Its My Home : 2016
IT’S MY HOME 9 6ARRANGING THE DEPOSIT If you are paying the deposit from your own funds, you can generally use a personal cheque or a bank cheque. If part of the deposit is coming from your home loan (eg you are using LMI and have less than the 10 per cent deposit usually required when contracts are signed), you may need to use a deposit guarantee (sometimes called a deposit bond). This is a substitute for the cash deposit and is a guarantee issued by an insurance company to pay the deposit to the vendor should you default under the terms of the contract or fail to proceed with the purchase. Deposit guarantees can be organised at the same time as your home loan so speak to your lender or broker who will help you to arrange this. 7CONTRACTSAND LEGAL WORK Do your research and speak to several real estate agents in order to find a reputable conveyancer or solicitor that meets your needs. Your, and the vendor’s, conveyancer or solicitor will check the documentation for any problems with the property or the deeds at this stage and begin drawing up the contract for the property transfer. Ask your solicitor or conveyancer to explain all items within the contract so that you understand its contents before signing. DIY conveyancing kits are available, but most people leave it to the experts and use a solicitor or a conveyancer to do the work for them as there is a lot at risk. Conveyancers will have completed hundreds of property transactions and know the hidden traps to watch out for, like finding out that someone has planning permission to build a 10-storey office block next door! The contract will contain a settlement period which is the length of time before you take legal ownership of the property. This can be negotiated, but will need to be agreed to by the vendor prior to the auction or signing of contracts. Many lenders will require home insurance to be taken out from the time contracts are signed. Even if your lender doesn’t require it, it can be a good idea to take out home insurance at this time to help safeguard your interest in the property. Once all questions have been answered, your conveyancer or solicitor will usually set a date and time for you and the vendor to sign contracts and to pay your deposit. The deposit is usually placed into a trust account held by the real estate agent until settlement. 8SETTLEMENT The date of settlement is usually four to six weeks from the time contracts are exchanged. This is the date you take legal ownership of your new home. Your solicitor or conveyancer will arrange a time and place for settlement to occur with the vendor’s solicitor and any other interested parties, such as your lender. The balance of the purchase price will need to be paid on the day of settlement. Your solicitor or conveyancer will arrange this with your lender who will take the balance of funds to settlement. Generally, the contract of sale will require the vendor to deliver the property to you in the same condition it was in on the day of sale, except for fair wear and tear. It’s a good idea to ensure your contract allows you to conduct a final inspection just before settlement. You can arrange this inspection with the real estate agent. If anything is not working or has been damaged, discuss it with the real estate agent and your solicitor or conveyancer prior to settlement. Once settlement has occurred, the vendor’s solicitors will contact the real estate agent who sold you the property and advise them to give you the keys. Your solicitor or conveyancer will also contact you and confirm settlement has taken place. Time to celebrate! LMI CAN ASSIST YOU TO PURCHASE WITH JUST A FIVE PER CENT DEPOSIT Pictures:Shutterstock.