There are several important things to consider when you are buying a house; it will be one of your biggest investments so make sure there are no surprises when you move in.
Checking the title
A title is the short name for “Certificate of title”. The title gives details about the registered owner and details of any easements, mortgages, covenants etc.
- whether there are any easements – an easement is something that restricts the ability to use the land, for instance a driveway through your property to a neighbours;
- details about any mortgages; and
- whether there is a caveat – this is a warning sign that alerts you that someone else claims an interest in the property.
If there is a mortgage or a caveat, it does not mean the property cannot be sold, but to give you a “good title” they must be removed by the seller before, or at, settlement. Remember, most properties have a mortgage that the seller will pay off with the money from the settlement.
Types of title
There are a number of different types of titles used throughout Australia. For example:
- Torrens title – this is the most common title and gives the buyer a guarantee of “good title” because the title is registered.
- Strata title – this is used for many flats, units and multiple living areas such as retirement villages. You usually get a title for your individual unit as well as one for your parking space (if you get one). You also have responsibilities for the common area through a structure called a body corporate.
- Company title – under this structure you don’t own a title; you are allocated shares in a company that owns the title. When you sell your unit, you transfer your shares in the company. This is also less common now.
- General law or old system title – this was the original type of title used. There are not many general titles left.
Buying off the plan
This is common in today’s property market, especially for inner city apartments and large developments. ‘Buying off the plan’ refers to buying a property before it is completed. The deposit that is paid secures the property and the contract, and the balance is paid when the property is completed.
Make sure you know:
- What the property will look like when it is completed;
- That you have somewhere to live during the construction of the building; and
- Whether the developer has a track record or their work is available for inspection.
The local council
- there is a vacant block of land next to or near the property and if there are any plans for a block of flats or apartments to be built next door. This might allow the neighbours to look over your back yard;
- there are any zoning or building restrictions on the property;
- the property is properly zoned for your use;
- there are any buildings or other structures that were built without a permit;
- wiring and plumbing have been legally connected.
The statutory authorities
Make sure you check with the statutory who can tell you:
- whether they have any interest in the property you want to buy; or
- whether there is something that is going to happen in the area that might affect your use of the property.
You should always get these certificates, even if it seems to be a waste of your time. You will want to know:
- the “adjustments” on the purchase price resulting from unpaid or unused rates and taxes;
- if there is some reason you will not be able to use the property in the way you intend, for example, if you want to renovate;
- whether there are any major works, like freeways, to be built in the area; and
- whether there are services, like gas and electricity available.
The potential costs include:
- Property and pest checks
- Title searches and rate certificates
- Legal / conveyancing services
- Mortgage costs
- Stamp duty (you may be eligible for an exemption, contact your State Revenue Office for details)
- Land titles office – registration fees
- To ease the burden – make sure you read about government grants for new home buyers.
Contact Homeloans today to talk to an accredited loans consultant about your future home.