Property Settlement Guide – a guide to helping you experience a satisfactory settlement when buying an off-the-plan property.
Congratulations on buying such a wonderful property!
Buying a property can be extremely exciting and also quite nerve racking. It’s likely to be one of the most expensive assets you will own. At Crest Property Investments, we are here to help you throughout the full purchasing process. If you plan to occupy or rent it as an investment property, we will ensure you are satisfied to the end.
At this point you have now signed a contract of sale, paid your property deposit and await the next major step… construction end and settlement.
We have designed a Property Settlement Guide to help you prepare and understand the final steps in buying and settling your property. We must admit, we are very excited for you and take this opportunity to thank you for trusting our service. So, let’s get started, shall we?
Who is involved?
| Property Advisers/Consultant: – | Crest Property Investments |
| The Developer: – | Owner of the land and providing the project |
| The Builder: – | Appointed by the developer to construct the building |
| Your Solicitor: – | Handles the contract of sale and property settlement |
Please ensure you appoint a solicitor immediately after you purchase so we can provide a fully signed copy of the contract to them. If you need a referral, we can help you…
Contact Details – People I can turn to?
Is this property for you to live in?
Should you have further questions relating to exchanging keys, collecting manuals/booklets and obtaining immediate access. There are a few other key components to moving into a brand new home, so please don’t hesitate to reach out.
Email:- [email protected]
Is this property an investment?
Should you have further questions relating to renting your property and/or being referred to a specialised property manager, please contact Tristan Markulija. We have some excellent connections that offer a great service and a duty of care.
Email:- [email protected]
Do you need a written rental appraisal?
Often your bank will require an indication of the rental return. Please contact Tristan Markulija for a written rental appraisal. We can have this sent directly to yourself, your mortgage broker and/or financier.
Email:- [email protected]
Contract of Sale
Should you have further questions relating to your contract of sale please contact your solicitor and/or lawyer for further information. Please contact us at any stage if you want a referral to an independent professional who understand the terms and conditions to buying off-the-plan.
Should you have further questions relating to your purchase, please don’t hesitate to contact us at any stage.
Email: – [email protected]
Organising your finance/home loan
Obtaining your Loan
As you can see, there are a number of steps untaken by a developer to advance a completed property to settlement. Often the Office of State Revenue take between 4 – 8 weeks, depending on the complexity and/or time of year.
As construction progresses, will email you updates and photos taken on site for your perusal. As a rule-of-thumb, we always provide an important update with a 2 – 3 month timeframe before the construction is finished recommending you to commence discussions with a finance broker or bank the most appropriate loan to suit your intended purchase. As you will need time to co-ordinate meetings and submit a loan application, a 2 – 3 month timeframe will ensure you are well prepared in obtaining the right finance available to you.
Please be mindful a formal unconditional approval may only remain valid for up to 90 days (depending on the type of finance and propose lender used), so your finance broker will ensure the application is submitted on a timely manner.
If you need assistance with finance, please contact us. We have several brokers who are experts at securing finance for off the plan purchasers and located in various areas of Melbourne. We believe their service provides a more comprehensive offer by reviewing many banks/lenders over going direct to one bank on your own.
Property Valuation
If you are purchasing your property using finance, it’s likely you will require a property valuation to satisfy the bank’s interest to borrowing you money. We will send details of how they can gain access to the property once the construction nears completion. Until then, it can’t be valued.
Please note – some banks/lenders was scale drawings to process a property valuation. We do not have this information available, so please advise your finance broker and/or bank to conduct an on-site valuation.
Stamp Duty
Stamp duty for off-the-plan purchases are calculated differently depending on your intended purchase. If you purchase a property as a first home buyer, you are eligible to paying no stamp duty.
If you are an owner occupier, stamp duty is based on the land component and percentage of building works completed at the time you signed the contract. If you are an investor, stamp duty is payable in full regardless of what stage the construction is at.
Please contact your solicitor for an approximate guide. Please note the final figure will only be provided by your solicitor just prior to settlement.
Rates & Owners’ Corporation Fees
We always like to inform you of the estimated outgoings schedule. It’s only an estimated figure, but it will provide a good guide in advance to settlement so you can manage your cash flow. We try to provide the most accurate estimate available to us. Remember, we are property advisers and work for you. We want you to be satisfied and comfortable with your purchase. Rates consist between council rates and water rates.
- Council Rates – councils need to charge rates to raise revenue so they can provide services and infrastructure to their communities. These rates are a tax and usually based on the value of properties. It’s also noted that it covers the costs of waste collection, street lighting, parkland maintenance etc.
- Water Rates – water and sewerage services play a significant part supporting our standard of living and protecting public health and the cost of providing these services is paid by landlords. Ultimately these rates provide services such as water quality, removal of wastewater from your property, maintaining the water and sewer network infrastructure.
- Owners Corporation Fees are necessary if you are buying a property that has a shared common area. A multi development pertaining to a Townhouse project or Apartment development will create an owners’ corporation.
- The owners’ corporation sets rules and regulations to ensure the property maintains consistency. It has the responsibility for maintaining and repairing the common property of the strata scheme, managing the finances of the strata scheme, taking out insurance for the property and employing various third parties to keep the premises clean. The developer will appoint an owners’ corporation manager prior to settlement.Usually the first 3 – 6 months of rates and owner corporation fees are adjusted (to be paid) at settlement. Your solicitor will notify the local council and owners corporation of your contact details for future correspondence.
Pre-settlement
Plan of Subdivision
The plan of subdivision allows an applicant (developer) to divide land into two or more new parcels of land than can be disposed separately. This plan is registered with the Office of Sate Revenue once construction is complete.
Certificate of Occupancy
The certificate of occupancy is a document issued by the a local government agency or building surveyor/council certifying the compliance of a building and permitting it’s fit and suitable to live in. There are various documents and certificates that form part of this process, but it ultimately confirms that the building meets appropriate building standards.
Window Furnishings
Window furnishings are materials used to cover a window to manage sunlight and privacy.
It’s ideal to have suitable blinds installed in the property. It’s normal for an Owners Corporation to establish rules and requirements to what type of blinds are acceptable. This will ensure consistency throughout. They will enforce the type and/or colour acceptable for installation. Please contact Crest Property Investments so we can organise quotes in advance. We often get cheaper rates as they are bought in bulk. We will send further information closer to completion
Property Inspection
It is common practice and noted in the Contract of Sale that each buyer gets the opportunity to inspect their property prior to settlement. Once the building is complete, Crest Property Investments will arrange an inspection (usually 3-4 weeks before the anticipated property settlement). If we discover any minor defects (e.g. paint touch ups, or scuffs/scratches) we will record them for the builders to rectify.
If you plan to occupy the property, you may want to buy new furniture to call your new property ‘home-sweet-home’. Perhaps bringing a tape measure or other devise would be helpful so you can identify what type of fridge or sized beds will suit the your new home.
Please note it’s unlikely we will get early access to moving in prior to settlement. Please ensure your contents isn’t delivery prior to settle. It’s also important to note that generally, you are entitled to only one pre-settlement inspection.
Defects
If we discover any defects, we are still obliged to settle the property at the booked settlement date. The builders will try to rectify any issue prior to settlement, but in some cases, it isn’t possible. This may be caused due to a new order of an item or the defect was accidentally missed. It’s common that a builder has between 3 – 6 months to rectify the issue, but we would work with you and the builder in satisfying your expectations promptly.
Settling your property
Property Settlement
After the property completion takes place, property settlement is the final stage of a property sale wherein the buyer completes payment of the agreed contract price to the vendor and takes legal ownership of the property. The keys are then obtained and full access is granted to move in.
A booked settlement date will only be known once the Plan of Subdivision is registered. Your solicitor and the vendor’s solicitor will establish a settlement date. This is generally 14 days after the registered Plan of Subdivision. In the interim, we will only be in a position to provide an estimated date to work towards. Our estimated guideline is relayed directly from the developers and builders.
Once the property has reached final settlement, you can move into the property. Moving in differs from builder to builder. Some allow all residents to move in at the same time, while others like to process it on a booking basis so it reduces chaos and clutter in the common areas as each resident moves in. Either way, at Crest Property Investments, we will keep you informed and notify you in advance to moving in.
Last but not least, packing up from your old place is an exciting time, but make sure you don’t become unhoused or send your furniture out prior to having a formal booked settlement.
Collection of Keys & Building Manuals
When settling your property, you will be given keys to get immediate access. There are a few ways to obtain your keys and it depends on your intended purchase. Your nominated solicitor will arrange instructions to collecting your keys, settlement packs (if applicable) and building manuals. Crest Property Investments can collect the keys on your behalf iwhile you are at work or your property manager could do the same if they are to rent your investment property as soon as possible. If it is an investment property, the building manuals are also often kept with the property manager so they can provide prompt access to your tenant.
We will discuss this further with you as we get closer to settling your property.
Settlement Delays
Completing a property development isn’t easy. Many third parties are involved in delivering your brand-new property. This includes suppliers, builders, product manufactures, quantity surveyors and local council authorities just to name a few. Sometimes a delay can occur.
We will provide you with construction updates and estimated timeframes throughout the construction right through to settlement. Please note we cannot guarantee the accuracy or if delays may occur, but we will inform you if this occurs.
To reiterate, a construction completion and a settlement date are different. Once construction has been finalized, the Office of State Revenue take between 4 – 8 weeks, depending on the complexity and/or time of year to complete a full titles release of each property.
PS – your solicitor will be the first to know the formal settlement date, normally before you.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Dec 2017
