The most important stage of a property sale is the completion of the contract.
If the contract contains errors or the conditions applying to the contract are not attended to promptly, the buyer and seller can be hugely disadvantaged.
There are three more common issues which sometimes trip up the buyer or seller at the last moment of the contract process.
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First:
- Most people have conditions applying to a property sale contract, such as the requirement to obtain home loan approval by a certain date. If this hasn’t been met by the buyer, then the contract will default unless the buyer and seller agree to new conditions. Most sellers are accommodating but there is no obligation to be so.
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Second:
- There can be delays in obtaining finance approval from lenders even where the buyer can be confident of final approval. This can cause real problems for people who have not allowed enough time for this, particularly now that banks are much more thorough in processing a loan application.
Usually two weeks is sufficient time to obtain finance approval but an increasing number of lenders now require at least three or possibly four weeks. The best way to speed up the approval process is to secure early finance approval prior to making an offer.
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Third:
- Is not ensuring the correct name of the purchaser.
When there is more than one person buying a property, each person needs to be included on the contract. If one of multiple purchasers is missed on a sale contract and that person wants to be included on the contract at a later date, stamp duty may be payable.
An example might be a sale contract that includes the names of a husband and wife. The property purchased is an investment and shortly after completing the sale contract the buyers receive financial advice that only one name was preferable on the sale contract and that it should be amended accordingly.
This oversight may result in a hefty stamp duty payment due to a legal change in ownership, depending on whether the property is still under contract or has settled.
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Conversely, if you are the owner of a property and wish to add names to the ownership title, stamp duty is not usually payable if the transfer is on the grounds of ‘love and affection.’
For example, if you wanted to add the name of a de facto or married partner, stamp duty is not usually
payable, whereas removing a loved one from a title generally triggers payment. Adding children to the title will attract stamp duty.
These and other matters should be communicated to you by your real estate and settlement agents and illustrates the importance of using professional services when buying and selling property. This article was originally published on reiwa.com.au
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