Frequently Asked Questions (FAQs) for Queensland Property Purchaser
Brief Facts on Queensland Property Market
According to CoreLogic’s report in September 2021, Brisbane’s dwelling values have risen 10.6% in the last year and are now at new highs. Queensland’s property market is now experiencing a massive surge in price and popularity in Australia and is attracting overseas investors as well.
Frequently Asked Questions for Queensland Property Purchaser
1. Do you need to review the contract before signing?
A standard Real Estate Institute of Queensland (REIQ) Contract or its equivalents will usually be used to evidence the purchase and sale of a residential property in Queensland. While these types of contracts contain standard terms, it is critical that you have a property lawyer to review the contract before signing to ensure that the contract does not contain any terms and conditions which are unusual or have significant impact on the use of the property..
2. Are verbal agreements surrounding the signing of the contract binding on the parties?
The contract for sale typically includes a clause confirming the contract records all agreements of the transaction. Unless the verbal agreements, promises, representations etc have been noted in the contract, these items will not be binding on the parties. Hence, you should engage a lawyer to draft the appropriate clauses reflecting the parties’ verbal agreements and put them in writing before it is signed.
3. In Queensland, what kind of conditional clauses can you negotiate into the contract?
It is not uncommon to negotiate the following conditions to the contract in Queensland:
- Subject to Finance;
- Subject to a Building & Pest Inspection;
- Subject to Body Corporate Searches;
- Subject to further Due Diligence (which can be anything at the buyer’s discretion); or
- Subject to a Rent Back (if the sellers have not purchased elsewhere).
4. How can I make the Contract subject to Finance?
The standard REIQ Contract already provides adequate protection for purchasers who wish to make the contract conditional on finance approval. The purchaser needs to make sure that the ‘Finance’ section of the REIQ Contract is completed correctly. It is best to ask your lawyer to double check to make sure this condition is correct.
5. How much deposit should the purchaser pay under a contract?
The deposit amount is usually determined by the parties’ agreement. The deposit is usually paid in two instalments in Queensland. An initial deposit of a nominal amount is typically paid by the purchaser upon signing the contract, with the balance of the deposit due when the contract becomes unconditional or at a later agreed date (usually on the expiry of the cooling off period).
The deposit is frequently viewed as a means of gauging a purchaser’s interest in the property. Vendors in Queensland usually ask for at least 5% deposit. Most require a 10% deposit.
6. Do you need to buy insurance for the property prior to settlement?
As a purchaser, the property becomes at your risk beginning at 5 p.m. on the second business days following the date of the contract. Although the vendor is responsible for the property during the settlement period, it is highly recommended and in your best interest to buy insurance for the property so that you can be certain that a third party will step in to protect you, should there be any hazard on the property.
Building insurance is the most common type of insurance purchased by a purchaser prior to settlement. If you are purchasing an existing residential house, then a standard building insurance with public liability coverage is preferable. If you buy into a strata scheme, the body corporate has to maintain a building insurance on the property and the common properties. You are not required to obtain your own building insurance on this basis. You may also consult a lawyer to check if you need to purchase any other forms of insurance for your particular circumstances.
7. What is settlement?
In short, you are required to pay the balance of the purchase price plus any necessary adjustments to the vendor in exchange for the vendor transferring the title of the property to you. It is also called ‘completion’ because it is the completion of the contract for sale and purchase of the property.
Should you have any further enquiries on the Queensland’s conveyancing, please do not hesitate to contact our property lawyer.