money used for?

Typically it is added to the budget for the government of that state and helps to pay for health, transport, emergency services and more. If you are curious just have a look at the pages above for further information.

If you are curious about what stamp duty will be payable on your next purchase – speak to Nicola at Select Conveyancing

If you are buying or selling a property you may ask yourself should I choose a conveyancer or lawyer!

The answer to this question really comes down to your individual circumstances that may surround the purchase or sale.

• Is it just a sale or purchase?
• Does it have other legal transactions associated?

Both a conveyancer or lawyer are suitable for all aspects of the purchase or sale of a property. You may, however, have other legal requirements attached to the sale, such as wills, divorce proceedings and more that may lead you to need a lawyer.

Affordable

• Generally, a conveyancer may be more affordable than a lawyer. Ask about our rates.
• Both may offer fixed fee services but you may find that with a lawyer you have a junior or an assistant doing the work for you.

Focus

• The conveyancer’s focus is solely on property law as it is their one speciality.
• You will likely deal with the conveyancer (Nicola Lacey) directly rather than an assistant.
• The lawyer needs to have knowledge of all the different laws pertaining to the services they offer.

What does a conveyancer do

Before the contract

Sellers – have their conveyancer prepare a draft contract to check ownership, rates, charges, restrictions, certificates and various other legal requirements.

Buyers – view a potential property, perhaps receive a contract and have their conveyancer review it for them prior to or during the offer process.

Exchange of the contract – binding the buyer and the seller

Sellers – Provide a signed copy of the contract, contracts are checked and confirmed to be identical and contracts are exchanged between both the seller and the buyer. Both the buyer and the seller are now legally bound.

Buyers – The deposit is given usually to the real estate agent to be held in trust, and a signed contract is given along with the deposit. Contracts are checked to be identical and both the parties are bound by the contract.

Stamp Duty

In NSW stamp duty is payable, it is liable from the day that the contracts are exchanged. Stamp Duty must be paid within 90 days of the exchange, it can, however, be paid in full prior to settlement or at settlement if required.

Cooling off or 66W certificate

It is a legal requirement to have a cooling off period of 5 business days. This time allows the purchaser to change their mind but if they do then they must forfeit 0.25% of the purchase price. For example, on a $500 000 property, this would be $1,250.

A majority of sellers request a 66W certificate – this waives or shortens the cooling off period and speeds up the exchange and settlement process.

Inspection of the property

The purchaser of a property is able to have a prepurchase inspection within the 3 days before settlement. This inspection is to ensure that the property is going to be left in a clean and clear condition and all possessions have been removed. It is at this time that the purchaser can pause the settlement until any problems are rectified/resolved. The settlement may even continue with the buyer withholding part of the final payment until any problems are resolved.

Settlement

This is the party of the process where ownership exchanges hands. prior to this moment the conveyancer will be completing all the required checks and finalising figures for the settlement. The transaction will be registered and the transfer official.

Keys – Immediately following settlement, keys, remotes, security codes and more will be handed over. Generally, the seller will have given all these items to the real estate agent who completed the sale.

If you have any questions about this process – please contact Nicola at Select Conveyancing

Sydney property prices are tipped to continue dropping for the rest of 2018 and perhaps even beyond. The ANZ has tipped that prices could fall a further 10% in the coming months.

What does this mean

It means that it is the perfect time to be buying. If you are in a position to buy and you can get the finance you need there is potential for a great buy when it comes to Sydney property.

With the lenders tightening their financial strings many potential buyers have dropped out. So with less demand, the prices drop and this is the biggest drop since the GFC in 2008.

According to news.com.au – Figures showed the number of buyers actively looking for a home dropped by nearly a quarter over the past year, pushing the median price of a Sydney house down 14 per cent and the median unit price down 7.9 per cent.

So where does that leave potential buyers

If you are a potential buyer who can use the equity in your home you are well positioned to get a great investment property purchase. Interest rates are low and you won’t have to face some of the lending restrictions of people without home equity. This combination of lower property prices, built-up equity, tightened lending restrictions and low-interest rates leaves it open for investors in the right financial position to think about refinancing their current mortgage and look for new opportunities. Are you looking?

Buying Property

Buying property is a great way to invest in your future. We are fortunate in Sydney as there is long-term consistent growth so you can expect that over time your investment is going to grow in value. Have a read through our other articles to find more hints and tips about buying property and contact us for the conveyancing on your next property purchase.

Are you a first home buyer looking to get into the Sydney market?

Did you know that the average time it takes for couples to save their 20% deposit is 6 years and 7 months and twice as long as a single? This is to purchase an entry-level house and based on average wages.

Sydney remains the city with the highest property prices in Australia. This means that on average it is taking 8 months longer than Melbourne buyers and more than double the time for buyers in Hobart or Darwin.

Saving to buy an entry priced unit (costing $593K) has remained at 5 years nine months for many years.

Currently

Property is currently seeing less urgency for buyers to snap up the first property they can. The availability of property is also at their highest in 5 years. What this means is that when you are shopping for your property, there is more choice and more time to make the right decision.

Options

With Sydney property growth many buyers are able to get into the market with just a 5% or 10% deposit and pay the mortgage insurance. With the market cooling off a lower deposit is not always the best choice.

Advice

Make sure you seek advice based on your individual circumstances and try not to overcommit yourself in the property market. Know what options you can take up relating to being a first home buyer – e.g. NSW exemption of stamp duty for property under $650K.

When you are ready to purchase your property – Select Conveyancing will help you through the process to make it as easy as possible.

Source of timelines – Domain Property