Property market guide: What happens after you buy a home?

A locked-in price and signed contract don’t necessarily mean smooth sailing ahead. Here’s what you need to know after you buy.

Buyers are back in action this spring, with more stock on the market relieving pressure from competitive market conditions earlier this year.

But for first-time and inexperienced buyers, it can be tricky to know what’s involved after a seller accepts your offer.

From the costs and requirements leading up to settlement, to the legal moves that can keep your home dream from turning into a nightmare, we’ve asked the experts what to expect after you’ve signed a contract.

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It can be tricky to know what to do after your offer has been accepted.

HOW LONG DOES SETTLEMENT TAKE?

Once you purchase a property, settlement will usually takes between 30 and 90 days.

Property expert and buyer’s advocate Nicole Jacobs said settlement periods could also be shorter or longer if that was agreed before signing the contract.

On the day you sign the contract, you’ll need to pay a deposit which ultimately gives effect to the purchase. This is typically by cheque or an electronic funds transfer.

The remainder of your deposit is paid on settlement day and this date should be stipulated by the vendor in the contract.

You’ll want to know the differences between buying at auction and through private sale.

It’s also important to note the differences between buying at auction and through private sale.

When purchasing privately, you’ll have a cooling-off period in most states from when you sign the contract, which lets you void the sale without losing your deposit.

At auction, sales are unconditional and final, so you must be certain you’re happy to go through with the sale if you do place the winning bid.

Ray White Oakleigh auctioneer Robert Cincotta added that buyers should be aware there can be last-minute adjustments to settlement.

“If any owners corporation rates are paid by the current owner before the buyer takes over, they’ll have to adjust the settlement and speak to their conveyancer to account for any extra money that needs to be paid,” Mr Cincotta said.

DO YOU NEED LEGAL ADVICE?

First and foremost, you’ll need a solicitor or conveyancer to check contracts and smooth out any issues prior to settlement.

They will also meet with your lender and the vendor’s agents on settlement day to exchange documents, ensure the property title is transferred to your name, and remove any caveats.

Hope Earle Business & Property Lawyers partner James Hope said a caveat was lodged by anyone other than the vendor who might have rights to a property.

Mr Hope said a lawyer might also help you to organise your chosen utility providers, stamp duty payment and have your identity confirmed.

Plus, if you’re purchasing with a partner, friend or family member, a solicitor will help determine the type of share you wish to have with the other person — either joint proprietorship or tenants in common.

What type of share will you have if buying with another person?

As a joint proprietor, your share will automatically transfer to the other person if you pass away.

But with tenants in common, any remaining shares in your estate will be dealt with under your will.

“After you settle, one of the things you should think about is your estate” Mr Hope said.

“Update your will (and) ask your lawyer for an extract of the title too.”

Mr Cincotta recommended buyers have the property’s title checked out, which could usually be done via a section 27 document in Victoria or an equivalent in other states.

“This goes through requisition on title (and) any mortgage or caveats affecting the property if anyone owes money,” he said.

Ms Jacobs added that if you haven’t conducted your own building and pest inspection prior to signing the contract, you should ask your solicitor to make these conditions of the purchase. This may not be feasible if you purchase via auction.

WHAT CAN GO WRONG?

The most common thing that can go wrong with a home purchase is missing settlement. As a buyer, this can be caused by delays with finance or even a bank mix up, and depending which state you are in could mean paying penalty interest or even losing your deposit and paying damages if the vendor is unsympathetic.

If the vendor comes up short, some states allow buyers to terminate the contract and sue for damages.

In NSW and Victoria there are no real rights to impose penalties on the vendor — but they might agree to provide access to the property under license before settlement occurs.

Another could be that the property has been damaged between purchase and settlement. Mr Hope recommended having insurance to cover the home until the keys are handed over. “It’s a good idea to get building insurance as soon as you sign, because if the house burns down you might have a problem with settlement — particularly if the vendor is not insured,” he said.

Missing settlement is a common problem.

Sales contracts require the vendor to provide the house in the same condition as when you inspected it — which won’t be possible if there’s a catastrophic event.

In this case, most state’s provide buyers an opportunity to rescind their purchase and have their deposit returned — though there can be limitations on the time frame for this.

Mr Cincotta said he also saw issues when agents don’t properly communicate the terms of a sale.

“We always suggest when looking at a property or asking questions, to get it in email or writing and have a paper trail to protect (yourself),” he said.

Mr Cincotta also advised buyers to call their broker as soon as possible after purchasing at auction, to state the application process and formalise the loan.

“You don’t want to be caught by surprise with your pre-approval expiring on that day and having to go through that process again, as this may affect your borrowing capacity,” he said.

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