Usually only the vendor pays the selling agent’s commission however if the property has been shown to you by more than one selling agent, and you decide to purchase it, you should check that the contract does not contain clauses that will not make you liable to pay the sales commission to one of them. There is definitely potential for trouble for you if you were initially introduced to the property by one selling agent and subsequently purchase the property through another agent.

If you are purchasing a property with a friend or relative, then you must decide if you are purchasing as “joint tenants” or “tenants in common”. The differences between the two types of ownership are:

(a)  “Tenants in common” hold will hold specific percentages of the property each. Multiple purchasers typically buy real estate as tenants in common if they know that when they come to sell it in future, they will to divide the proceeds of sale in the same proportion as their respective contributions to the purchase price. For example, if the property is bought as an investment, or in a “blended family”, or where there are potential tax benefits from purchasing in an equal share. If you purchase as a tenant in common, then your will had better contain appropriate clauses because your share of the property will pass according to your will.

(b)  “Joint tenants” hold the property with equal ownership and where it is the purchasers’ intention that if one of them dies then the survivor will take the whole property regardless of what the deceased owner says in their will. Married couples or de facto partners typically buy real estate as joint tenants for this reason (unless a have children from previous marriages).

The contract for sale of land should contain a list of inclusions and exclusions. You must check this before exchanging contracts (or bidding at the auction) in order to minimise the risk of a dispute on the day of completion of your purchase.

“Inclusions” must be left in the property by the vendor when you complete your purchase.

“Exclusions” must be taken out of the property by the vendor prior to completion.

If you are purchasing a house and you want to be sure that there are no encroachments across the boundaries, that the setbacks from the boundaries to the improvements are correct, or that the fences are reasonably close to the boundaries, then you need to see a survey. Unfortunately, it is not compulsory for the vendors to attach a copy of the survey to the contract for sale, so this is an issue that you must discuss with your solicitor.

If you are purchasing a strata property such as a home unit, townhouse or commercial unit then there will be a survey of the development on the first page of the strata plan in the contract.

The completion period is the time between the date the contracts were exchanged and the date on which you must complete your purchase. In most circumstances this period is six (6) weeks but, prior to exchange of contracts (or the auction as the case may be) it is open to negotiation. There may be reasons why you might want a different period, or a specific completion date. If the completion period shown on the front page of the contract doesn’t suit you then you need to get your solicitor to negotiate an amendment so that you get the completion date you want.

When purchasing property, the contract must include plans showing the location of the sewer main servicing the property and the pipes connecting the building to the main. When reviewing the diagram, you should check that anything built on the property has not been constructed over the sewer main and that connections from the building to the sewer main do not pass through neighbouring properties without appropriate easements. This is most important if you intend to build an extension or knock down and rebuild as you need to be certain that the main is not located where you want to build because that will add considerably to your building costs.

Before you exchange contracts or bid at an auction you need to have a pretty good idea whether the improvements built on the land were built with all appropriate approvals, meet all the conditions attached to the approvals, and comply with current building regulations. This can generally be checked by you sighting the relevant certificates. Unfortunately, apart from the pool fencing certificate, compulsory attachments to the contract for sale of land, therefore before exchanging contracts (or bidding at an auction) you need to discuss these things with a solicitor. The standard terms of the contract includes clauses giving you the right to have the property inspected after exchange, and in some circumstances, you can rescind the contract and get your deposit back if there are illegal structures, but it is much better to have your solicitor sort these things out before you enter into the contract.

Local Councils have building regulations regarding the disposal of storm water from the roof of buildings, driveways and other hard surfaces. Such storm water must never be piped into the sewers. Generally, these regulations require that stormwater be discharged into the curb, into storm water easements in neighbouring properties, into a natural water course, into rainwater tanks, or sometimes into “absorption trenches”. Before you purchase a property, you should know where the stormwater is sent particularly if you are going to build a new house or extend an existing house as this issue can add substantial costs to the build, and you might even be compelled to obtain an easement for drainage across neighbouring properties.

All contracts for sale of land must include a Council Planning Certificate. The Planning Certificate tells you the zoning of the property (that is whether it is residential, high-density, medium density, low-density, environmental living, rural, industrial, commercial, etc) and whether the property is affected by Council’s policies in respect of a large number of different matters. It is most important that you discuss the contents of the Council Planning Certificate before exchange contracts or bid at an auction or you might end up with a property that you can’t use the way you intended.

Most contracts for sale of land include some “special conditions”. They are normally only for the benefit of the seller. Therefore, before exchanging contracts (or bidding at an auction), you should review the special conditions with a solicitor, and make sure you understand them. The special conditions are negotiable prior to exchange so you should consider whether some need to be added so that the contract correctly reflects the bargain you negotiated.

During your negotiations for purchasing a property your agreement may include promises by the vendors to carry out certain works on the property prior to completion. It is most important that you make a note of any works that the vendor promises to do and tell your solicitor about them so that they know to get appropriate amendments to the contract. For example, your vendor may promise to remove construction materials and other items from under the house, or fix a shed, or carry out unfinished painting. You will not be able to enforce these promises unless they are included as special conditions in the contract prior to exchange.

The risk of the property being damaged by fire, storm, winds, earthquakes, vandals, runaway vehicles, etc will pass to you on completion. This means that it is essential that you have the proper insurance policies in place prior to completion of your purchase. Generally, your bank will inform you of the amount of cover they require, otherwise you need to talk to your insurance company to work out the replacement cost of the buildings on the land.

Stamp duty is the biggest expense for you when you purchase real estate. In order to avoid a financial shock, it is essential that you find out from your solicitor the exact amount of stamp duty you have to pay (and when you have to pay it) and factor it into your budget.

Most contracts for sale of land include various special conditions which normally are for the benefit of the seller. Before exchanging contracts, you should review and make sure you understand the special conditions. You should check that they are not onerous or otherwise unsatisfactory. It is important to do this before exchanging contracts as like all the other parts of the contract, the special conditions are negotiable prior to exchange, but binding after exchange.

You can enter into a contract to purchase a property before it exists. This is called “buying off the plan”. That means that the property is defined in a plan of subdivision (or strata plan) before the plan is registered at Land Registry Services. Before you buy from an unregistered plan you should get advice from your solicitor so that you can properly consider risks because you are purchasing “sight unseen”.

The property may be ill defined in the contract, the developer might have the right to make changes before completion, the standard of the property could be very different to what you envisage, defects and teething troubles will need to be dealt with after you complete your purchase, the contract may include clauses that let the developer pull out of the deal, you won’t have any realistic idea of the size and outlook, you don’t know for a fact how long the development will take and your bank’s lending policies may change in that time, etc. If you are purchasing “off the plan” need to talk to your solicitor about the time for payment of stamp duty as not all such purchases permit delay in payment.

If you are a first home buyer you should seek your solicitor’s advice regarding the rules surrounding the First Homeowners Grant, stamp duty concessions and any other schemes that may be available to you.

If you are not an Australian citizen or have permanent residency then you should check with your solicitor whether you need to obtain Foreign Investment Review Board approval before you exchange contracts to purchase (or bid at an auction). Generally, if you enter into a contract when not having the relevant approval the vendor can potentially terminate the contract, keep the deposit and sue you for any losses they incur when they resell the property.

The contract for sale of land must include a copy of the title to the land as registered at the Land Registry Services. It is important that you discuss with your solicitor all of the easements, covenants, restrictions on use, rights of way, by-laws and the like associated with the property. They will all create rights and obligations that affect you and will continue to affect you as long as you own the property. Make sure you understand them before you enter into a contract.

Never assume that you will have the benefit of a cooling off period when you purchase real estate. Firstly, the right to “cool off” only applies if the vendor has agreed to it. Secondly, cooling off rights never apply to a contract for sale of land when you purchase at an auction (unless there is a special condition added to the contract giving you that right). It is essential that you discuss with your solicitor the point in time when you will become bound by the contract as that is the “point of no return” and beyond that point it will cost you a large amount of money if you don’t want to go ahead.

When you are purchasing a property, you should prepare a detailed budget of all of the expenses you will have to meet. You should talk to your solicitor about them so that you can allow generous amounts for each item, and that way you will be less likely to blow your budget later down the track.

Potential costs may include stamp duty, loan application fees, valuation fees, mortgage insurance, strata inspections report, building report, pest report, legal fees (and disbursements), geo-technical engineer’s report, survey, Building Information Certificate, insurance and removalist’s costs.