Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 13 October 2018.
Julie and Justin have been looking to buy their first home for some time. They missed-out on the last house when another purchaser was able to exchange contracts before them.
They have now found another home and they talk to their solicitor about the best way to secure the purchase. They are advised that they can exchange contracts subject to a five business day cooling-off period. This will allow Julie and Justin to sign the contracts immediately and conduct pest and building inspections and obtain approval of their home loan within this time.
They are advised that they stand to lose 0.25% of the purchase price if they change their mind within the five business days.
Julie and Justin advise their solicitor that an agreed purchase price has been reached of $500,000 and their solicitor advises that as they are first home buyers, they are entitled to an exemption of stamp duty which would have otherwise been $18,010. They are advised that as the property is not a new property, they are not entitled to the first home buyers new home grant of $10,000.
Julie and Justin obtain the pest and building reports within the cooling-off period and they are pleased with the reports.
Unfortunately, their bank is not able to provide unconditional loan approval within the cooling-off period but their solicitor is able to negotiate an extension of 2 further days and loan approval is ultimately obtained within this time.
Having now completed their due diligence investigations, Julie and Justin are happy for the cooling-off period to expire and are advised that settlement will proceed as normal, 28 days from the date of signing the contract.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
