🏠 First Home Buyer Series : Part Seven
Time to lawyer-up!
Lawyers are essential when you borrow money and buy a home. Their job is to protect you and handle all the legal and financial paperwork. The quality of service and advice, and level of costs varies significantly between lawyers so, if in doubt, ask around.
Where the lawyers come in…
Sale & Purchase Agreement – A legally binding contract between you and the seller to purchase the property. Setting out all the terms and conditions of the sale including the price, any chattels you are buying with the property and other conditions such as if your offer is subject to another property sale (not likely for you first home buyers), a builders report, your deposit amount and the settlement date. This document gives you and the seller the certainty about what is going to happen and when. Your lawyer or the real estate agent will have copies of a sale and purchase agreement for you to submit your offer (you can also purchase this online). Once you are ready to put your offer in writing, you should have your lawyer check over this document before signing to ensure you fully understand your obligations and any conditions or clauses.
Conveyancing – This is the transfer of the legal title of the property from one person to another and (if applicable) registering a mortgage on the title. A typical conveyancing transaction has two major phases: the exchange of contracts and completion. You will need to visit your lawyer before the settlement day to sign an authority for your lawyer to transfer the title and your finance agreements arranged by the lender or your mortgage adviser, as well as providing proof of ID so they can verify your identity. Your lawyer will also require proof that insurance has been arranged to take effect from settlement day.
Pre-Settlement Inspection – While it is your responsibility to arrange a pre-settlement inspection with the agent, your lawyer will be able to help should any issues arise. If you find any damage that wasn’t present when you signed the sale and purchase agreement or any of the agreed chattels are missing/not in the same condition as agreed, you should contact your lawyer to find out what options are available to you and they will negotiate with the seller’s lawyer to rectify the issues.
Settlement Day – Your lawyer will work with all parties involved on settlement day to make sure all paperwork and money transfers happen smoothly. Your lawyer manages settlement, and there isn’t anything for you to do if all documents have already been signed a few days prior to settlement day. Your lawyer will pay the purchase price to the seller’s lawyer and ensure the ownership of the property is transferred over to you. Once this has all been completed, your lawyer will let you know so that you can collect the keys to your new home!
As you can see, the legal side of purchasing a property needs specialist attention, which is why it is essential you have a good lawyer on your team. We work with many lawyers and legal firms in our line of work and know some good ones if you want a recommendation.
Next week we will look at the different ways to structure your mortgage when buying your first home… stay tuned!