Private Treaty or otherwise known as "By
Negotiation" is the commonest method by which property
is sold in S.A. Other methods are sale by Auction, sale
by Tender.
There are three types of Private Sale where the owners
are involved:
1. A full private sale is where all negotiations, representation,
advertising etc. are made by and with the owner, who is
also responsible for all aspects of the transaction. This
method if fraught with peril and many a seller and purchaser
in hindsight, wish they had assistance at some stage of
the transaction. 2. An owner presented sale where the owners show the
home, answer all the questions about the property, however
all other matters including negotiations, legal's and
contracts etc. are handled by a 3rd party - eg. ANREPS.
3. A private Auction. This is similar to 2 above, however
on the day set for auction, a licensed auctioneer/agent
conducts the auction on behalf of the owners. All documentation
is handled by a licensed agent, ANREPS or the auctioneer.
Real Estate Agency
When a property is being sold by this method, a real estate
agent acts on behalf of the owner who has total control
over the property. Your offer will be handled by the agent
who will present it to the owner (either verbally or in
writing) for their consideration. If the owners accept,
you are virtually bound to the contract, once committed
into writing and signed by all parties.
ANREPS
ANREPS is a licensed real estate agency which predominately
facilitates owner sales. An important part of the service
is to provide guidance to our sellers and buyers at a
fraction of the cost of an ordinary real estate agent.
To make an offer to our FOR SALE BY OWNER client, or you
require assistance, contact ANREPS. ANREPS handle all
the negotiations, contract, arrange all the legal's, right
through to settlement. See "Our Services".
Auctions
An auction is an option worth some consideration, and
will mainly depend on your location, what is on offer
and your personal circumstances. Not every property is
worth an auction.
Most agents will recommend an auction because it allows
the market to set a sale price, not the agent. Some agents
may be reluctant to give an accurate appraisal, as it
may offend the vendor and they lose the business. Also
the vendor will commit to an expensive advertising campaign,
all of which benefits the agent, not the vendor.
Tender
A Tender is mainly used for commercial or development
transactions, however there is a system being used within
the real estate industry that uses a similar process.
With this method the property is offered for sale without
a price being disclosed and offers are taken on the property
over a 3 - 4 week period. When all offers are in, the
property is offered to the highest bid - a bit like a
silent auction.
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Agency Agreements
An agency agreement is a legal binding document between
you and the agent. It sets out the rules of agency, authorised
expenses that the agent can incur on your behalf for which
you are liable for, (whether or not you sell), the term
of the agreement and of course - their commission.
Things to note are:
Do not sign any agreement unless you know what you are
signing;
You must be given a copy of the agreement as soon as is
practicable;
When you get a copy of the agreement - check it;
If the agent finds a buyer at or above the sale price listed
in the agreement and you decide not to sell the agent can
demand their commission;
If the agent finds a buyer and you do not have an agreement,
you do not have to pay any commission;
The agreement normally continues as a general agency after
the expiration date, unless terminated in writing.
Property brochures
It is common practice for agents and owners to provide visitors
with fact sheets about the property. Many fact sheets carry
some form of disclaimer stating that buyers should not rely
on the information contained therein, but make their own
enquiries as to the accuracy of the representations made.
For example, if the feature list given to you by the seller
says the roof is insulated, ask to see it or confirm that
it is indeed there. Check that the sprinklers work, the
air-conditioner, heater etc: BEFORE you make your offer,
and if there is anything you are unsure about, ASK.
Building Inspections
A pre-purchase building inspection report from a good building
inspector will reassure you that the property is structurally
sound and there are no serious faults. Many inspectors also
pinpoint areas which are likely to need attention in the
near future. This is normally done during your "Cooling
Off" period. This then allows you to simply change
your mind about the purchase if unhappy with the report.
If the home has a swimming pool make sure that the installation
has been approved by the local council and that it complies
with the councils safety requirements.
For a good building inspector, see our Associates
section.
Extensions
If the property has had any extensions, alterations or additions
within the last 5 years, or if there have been extensions
or alterations that required a building approval, make sure
that Building Indemnity Insurance is in place to protect
you against loss from faulty workmanship and that the appropriate
council building approval was granted.
Check the "Form 1 - Cooling Off Notices" for
full details about extensions, garages, carports etc: Building
approval is normally required if the structure has a hard
top roof. Shade houses normally do not require approval.
If in doubt, talk to the agent, the owner or call the local
council for assistance. If you buy a property that has work
done without approval, it may be a problem that you will
have to deal with at a later date, especially if selling
later.
New subdivisions, units and duplexes Developments
It is not uncommon for property developers to market land
they intend to subdividing, or selling units and high-rise
developments off a plan, before titles have been issued,
or in most cases before any building work has commenced.
It is quite legal to do this, but as a buyer you need to
be aware that this process can take quite some time, possibly
many months or even years. Settlement cannot occur until
the new title is created and registered.
Any offer must be made subject to the title being granted
with settlement to occur as soon as practicable thereafter.
Extensive delays may result in a requirement for payment
of stamp duty and we recommend that you get advice from
your settlement agent or solicitor before proceeding with
the purchase.
Strata Titles
When you enter into a contract to purchase a strata titled
property, the owner or agent will provide you with all relevant
information about the property, copies of the minutes of
the last 2 years meetings, a financial statement, levy's
and more. This will form part of, or will be attached to
the "Form 1 - Cooling Off" notice. If they are
not and there is a statement saying that they have been
applied for, make sure you see them before your cooling
off period expires. You need to know what effects the complex.
Remember: You are not buying any interest in land as such.
What you are buying is the right to occupy the unit and
access to any unit entitlement. The building belongs, as
does the land, to the Strata Corporation of which you only
have an interest as the unit holder.
Pets are usually prohibited, however special dispensation
can be granted. It is however more the exception than the
rule. If you have a pet do not accept any assurance that
you will be allowed to have a pet unless you see it in writing.
CALL THE STRATA MANAGERS FOR CONFIRMATION. A permit to allow
a current owner to have a pet is not transferable.
Fences
One of the most common problems encountered by new owners
is caused by disputes over boundary fences. Verify that
there are no outstanding debts or disputes with neighbours
over fences or other adjoining property. Ensure there is
no part of the property overhanging the boundary line. This
information should be disclosed in the Form 1 - Cooling
Off notices. If in doubt, ask the question.
All standard contracts for the sale of land do not guarantee
that the fence line is exactly on the boundary. If unsure,
it is your responsibility to check. Get an identification
survey done, however it is reasonably expensive. Most people
however accept that the existing fence is the dividing line,
and in most cases that is a fair assumption.
Main Roads
It is important to know whether or nor the road is to be
widened or there is a foot path to be placed in front of
your home or property. The cost of a foot path can be charged
against the owner or the land.
As for main roads etc: you need to know if there are any
proposals for your street. This information should be disclosed
in the Form 1 notice, however if unsure call the Council
as well as the Department of Transport for advice on proposed
developments which may affect traffic flows in the area.
Check to see if there has been any notices issued for compulsory
acquisition for a corner, street widening or a roundabout.
Certificate of title
When signing a contract you should ask to see a recent copy
of the Certificate of Title to the property. On it are recorded
the owners names and important details such as the lot number,
which identifies the land, and encumbrances or easements
that may affect how you can use the land in the future.
You should receive a copy of the title with the Form 1 Cooling
Off Notices.
Commissions
As a buyer you should not pay any fee to the selling agent.
This is normally the responsibility of the seller. If you
engage an agent to find a property for you, or to bid at
an auction, then they will of course charge you for that
service, however you should not normally pay to buy.
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Easements
An easement is a right over land, granted to a third person.
They usually are for underground pipes or wiring, such as
power supplies and stormwater or sewerage pipes. Allotments
in most modern developments like Golden Grove, West Lakes,
Mawson Lakes etc: have an easement for drainage of some
kind.
The only thing to remember is that you can not build a
solid structure over the easement without the approval of
the person to whom the easement is granted. If you do, and
they want to access the easement, you must remove it at
your cost, or they will.
They are not a thing to worry about, but you need to know
what the easement is and where it is.
Encumbrances
This is commonly know as a restriction over the land. It
lays out rules of what you can and can not do with the land.
Some incumbrances forbid you buying the land as speculation,
hoping to sell it later for a profit. They require that
you must build a certain type of home on the land, must
not use metal fences, no galvanised sheds, no fences to
the front boundary etc: If you are buying a property with
an encumbrance, read the encumbrance before buying. If not
available, ask the agent to provide before cooling off has
passed.
Finance
Most home owners need to obtain assistance with the financial
side of their purchase. Many are first home buyers, others
are either sizing up or down, or simply investing in their
future wealth. What ever you are doing it important that
you get the best financial advice possible.
It is recommended that you shop around, I did, and it saved
me (the writer) many thousands of dollars in fees and interest
over the life of the loan. Talking to the bank directly,
may not be your best option. Normally they will only tell
you what they want you to know.
For assistance, talk to ANREPS independent financial mortgage
brokers. They provide a FREE service. They are paid by the
bank for services rendered, however they will bring to your
table a selection of over 40 financial institutions, and
will select the best one to meet your particular circumstances.
You will also be able to assess what all banks offer at
a single glance.
All our advisers are former senior bank personal. They
offer you a choice from the following lenders:
ANZ, Bank SA, Adelaide Bank, Commonwealth Bank, Savings
& Loans Credit Union, RAMS Home Loans, Great Southern
Home Loans, St George Bank, National Australia Bank, Westpac,
Colonial State Bank, Bank of New Zealand, Bank West, ING
/ Mercantile Mutual Bank, Lifeplan, Powerstate Credit Union,
AXA, Southern Cross Home Loans, Austral, Citibank, AMP,
National Mutual, LaTrobe, Australian Central Credit Union,
Resi Home Loans, Liberty Financial Services.
Underground Cables
Telstra and S.A. Water provide a great service call “Dial
Before You Dig” which gives access to plans/information
for underground pipes and cables including Water, Gas, Telstra
etc: Visit the website www.dialbeforeyoudig.com.au .
Additional Cost
Stamp duty - Calculated on the amount of the
Purchase (contract) Price for the Property. Your conveyancer
or mortgage broker will advise you. For information regarding
Stamp Duty call the Revenue SA on (08) 8226 3750
or email revenuesa@saugov.sa.gov.au
or check out the web site at www.revenuesa.sa.gov.au.
N.B. This must be paid before settlement.
Stamp
Duty Calculator.
Lands Titles
Lodgement Fee Calculator.
Registration fee - This is a Lands Titles Office
charge a fee for transferring the title into your name.
Bank/Building Society - Loan establishment fees
including stamp duty, for preparation of mortgage documents.
Enquire at your lending institution for full details.
Mortgage insurance - You will be advised by
your lending institution. Shop around before settling
on a policy. See our associates for more information.
Council Rates, Water rates & Strata levies -
These will be adjusted by your conveyancer. You will be
required to pay rates on a pro rata basis per days of
ownership calculated from settlement day or date of possession
whichever is earlier.
Land Tax - Applies only if the property is not
your principal place of residence. For information, call
the Revenue SA for more information.
Settlement fees - Conveyancers fees vary. Shop
around and find out what is included. Sometimes the $200
deals turn out to be the most expensive in the long run.
Check out our associates for information. There is a separate
fee for Seller and Buyer.
Search & Settlement disbursements - These
costs are in addition to the conveyancers fee. Amounts
vary according to the cost of searches, cheques and other
out of pocket expenses and government charges.
Building Report/ Termite Inspection - Charges
vary, shop around. (See Associates)
Sewerage Connection
If you are unsure whether the property is connected to the
main sewer, common effluent system or septic tank, ask the
agent or owner. If unsure call the SA Water who should be
able to advise you. Telephone 8207-1329. Also if a rural
property, check to see if town water is connected.
Before you sign a contract, ask the sellers or their agent
if a notice has been issued requiring the land to be connected
to the main sewer.
If you are buying a property with the intention to re-subdivide
or develop the land, you may purchase plans from SA Water,
which show the position of the mains water and sewer connections.
The Council planning department will confirm zoning and
help you to determine the use permitted on the land or sub-division
potential of the land, and whether or not the area may be
affected by future development.
The Form 1 provided with the contract of sale will disclose
whether or not the council is planning any major activities
in the area. Check to see if a Planning Amendment Report
(PAR) is current in your council area and if it effects
your immediate street.
Stamp duty
Stamp Duty is payable on the full purchase price for the
property. Property under $80,000 is stamp duty free (first
home buyers) with a sliding concession which expires on
sales of $130,000. Check with your conveyancer, ANREPS or
your solicitor.
Revenue SA on 8226-3750 or email revenuesa@saugov.sa.gov.au
or check out the web site at www.revenuesa.sa.gov.au.
N.B. This must be paid before settlement
Owners Responsibilities
It is the vendors responsibility to maintain the house and
land in the same condition as at the time the contract was
entered into. Fair ware and tear is allowed, however that
does not mean an accidental breakage of failure is the responsibility
of the incoming purchaser.
You need to water lawns and plants, ensure the hot water
service works, as does the heater and air-conditioner etc:
If unsure, talk to the sales representative and clarify
your position.
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After Acceptance
The contract - the original Contract
is sent to the buyers conveyancer or solicitor.
Deposit - the deposit is to be placed in a government
registered trust account by the due date.
Finance - If your contract is subject to finance,
make your application right away. You must have unconditional
written approval from your lending authority by the date
entered on the contract. Your lending institution will
require a copy of the contract. As soon as finance is
approved, inform the vendors and the agent or ANREPS and
send in a copy of the written approval. Stay in close
touch with your lending authority to make sure that your
unconditional offer of finance will be available by the
date entered on the contract.
Special Conditions - fulfil your obligations
by having any checks of the property carried out by the
date stipulated on the relevant special condition. If
you forget to arrange for these inspections you will be
presumed to have waived your right to have them done.
Transfer of land documents - these documents
will be sent to you before settlement. It is important
to sign and return them immediately as the same document
must then be forwarded to the seller for their signatures.
Stamp duty - must be paid prior to settlement.
You will be notified by your settlement agent/solicitor
of the amount due.
Keys - arrange to collect the keys from the
owners. Agents will usually deliver them to you once settlement
is confirmed.
Possession - if the property is vacant you may
take possession as soon as settlement has been effected.
If the owners will be living in the home right up to settlement
day then, under the terms of sale they may be permitted
to remain until noon the following day. If you are unsure,
read the appropriate Terms of Sale.
Naming buyers on the Contract
If you are buying jointly with another person, try to have
everyone present when the contract is written. If this is
not possible, or if you are unsure whether to buy in your
name or in joint names with your partner or spouse, we recommend
you seek legal advice to word the contract correctly. If
using the term 'and/or nominee' ensure you have an authority
in place before entering in to the contract or it may result
in a demand from the Stamp Office for additional stamp duty.
The ANREPS’ consultant, your finance broker or accountant
may also be able to advise you. If you change your mind
after the contract has been forwarded to the settlement
agent you will not be able to simply add or delete a name.
Deposits - Will a deposit be required?
You will almost certainly be asked to place a deposit. The
bigger the deposit the more confidence the owners will have
in your offer and your commitment to purchase the property.
However the contract will still be legal and binding on
you without a deposit. Be warned however, not many sellers
will accept a contract without a reasonable deposit.
If you do not intend to place a deposit at all, discuss
this with the sellers to see if they are still willing to
accept your offer.
How much deposit should be paid?
An amount up to 10% of the purchase price is usual. If you
don’t have 10% available, pay as much as you can.
There is no fixed amount. If the sale falls through and
it’s not your fault, the deposit will be returned
to you. Some lending institutions will issue a Deposit Bond,
which covers the deposit. Talk to your lending institution
or an ANREPS financial mortgage broker - A free service.
(see Associates)
Who will hold the deposit?
The sellers’ conveyancer, agent or solicitor will
hold the deposit in trust until settlement day. Cheques
should be made payable to the appropriate "Trust Account"
- marked NOT NEGOTIABLE and forwarded direct to their office.
Do not place the deposit into a joint account with the
vendor. Do not pay the deposit until after the "Cooling
Off" period has passed, it is illegal.
Joint tenants/tenants in common
If you are buying with another person you must decide how
you want to register your ownership of the property. This
will be either as joint tenants or tenants in common. The
main difference between the two forms of tenure is that
with Joint Tenants - Survivorship Operates.
If you buy property as joint tenants, whether there are
2, 3 or more registered proprietors, it will belong equally
to the parties registered on the title. One may not sell
without the consent of the other. In the event of the death
of one party, the surviving proprietor/s will automatically
inherit the share of the former owner. Married couples usually
buy as joint tenants.
Two or more parties may purchase property as tenants in
common. They contribute separately whatever percentage of
the purchase price they wish e.g. 50/50; 70/30. At a later
date, one party may sell his or her share to the other,
or to a third party if he/she wishes. In the event of the
death of one party the share passes to the beneficiary of
the deceased estate.
Handover and occupation
You are normally entitled to vacant possession of the property
immediately following the settlement; eg: transfer of title
to you. This in most cases is not practicable, and a mutually
agreed time to handover is set for between 1pm and 2pm on
the settlement day.
This will happen in a number of way, the most common is
to pick up the keys from the agent. With ANREPS we prefer
to meet all parties at the property, go through a hand-over
procedure where you are shown how things work etc.
Any handover outside the norm can be done, it is simply
a matter of agreement between the buyer and seller.
NOTE: IT IS NOT RECOMMENDED THAT OCCUPATION BE GIVEN BEFORE
SETTLEMENT HAS TAKEN PLACE FOR LEGAL REASONS.
Making an offer - Who should the offer be made
to?
When buying from an agent handling the sale the offer will be made to the agent, usually in writing. The agent will then take the offer to the vendor and report to your accordingly.
When buying privately, make your verbal or written offer direct to the owner.
If you are buying from an ANREPS client, you may use the Expression of Interest form provided and leave it with the owners or fax to ANREPS on 1300 656 398. Alternatively, call our office on 1300 886 976 for assistance if required.
Owners using ANREPS Smart Sale option have engaged us to negotiate on their behalf. All offers are verbal until an agreement has been reached, then all contracts are prepared and signed in our office. Please call the consultant whose name is on the property brochure, or ANREPS office on 1300 886 976.
Counter Offers
The seller may want to change the purchase price or some
of the conditions on your written offer. This is usually
done by striking out the original entry then inserting and
initialling the changes. You are not bound to accept changes
the seller makes and you may withdraw your offer at this
stage or re-negotiate. When buying privately we recommend
that you discuss terms verbally with the owner before entering
into a written agreement.
Terms of Sale (General Conditions)
A contract of sale has basically 2 parts:
Terms of Sale & the Schedule.
The general Terms & Conditions apply to you and the
sellers alike. They will be given to you and form part of
the overall the contract. They form the basic rules that
make the contract enforceable. It deals with rates and taxes,
responsibilities, damages, default etc:
The Schedule deals with the names of the parties to the
agreement, the identify the land, the sale price, deposits,
settlement dates and so on. They explain what stays and
what goes and any special conditions like finance or the
sale of an existing property.
If unsure talk to the agent or the local ANREPS representative.
Special Conditions
If you have to sell your own property, or if you are concerned
about structural matters, or any other aspect of the property
itself, you must include the appropriate special condition
in the contract.
A list of the most common special conditions is shown below.
It is vital to have specific wording for these conditions
so that everyone is clear about what has to happen, when
the condition must be satisfied and what the outcome will
be in the event that there are problems.
Do not sign
a contract until you have included all the conditions you
need.
Do not make
an unconditional cash offer unless you are sure you will
have the funds available on settlement day.
Seek further advice if you are not sure how to proceed.
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List of Commonly Used
Condition
Building Inspection Report - (usually done through the cooling
off period)
Subject to sale of purchaser's property (use this condition
if you need to sell your own property first)
Subject to settlement of purchaser's property (when your
property is sold but not settled)
Swimming pool (council approval, structural report)
Sewerage connection (acknowledgment of imminent connection)
Do not word these conditions yourself without seeking legal
advice.
Chattels. What items that stay with the property
Here is a list of fixtures and fittings items that are usually
included in the sale. You may want to list some of them
on the contract:
Fixed floor coverings (i.e. fitted carpets, Vino lay, parquet
flooring etc.
Light fittings (including globes)
Stoves, hotplates, all ovens & range hoods
Dishwashers that are plumbed in (not portable)
Air-conditioning, heater units and other plant or equipment
which is built-in or is permanently connected to the gas,
electricity or water supply (e.g. Hot water system, reticulation
system, pool filters etc).
Furniture - built in
Garden sheds fixed to a concrete base
T/V aerial
Clothes line or hoist
Window treatments, curtains, blinds, security screens,
fly screens etc.
A good rule of thumb is that if it is wired in, nailed
down or screwed in, then it stays. If there are movable
items, such as pool cleaning equipment, include it in the
contract.
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Well everything not included above. All personal effects, furniture, pot plants, microwave ovens (not built in), garden ornaments, statues, portable security systems, party lights that are only plugged in etc. If unsure - ASK.
How will the paperwork be done?
All ANREPS' consultants are qualified real estate representatives with many years experience, and will be available to draft a safe legal contract on terms and conditions agreed between you and the seller. Our offices are at Suite 2, 5 Wakefield Street, Kent Town, and are available to you for this purpose. Regional clients have a phone link to guide them through the process if necessary.
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