We invite you to check our website from time to time, for new Questions and Answers.


What is a property cycle?

What should a buyer’s agent minimum qualifications be?

Why deal with a REINSW member?

Is buying a property the same throughout Australia?

How long will it take to find a property?

What is “Exchange of Contracts”?

What is a “Cooling Off Period”?

Settlement.

What is the difference between joint tenants and tenants in common?

Is the fee charged by a buyer’s agent tax deductible?

What is a median price?

What is a strata scheme?

What is Loan to Valuation Ratio (LVR)?


Property cycle?
Property values usually follow a cycle of growth, a slowdown, a bust and an upturn. History shows this occurs every 7 to 10 years.

What should a buyer’s agent minimum qualifications be?
A buyer’s agent must be the holder of a valid real estate agent licence.
A buyer’s agent must have professional indemnity insurance.
A buyer’s agent must be independent of any selling agent, builder, or developer.

Why deal with a REINSW member?
There are many advantages in dealing with a member of the Real Estate Institute of NSW.

• REINSW is one of the largest professional associations for real estate agents in Australia.
• REINSW members follow a Code of Conduct that outlines the ethical duties and responsibilities of real estate agents. It encourages agents to follow best practices and to be fair and responsible in their agency practices.
• If you have a problem about the behaviour or actions of an REINSW member you can take your concerns to the REINSW for investigation.

REINSW has an Accreditation program. This means you can be assured of experience and skills in a specialist area when you choose an agent who is accredited.

Is buying a property the same throughout Australia?
The fine print in the contracts is different from state to state. The process also differs from state to state e.g. in some states the contract is physically “exchanged” and in others a single contract is signed by both parties. The cooling off period also differs from state to state.

How long will it take to find a property?
The average time from engaging our service to exchanging on a property is 6 to 8 weeks for an investor and slightly longer for an owner occupier. Both are dependent on the specific requirements and market conditions.

What is “Exchange of Contracts”?
The contract sets out the terms and conditions of the sale including the fittings such as blinds, curtains etc and any items excluded from the sale. The solicitor or conveyancer will examine the contract carefully. There are two copies of the Contract for Sale - one for you and one for the seller. You each sign one copy before they are swapped or “exchanged” and the deposit is handed over. Only when both the seller and the buyer have signed the contract and exchanged copies do you both become bound by the contract. The contract will stipulate the deposit amount and who will hold it.

Once all parties have signed a contract it cannot be altered or changed. However, there may be unforeseen changes of circumstance which affect either party to a contract between signing and settlement that may require a change to be made to the contract. Provided all parties agree, changes can be made.

What is a “Cooling Off Period”?
There is a 5-business day cooling off period unless you have bought at an auction or you have waived the right to the cooling off period. You need to obtain legal advice regarding the benefits and also the obligations in waiving the cooling off period. The cooling off period follows the exchange of contracts allowing time for searches, obtaining reports and confirming finance. If you do not continue with the sale, you will forfeit 0.25% of the purchase price from the deposit you have paid. Discuss with your legal adviser your rights and obligations during the cooling off period.

Settlement
Settlement occurs when the buyer pays the balance of the selling price. Adjustments are made for water, council rates and strata levies (if applicable) and any outstanding mortgages are paid out by the seller from the purchase price. The buyer becomes the legal owner of the property after settlement.

The period between the exchange of contracts and settlement is usually four to six weeks, although either party may ask for a longer or shorter settlement period prior to exchange. Make sure the settlement period suits your needs prior to committing to the purchase. Be prepared as last minute issues that arise may delay settlement by hours or days.

What is the difference between joint tenants and tenants in common?
Property may be owned under joint tenancy or tenancy in common. Joint tenancy is ownership in equal undivided shares. The most important feature of joint tenancy is known as survivorship; on the death of one joint tenant, that person’s share passes to the survivors so that they remain joint tenants of the whole. Joint tenants are regarded collectively as a single person in respect of their dealings with others.

In the case of tenancy in common, although each has an undivided share, such share is distinct and separate. The interests need not be equal; thus ‘A’ may have one undivided third share, and ‘B’ two undivided third shares of the same property. The most important feature is that the share of a tenant-in-common may be separately disposed of during a person’s lifetime, or by will. On death it passes, not to the other tenants-in-common, but by will, or by the laws of intestacy.

Is the fee charged by a buyer’s agent tax deductible?
You should consult your accountant for advice.

What is a median price?
The median price is the middle price in a series of sales, where half of the sales are of lower value and half are of a higher value. For example, if 15 sales are recorded in a suburb and arranged in order from lowest to highest value, the eighth sale price is the median price.

What is a strata scheme?
A strata scheme is a building or collection of buildings where individuals each own a part, such as an apartment, villa or townhouse, but where there is common property, such as windows, roof, foyers, paths, external walls, floors, fences, lawns, gardens and driveways, which every owner shares ownership over.

The maintenance and repair of these common parts is usually the responsibility of the owners’ corporation. There are a number of rules or by-laws relating to living in a strata scheme.

What is Loan to Valuation Ratio (LVR)?
The Loan to Valuation Ratio (LVR) refers to the ratio between the size of your loan and the value of your security property. It is calculated by dividing your loan size by the value of your security property  e.g. loan size $240,000, property value $300,000, LVR = 80%.