Common Questions When Buying Property

Man and lady sitting on the floor thinking of common questions to ask conveyancer when buying property
Updated: July 7, 2023
First Published: May 19, 2022

Buying a new property is exciting! For first home buyers, this is a major life milestone. For seasoned investors, this is another stepping stone towards self-funded retirement.

We know the conveyancing process can be stressful and confusing – even if this is your tenth purchase! Open House Conveyancing are experienced at assisting clients and we take time to explain the process in simple legal terms.

We have put together this list of common questions when buying property.

9 common questions when buying property
Image: 9 common questions when buying property

I have found a property – now what?

Congratulations on finding a property! When your offer has been accepted by the vendor, you should tell the real estate agent that we are acting on your behalf. They will send us a sales advice and the marketing contract.

After that, we will reach out to you to discuss the next steps. We always highly recommend having us review the contract before you sign anything.

What happens when you review the contract?

We will make sure the deal is fair and that there aren’t any nasty surprises in the fine print.

We will explain (in simple terms) the clauses in the contract and any other matters that may impact upon you if you purchase the property (such as covenants and easements, and any planned developments in the local area). 

All our contract reviews and negotiations are completed by a property law solicitor. You will have full access to a property lawyer to explain the terms of the contract and provide advice on your purchase.

What searches do I need?

You should organise a building and pest inspection, bank valuation and if it is a strata property, an inspection of the strata records.

We will recommend any additional searches we think are important after we review the contract.

I have been asked to pay a “holding deposit”. What’s this?

Sometimes the agent asks you to pay a holding deposit when you make an offer. Paying a holding deposit shows the agent and vendor that you are serious about buying the property.

But, paying a holding deposit does not mean the seller is guaranteed to sell the property to you. The agent may still hold open homes and the vendor may accept a higher offer from someone else.

Until the contract is signed by all parties and formally exchanged, the vendor is free to sell the property to someone else, even if you have paid a holding deposit.

When should we arrange finance?

It is very important to organise finance as soon as possible because the process can sometimes take a few weeks.

We recommend you speak with your bank or a broker about getting your loan pre-approved before you start house hunting. After you find a property, your bank will book a valuation of the property and, if they are happy with the house/unit, your loan will be formally approved.

What is gazumping?

Gazumping is when a buyer has their offer accepted and they spend money obtaining advice and undertaking searches in respect to the property (such as a building inspection), only to find out later that the seller has accepted a higher offer from someone else. 

The buyer loses the property and the money spent on obtaining advice and undertaking searches. 

Whilst this can be very disappointing and frustrating, the seller is within their rights to obtain the best price possible for the sale of their property. 

Open House Conveyancing can advise you on things you can do to minimise the risk of being gazumped.

What does exchange of contracts mean?

Exchange of contracts is the point when both the buyer and the seller sign and exchange contracts. 

Prior to exchange, both the buyer and the seller can change their mind and not proceed with the sale, despite any verbal agreements. 

Buyers should be aware that any expenses occurred prior to exchange of contracts may be lost if the seller decides not to proceed.

How much stamp duty do we have to pay?

This is one of the most common questions people ask when buying property. Stamp duty is payable by the purchaser on all real estate purchases. The amount payable is set by the government and is dependent upon the purchase price. 

Some people are eligible for a discount or an exemption from stamp duty. If you are a first home buyer, you may be eligible for the First Home Buyers Assistance Scheme. This means you either pay less stamp duty or you don’t need to pay any stamp duty. Further information is available from Revenue NSW or on our website.

Where can I get more information?

Open House Conveyancing is available to offer support and advice for purchasers. 

We will help ensure that the purchase runs as smoothly as possible. 

Contact us on 1300 001 137 or send us an email.

*last updated 7 July 2023

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This article is intended to be general information only and is not legal advice. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article. The content is current at the date of publication.
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