You're sure to have many questions before, during and after buying a property. Below are just some of the questions and answers that I find help a lot of my clients in better understanding the process of what a Buyers Agent does, and how the buying process works.
What is a Buyers Agent?
In the way a selling agent or listing agent will represent the seller, or vendor, in the marketing, negotiation and sale of the property; a buyers agent will solely represent the buyer or purchaser in the sourcing, researching, negotiation and purchase of a property. By law, an agent must act exclusively for one party - the selling agent cannot represent your interest fairly and at the same time represent the seller as well; which is why employing the services of a buyers agent to solely represent the purchaser has become a necessary advantage.
What are the costs associated with a Buyers Agent?
No two property searches are the same and because of this I work using a fixed fee structure based upon the requirements, complexity, scope, and time frame of your search.
As a general rule of thumb, buyers agents charge 2% of the purchase price; meaning the more of your money they spend on the property, the more the buyers agent is paid. I promise my clients that I will save them money on their purchase from the get-go and carry that promise and transparency through to my fee structure. The cost of my services is agreed upon upfront before work on your search begins.
Payment for my representation and services is due following exchange of contracts; however there is a small retainer required to engage my services which is deducted from any balance owing at exchange.
Is a Buyers Agent fee tax-deductible?
In many cases, when purchasing for investment, the utilisation of my services could potentially be claimed as a tax deductible expense. Please check with your accountant or financial advisor for more information on a case by case basis.
How long is the agreement for and is there a limit to the amount of properties you will inspect, research or negotiate until we find the right one?
The agreement is drawn up for 6 months - however, should you require a expedited search or even an extended search, these requests can of course be catered to.
There is no limit to the amount of properties I will inspect, research, and negotiate; until we successfully exchange contracts on the property of your choosing. Until the contracts are exchanged, you are free to change your mind at any stage and my representation will continue up until we find the right property.
Is there a minimum or a maximum budget required in order to engage your services?
Not at all. I have purchased a range of land and property, from parking spaces to 6 bedroom beachside homes. My clientele covers all bases: from first time home owners to seasoned investors of fifty years. The benefits of my representation far outweigh any investment made in the cost of my services.
I am completely new to buying property. Can you help me arrange finance with a mortgage broker and assist me in finding the right lawyer to work with?
Absolutely. My connections in the industry span far and wide. I have a catalogue of experienced and trusted mortgage brokers and lawyers whom I work with on a daily basis who will work in unison with me in supporting you throughout your entire purchase. All of the lawyers I work with are committed to the purchase process and helping my clients and are able to review contracts on short notice even during the evenings, on weekends and even public holidays.
I am an Australian Citizen or lawful Permanent Resident earning an overseas income; are you able to assist me in securing finance?
Yes - one of the many benefits I provide is direct access to top-tier staff within the banking industry who are able to leverage a loan against your foreign income. Based upon my experience with previous clients, this amount has proven to be significantly higher than any loan offer they have received with any mainstream bank or mortgage broker.
I’ve noticed the prices agents are quoting (the guide price) differ greatly from what the property will eventually sell for. How can I be sure I am buying the property at the right price and how will your experience help me?
My experience in real estate comes from not only purchasing real estate; but also selling it. This is a huge point of difference between myself and most other buyers agents. My experience affords me invaluable insight in to how a selling agents mind works and how a vendor will view your offer.
The disparity between the guide price and what the property eventually sells for is something I take into account from the second I walk through the door. Regardless of what the agent is quoting, or what price they are advertising, I know from my many years in transacting real estate what the property’s true value is.
On any chosen property, I will conduct in depth price research and extensive due diligence , providing clear, concise and reliable evidence demonstrating the true value of the property. This process is put in place to ensure you are spending your money wisely and buying your chosen property for not only the right price, but the best price.
What are the various ‘titles’ of ownership: Company Title, Strata Title and Torrens Title?
Torrens title originated in South Australia under the supervision of Sir Robert Torrens, in the mid 1850’s. Torrens Title are now commonplace throughout Australia, and represent the transfer of a single certificate for an allotment of land. All dealings and ownership of land under the Torrens Title system are managed by the Titles Office. Torrens Title properties are not part of a managed or shared scheme, such as Strata or Company title.
A Company Title property is typically an older block of apartments (likely Art Deco) whose shareholders (property owners) occupy the building in accordance with the articles of the Company Constitution. Most Company Title buildings have now been converted to the Strata system; although they do still exist in suburbs such as Elizabeth Bay, Potts Points and Darlinghurst. The Company Constitution (the rules of the building which the shareholders/owners must follow) govern a Company Title property. The specifics of this constitution are normally unique, and providing there are no restricting rules, the property will present no problems in comparison to the modernised Strata system.
Most apartments and townhouses purchased in NSW will be governed by the Strata Title system. Strata Title is defined as ‘the formal ownership of property held within a Strata Plan’ or ‘a scheme of property ownership where each proprietor owns a part of the building and has joint rights with other properties over the land and other common areas’. Apartments under the Strata scheme will be accompanied by a Strata Report which must be reviewed prior to making an offer or exchanging contracts.
What is a Strata Report?
A Strata Inspection or Strata Report is a collection of books and documents, and AGM minutes, pertaining to a particular property and building. These notes and documents provide a valuable insight into the history of a property, as well as problems (either those rectified or currently ongoing) which could greatly impact the value of said property. In the case of ongoing problems, the new purchaser could inherit any upcoming cost of works or special levies, which will be apparent and detailed in the Strata Inspection Report. Issues that are not physically apparent from an inspection could be revealed in this report and it is vital that this report be reviewed prior to any purchase being made.
Will I have to pay ‘Stamp Duty’ and what is this?
Under NSW law, it is necessary to pay Stamp Duty on the purchase of land or property. This must be paid within 3 months from the date liability arises (in the case of residential property, from the date of exchange).
Are there stamp duty concessions?
Yes. On the purchase of residential property up to $650,000, no stamp duty will be payable providing this is your primary place of residence and you are an Australian Citizen or lawful Permanent Resident. This will not apply to landlords purchasing for investment. There are further concessions for purchases beyond this amount to help home owners.
Would I be eligible for the First Home Owners grant?
If you are an Australian Citizen or lawful Permanent Resident, and are buying or building your first home within Australia, and with the intention of living in your home within 12 months of settlement (taking ownership of the property following the exchange of contracts); you will likely benefit from the grant. This grant is not means tested and there is no restriction based upon your income or the area you intend on purchasing in. There are also no restrictions regarding the price of the property. However, should you be purchasing your home with another person; they too must meet the eligibility requirements.
What are the differences between auction, pre-auction and private treaty purchases?
An auction is the sale of a property which occurs usually in public (either on site at the property or in an auction room), and is conducted by a licensed auctioneer. The property will be sold under the hammer, on this day, to the highest bidder. The auction will normally take place after a 4-6 week marketing campaign which includes weekly open inspections.
Purchasing a property pre-auction involves purchasing “under auction conditions” but without waiting for the auction to take place. Normally, signed contracts are received at the agents office (or lawyers office), along with a s66W (waving the cooling off rights), and those buyers who intend to compete for the property will not be offered a chance to alter or increase their offer once submitted. The term “first in, best dressed” is often used.
A private treaty sale, which often occurs with an ‘off market’ purchase where no other members of the public are aware that the property is even for sale, is a sale directly negotiated between the seller and the buyer, or more normally, via their agents (the selling agent and the buyers agent).
What is a Cooling Off Period and how does a s66W certificate affect my purchase?
When purchasing residential property in New South Wales, the purchaser is benefitted by a 5-business day cooling off period. This cooling off period allows the purchaser to rescind their contract - even if signed and exchanged - and safely negate on their intended purchase. This cooling off period expires on the fifth business day following exchange of contracts, at 5pm (close of business). Should you withdraw from your purchase, whilst you will receive your deposit monies back, a payment of 0.25% of the purchase price will be due and payable to the seller (this is calculated as $250 per $100,000 of the purchase price)
A cooling off period does not apply to properties purchased at auction, or should you exchange contracts on the same day as the auction should you purchase the property after it has been passed in.
A s66W is a legally binding document which ‘waives’ your right to make use of the cooling off period. This certificate will be requested by most selling agents when purchasing a property prior to auction or using the private treaty method. Providing this document along with a signed contract will mimic auction conditions and make the purchase binding upon exchange of contracts, which is usually necessary to purchase a property prior to auction.
Following the exchange, when will I own the property? Is this settlement?
You will become the full legal owner at settlement. Settlement is the final stage of the purchase or sale following the exchange of contracts. Settlement is agreed as 42 days following the date of exchange in a standard NSW contract, however this can vary depending on prior arrangement between the vendor and the purchaser, or depending on the vendor or purchase situation at the time the contract is drawn up.
I have more questions; can we talk?
Of course! I'd love to. Please give me a call on 0410 943 983 or send me an email by clicking here.