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Purchase
Procedure
Buying property in
Australia is different from the U.K . You do not have to visit all
of the various real estate offices to find out what is on the market.
You can contact a local real estate agent to find and organise the
purchase of the property. Your real estate agent will be able to
provide you with a list of all available properties in the desired
locations and within your price range . Your agent will then organise
viewings, either privately or at 'home opens' (public viewings,
usually at weekends). Your agent will then present any offers to
the vendor and negotiate on your behalf. This takes the stress and
worry out of the legalities as there are binding contracts to be
signed.
The Property &
Land Purchase System (WA Only)
The following bodies
are involved in a house or land purchase.
Vendor- The
person selling the property.
Real Estate Agent
- Employed by the vendor to sell the property, charging between
3-4% of the sale price for the service.
Settlement Agent-
Employed by the Vendor and Purchaser to complete the sale and conform
to all of the legal requirements. Cost varies depending on the purchase
price.
Termite Inspector-
All properties in WA must be inspected for termites, at a cost to
the purchaser. The cost is around $120. If activity should be found
the vendor is liable for the eradication of the infected area, at
a cost to themselves. Be aware of railway sleepers.
Bank- If you are a migrant you
have to prove that you can afford to repay a mortgage. The bank
will require evidence of pay slips (3-6 months) from your employer.
If you are self employed you must have at least 2 years accounts.
Visa Variations
If you hold a retirement or business visa you can purchase property
subject to foreign investment review board approval. http://www.firb.gov.au
Other Costs
(@ 1.6.2004)
The following fees
are charged by your settlement agent on your behalf and will included
in the balance of your purchase.
Transfer Registration
Fee $115 to the WA Land Administration.
Certificate of Title
$230 to the WA Land Administration.
Searches $30 each
to the Local Shire(council) & the WA Land Administration
Stamp Duty % of the
purchase price. Unless below $220K stamp duty does not apply.
Stamp Duty, Registration
& Establishment Fees on the mortgage if needed.
Water & Shire
rates (council tax) for the remainder of the year will be added
to the balance payable.
Placing an offer. The offer is
written on a real estate contract by your real estate agent and
is a binding contract. At this point having expert advice is advisable
as you may need to specify any additional clauses; for instance
there might be some costly issues with the swimming pool or air
conditioner that need to be inspected by an expert and fixed at
the vendors cost. If the vendor accepts the offer/contract you are
then legally bound to go ahead and purchase the property. This contract
is still subject to a Termite Inspection (white ant report) and
any other additional clauses written on the contract at the point
of signing. A final inspection is required as you need to know if
everything is in working order (plumbing, electric, gas)as close
to the moving in date as possible. A settlement/ completion date
is required when you sign the offer/contract so planning your rental
accommodation is vital as you might need to extend the period.
Deposit is
required and forms part of the contract and is usually between $1K-$5K.
The deposit is held in the trust account of the real estate agent
and is deducted from the final purchase price. This deposit is taken
a few days after the offer has been accepted and can paid by either
cheque or cash.
Building Surveys in WA are not
usually carried out by Banks, as the houses are not as old as in
Europe. This might seem risky but generally the houses are detached
and built on sand which has limited movement, therefore land heave
and other considerations are not seen to be as important. However
you can pay for a survey for peace of mind and the bank may require
an independent valuation if they consider it necessary for mortgage
approval.
Insurance
is required for mortgage holders and contents insurance is highly
recommended. Check the links page.
Completion Date
will be agreed on the original offer. You will then be informed
by the bank, settlement and both real estate agents of the various
signings, inspections and financial details. Remember you
have signed a legal and binding contract.
Australian Property.
Some areas to be aware of when inspecting property.
Electricity
in Australia is generally not 3 phase, this can cause some problems
with some modern electrical appliances as they do consume excessive
amount of power and cause power surges tripping the fuse. Not all
houses have trip switches, they have the old porcelain fuse wire
holders which can cause problems to replace in the dark. The fitting
of all electrical wiring & fuse systems has to be carried out
by a registered electrician, no DIY.
Water systems
are different depending on location. Some properties require a septic
tank to be emptied as the sewer is not connected. The majority of
properties have their sewerage and mains water supply connected.
The supply is monitored by a water meter and billed by the kilolitre.
Many properties have a Reticulation system which is a pipe network
running throughout the garden areas to allow automated watering
of gardens. The use of the retic is limited during summer months.
The heating of water is done by either an outside electric or gas
water tank, some houses have solar powered hot water, or an electric/gas
usage only heater, heating only what you need
Gas systems
are not always in every property as the cooker can be electric and
there is no gas central heating system in the majority of homes.
Lately home owners have been upgrading properties, putting in gas
with a gas fire in the lounge in the form of a bayonet or fixed
fire. The fitting of all gas appliances has to be carried out by
a registered gas fitter no DIY. It never gets frosty in WA but you
do need some form of warmth from July to September.
Telephone
system is usually already installed using a different system to
Europe. UK telephones & fax machines will not work.
Cable/Foxtel(Sky)
systems are widespread throughout Perth and can be fed to the property
using underground cable or the satellite dish. The majority of suburbs
have cable which can be detected by the grey box on the side of
the property allowing the usual prepaid TV products.
Air conditioning
systems come in various styles, be sure to ask what type of system
is in the property. Here are a few examples.
Reverse Cycle or
split reverse cycle keeps you cool in the summer and will generate
heat in the winter. These systems allow hot or cold air to be blown
into the house or room.
Evaporative is a
large unit generally on the roof, distributing cool air through
a ducted pipe system to all or some of the house. This system does
not generate any heat and is usually covered over in the winter.
Refridgerative can
be a small unit on a side wall ( fridge like) distributing only
cool air.
Swimming Pools
(Above & Below Ground WA only).
Pool fences or similar
boundary measures are now a legal requirement to all houses that
are sold in WA. The new purchaser has to comply with planning rules
within 3 months of the moving in date and an inspection will take
place by the shire to ensure the correct measures are taken. These
measures are to ensure that no-one from public areas can access
the pool or small children can gain access from the windows or doors
of the house. Check links page for the Joondalup & Wanneroo
Shire (council) sites.
Liner pools are a
very common type of pool as they can be replaced every 15 years
or whenever they start to wear. The pool is made of a concrete construction
with a vinyl liner on the inside. These pools tend to hold the heat
& chemicals efficiently reducing running costs. Check that the
top edge of the liner near the water line is not worn, as this will
be due to sun damage causing ripping. If the water level is very
high be sure to get on your hands & knees to inspect the areas
in direct sunlight.
Fibreglass molded
pools are of solid construction and placed in the ground by crane
and then paved around. These pools are also warm as heat retention
is good, however the chemical retention is not as efficient as a
liner pool. Fibreglass pools can become discoloured.
Concrete pools with
painted walls can contract blackspot which is a discolouring of
the pool wall. This is due to damp coming through the concrete and
is difficult to rectify. These pools are not as warm as other pools
and do cost more to run.
Pool pumps, chlorinators
& skimmer boxes need to be checked by an expert if you are unsure.
However if you can see the water is flowing in & out of the
pool with no unusual noises and the motor does not sound loud, then
you can assume that the pool has been in use. Pool water quality
is very important and it must be checked for its chemical balance
at a pool shop before you start swimming, as it can be a health
risk. Some skimmer boxes are now illegal and are not allowed to
be fitted to new pools, existing pools fitted with these boxes can
be adapted to comply with safety requirements but this is not law.
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