Settlement agents are probably not something you think about much until you’re ready to sign a contract to buy a property, but it’s a really good idea to have a chat with one before you start house hunting. They can give you some hints and great information which can make the process easier and help you to avoid some common pitfalls.
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What’s a settlement agent?
A settlement agent (also known as a conveyancer) is a licensed, qualified agent who handles the preparation of documentation to sell or buy a property. They also handle all necessary searches to ensure all debts are removed and you are made aware of all important information about the property you’re looking to buy.
Your settlement agent is the ‘party planner’. They liaise with your bank, broker, real estate agent, builder (if applicable), and building and pest inspectors to ensure that everyone is on the same page and have what they need to satisfy the conditions of your contract to get you into your new house.
Tips to help your purchase go smoothly
In Western Australia, there’s no cooling off period. This means that once you’ve signed the contract, you’re required to use your best endeavours to satisfy the conditions. Therefore, it’s important the contract reflects your expectations. In the excitement of buying or selling a home, some important things may not come to mind. That’s why a little upfront advice may be priceless in the long run.
A list of additional conditions (known in the contract as ‘annexures’) that most estate agents use incorporate a ‘significant structural defect’ condition that allows you to arrange for a building inspection at your expense.
A building inspector will generally do a full report including all maintenance, structural and non-structural issues (regardless of what the conditions states), but the wording of the contract determines the buyers’ rights. In other words, if your contract condition only covers structural issues and your building report reveals that there are many non-structural issues, you may not have any rights in this regard.
If the building inspector finds that a building is not structurally sound, the buyer has the rights as they’re set out in the contract (for example, you may be able to terminate the contract if the seller doesn’t wish to fix the issue). This type of condition does not cover general maintenance or non-structural issues, such as non-structural dampness, electrical wiring, roof coverings, paint and finishes, to name a few.
If you’re concerned about the general state of the property, it may be advisable to make the contract ‘subject to a building report to the buyers’ satisfaction’ rather than a ‘significant structural defect report’.
It’s important to note that the time frame generally stated on the contracts for the inspection is fairly tight (for example, ‘within five days of acceptance or finance approval’). If the inspection is not completed on time, you may lose the benefit of the condition(s) as stated in the contract. You can request a longer period on the contract so that the date for building inspection is not required until after finance approval. This means you’re not incurring the expense before your finance is even approved.
Approved structures
It’s a good idea to include a condition in the contract that all structures and improvements on the property have approval from the relevant government authorities such as the council, Water Corporation and Western Power. Believe it or not, this is not automatically included. It’s caught many buyers unaware, and faced them with the expense and hassle of obtaining retrospective approval or a demolition order.
Good working order of electrical, gas and plumbing appliances and equipment
It’s also a good idea to include a condition stating that all gas, plumbing and electrical equipment and appliances are in good working order prior to settlement. You could include things that aren’t electrical, like reticulation. This is not included in a standard contract and without this condition, the buyer is accepting these items as is - working or not.
Keys and other access devices
You could also include a condition that keys and devices for all locks on the property will be provided. Again, this is not automatic and without such a condition, you could find yourself with a front door key and a locksmith bill.
We’re here to help
Contract conditions can be complex and it’s always recommended to seek advice before signing on the dotted line.
Most settlement agents will happily provide you with some tips before you start house hunting, and will check your contract before signing.
Happy shopping!
Written by
Jo Harman
Licenced Real Estate Settlement Agent
Avenue Conveyancing
About this article
We take care of all the BS (bank stuff) so you can access the knowledge you need to make informed decisions. When we write a guide or article, we take steps to make sure the information is relevant, accurate and most of all, helpful.
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The information contained in the Property Report is prepared by a third party. Bankwest is not responsible for the accuracy and completeness of the information generated in the report and it should not be relied upon as a valuation of the subject property.
The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.
The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.