The new online auction market in Queensland

The Queensland real estate market is adapting to the recent coronavirus measures with new digital auction platforms.

With auctions and house inspections currently banned in Australia the real estate market has had to adapt to the strict COVID-19 measures by relying on new virtual auction apps and websites such as Gavl.

Whilst some Buyers have been deterred by the uncertainty of the times or are choosing instead to buy and sell property via private sales, there has been a growing number of potential Buyers in Brisbane switching to the new model of livestreamed auctions.

If you’ve signed a new contract to purchase property in Queensland or are considering buying or selling contact Horrocks Solicitors for trusted conveyancing advice in Brisbane.

Phone 07 3013 2300 or via our contact form.

House and Land Private Sales - What do you need to know?

Buying and selling a house or land through a private sale can be risky and it’s important to ensure that you conduct appropriate market research within the local area to compare the purchase price in addition to contacting a conveyancing solicitor to review your contract terms before you sign.

Digital Auctions - How do they work?

New digital platforms and smartphone technology have enabled auctions to be livestreamed via the internet whereby potential Buyers make their bids in real time in a virtual auction room without the need to be physically present.

The signing of the REIQ contract can be executed digitally using DocuSign and is facilitated by the company.

Buying property during the Coronavirus Pandemic

If you’re considering buying or selling at this time in Queensland we recommend that you read our Important Conveyancing Update for the COVID-19 Special Conditions that should be added to your REIQ contract.

Special Conditions Update

“Buyers need to be proactive, ready to move quickly and, as always, prepared financially. Job security, the ability to afford loan repayments, and pre-approval from a lender are crucial in the current economic climate. “

Source: Domain.com.au

COVID-19 Special Conditions

CONVEYANCING UPDATE: COVID-19 PANDEMIC:

If you’re signing a new house and land REIQ contract during at this time we now advise due to the COVID-19 Pandemic to add to your contract the COVID-19 Special Condition

CONVEYANCING DURING THE CORONAVIRUS PANDEMIC

Your conveyancing may be affected during the COVID-19 Pandemic. Horrocks Solicitors now advises that if you’re buying or selling property in Queensland to review the following:

• The current COVID-19 Pandemic situation may mean that the time periods and obligations under the Contract could be impacted by further closures or unavailability of parties (including financiers) which may be outside the control of the parties. Some situations that may arise may not be currently foreseeable.

• Longer than usual time periods for finance and building and pest should be considered. Even if you obtain finance approval for your purchase, given the current circumstances, your finance approval could be at risk of being withdrawn prior to settlement. Most financial institutions will reserve the right to withdraw finance approval at any time prior to settlement for any number of reasons. Reasons they may withdraw the approval include if your personal financial circumstances change or the value of the Property is adversely affected. That may cause your financier to decline to provide finance to complete the purchase.In cases where finance is withdrawn, if the Contract is no longer conditional on finance approval, then despite the financier’s failure to provide finance, you would still be obliged to complete the Contract.

• If you do not have sufficient funds to pay the balance purchase price (including any adjustments) at settlement the Seller may terminate the Contract or seek to have you specifically perform the Contract and, in both instances, can keep your deposit and claim compensation from you (such as loss on resale which may be significant in the current volatile property market).

• In addition to the normal cooling-off considerations, some usual steps like undertaking searches, obtaining independent reports or approvals, signing of documents, receiving vacant possession or other key parts of a conveyance may not be able to be undertaken or may be significantly delayed. You will not have a right to extend the time for conditions or settlement merely because a search or inquiry cannot be undertaken or is delayed.

If these issues were to occur then you may not necessarily have a contractual remedy to help you and you may be unable to avoid breaching your Contract, be financially impacted or suffer other loss or hardship.

In these uncertain times the only way to completely remove that risk entirely would be to exercise your cooling-off rights and terminate the Contract or, if the Contract is not yet signed, to not sign the Contract at all.

Alternatively, you may consider asking us to insert special conditions into the Contract that attempt to minimise the risk.

However, there is no way to completely remove all risks when proceeding in a conveyance during the current COVID-19 Pandemic due to the many uncertainties that arise from it and from the measures being taken in response to it.

It is important to note that as the government response to the COVID-19 Pandemic progressively increases in severity the ability of contracting parties to perform obligations under a contract of sale is becoming increasingly uncertain and unpredictable. While there may be options we can discuss to attempt to manage some of the current legal risks that have arisen in the COVID-19 Pandemic, none of them will provide the same level of certainty that existed before the COVID-19 Pandemic.

If you are concerned about taking these risks, breaching your Contract, potential litigation or unexpected delay in settling, please consider whether you want to proceed as this situation is very difficult to advise on fully as we do not know what may happen in the COVID-19 Pandemic, and there may be things that occur during the current COVID-19 Pandemic that are beyond your control and may affect you financially that cannot be avoided by adding a contract term.

COVID-19 SPECIAL CONDITIONS

Because of the aforementioned risks we recommend that the special conditions be added to contracts before they are signed:

Should either the Seller or the Buyer become incapacitated, in quarantine or otherwise prevented from signing documents or providing purchase money as a result of taking reasonable precautions in relation to the COVID-19 virus; or delivery of a parties documents necessary from the completion of this contract being delayed as a result of transport delays caused by reasonable biosecurity or Government measures being taken in relation to the COVID-19 Virus; or preparation of documents or cheques necessary for the completion of this contract, or attendance at settlement, by a financier, solicitor or settlement agent of either party being delayed as a direct result of the COVID-19 virus, these events will be deemed a delay event in addition to any other delay event in the standard terms and conditions.

If a party is unable to perform any obligation by the due date in the contract due to a delay event:

( a ) Time for the performance of the parties obligation is suspended and ceases to be of the essence of the contract and the parties are deemed not in breach of their obligations;

( b ) An affected party must take reasonable steps to minimised the effect of the delay event on its ability to perform its obligations;

( c )When an affect party is no longer prevented from performing its obligations due to the delay event the affected party must give the other party a Notice For Time to Commence;

( d ) When the suspension period ends, whether notice under ( c ) above of this clause has been given or not, either party may give the other party a Notice For Time to Commence;

( e ) A Notice For Time to Commence must be in writing and state; 1. That the Suspension Period has ended; 2. A date, being not less than 5 nor more than 10 Business days after the date the Notice For Time to Commence is given, which shall become the date the suspended date must be complied with; and 3 that time is of the essence.

( f ) When Notice For Time to Commence is given, time is again of the essence of the contract.

( g ) All subsequent Dates will be extended by the amount of days of the Suspension of Time.

Any Obligation means an Obligation in regards to dates to perform and provide notice in regards to Building and Pest ,Finance, Due Diligence and Settlement.

Subsequent Dates means the dates to perform and provide notice in regard to Building and Pest, Finance , Due Diligence and Settlement.

Suspension of Time means the amount of days between when a date was suspended and when the date when time to Commence starts.

Please contact us today if you have further questions about signing a contract during the pandemic or completing your conveyancing during these uncertain times. 

Phone 07 3013 2300

Email reception@rivercityconveyancing.com.au

PROPERTY MARKET FORECAST 2020

PROPERTY MARKET FORECAST 2020

With the new year underway prospective home buyers and sellers have turned their attention to the Brisbane property markets for the potential of an upturn in house prices throughout 2020.

Despite Brisbane property values declining by -0.6 per cent (the detached housing sector) in June 2019 there is hope yet that a boom will return with analysts predicting a strong comeback for Brisbane over the next 3 years. The end of December finished with a 0.7 per cent change in home values resulting in an overall annual value increase of 0.3 per cent in Brisbane City for 2019.

(Source: realestate.com)

PROPERTY MARKET INFLUENCES

According to market analysts there are a few influences that will affect the housing market in 2020:

• an interest rate cut by April from the Reserve Bank

• relaxed credit restrictions allowing banks to offer more property purchasers access to a mortgage

• the new ‘Comprehensive Credit Reporting’ system

• the ‘First Home Loan Deposit Scheme’ implemented since January 1, 2020.

FIRST HOME LOAN DEPOSIT SCHEME

The new scheme will mean eligible first home buyers only need a 5% deposit saved to be able to borrow up to 95% of the purchase price of the property without needing to pay Lender’s Mortgage Insurance (LMI).

Eligibility criteria

Those applying for the loans will need to meet eligibility criteria. 

Applicants must:

Earn under $125,000 a year for singles and $200,000 for couples

Intend to live in the home (investment properties aren't supported)

Not have owned or had a share in property previously.

BRISBANE HOUSE PRICES

Managing Director of SQM Research Louis Christopher has predicted the following property price forecasts for 2020 and specifically with ‘record low interest rates and cheap credit an increase in Brisbane home prices by up to 7%’

Source: www.abc.net.au/news/2019-11-14/property-prices-in-2020-sqm-forecasts/11703668

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Queensland in comparison to NSW and VIC is often held back by the economy and jobs growth but it has the advantage of relative affordability and higher vacancy rates. With the arrival of further rate cuts and eased lending conditions Brisbane is primed to see price growth for the first half of 2020.

Source: www.realestate.com.au/news/boom-time-forecast-for-brisbanes-housing-market-in-2020/

If you’re in the market for selling or buying property contact our dedicated team at Horrocks Solicitors to receive a competitive fixed quote today for conveyancing services from Queensland’s best.

FIND OUR CONTACT FORM here

FINANCE APPROVAL FACTS FOR QUEENSLANDERS

Understanding the legal jargon of Conveyancing can be overwhelming at a time when you should be able to celebrate the purchase or sale of your house without the stress of drafting complicated paperwork. If you’ve just signed a new contract, a trusted Conveyancing Solicitor can let you rest assured your settlement contract is completely watertight. 

Our boutique team at Horrocks Solicitors is specialised in all matters Conveyancing and we strive to go above with our personalised customer service to ensure that you’re guided through the process of buying or selling property with ease and efficiency.

FINANCE APPROVAL FACTS & WHAT YOU NEED TO KNOW ABOUT HOME LOANS IN QUEENSLAND

1. WHAT DOES ‘SUBJECT TO FINANCE APPROVAL’ MEAN WHEN BUYING A HOUSE?

   The ‘subject to finance’ is a standard condition in house and land contracts as it allows the Buyer time to organise a loan with their chosen bank to complete the property purchase. This clause ensures that the Seller can choose to end the contract and not go through with the sale if the Buyer’s loan application is refused by the bank.

2. WHAT DOES SATISFACTORY FINANCE APPROVAL OR UNCONDITIONAL ACCEPTANCE MEAN FOR A HOUSE AND LAND CONTRACT?

   Along with other contract conditions the wording of finance clauses are essential to assure the condition is accurate and legally binding. To satisfy a finance clause as approved and obtain satisfactory finance approval the conditions may include:

   A. the receipt of a money deposit from the buyer made in payment to the Selling Agent of the property and/or

   B. the approval of a loan or mortgage agreement from the bank of the Buyer to provide the full amount of the purchase price for settlement

   There are other conditions that can be written into a finance clause but it’s best to talk with a licensed Solicitor to be sure you’re aware of all the important details. At Horrocks Solicitors our friendly paralegals will communicate on your behalf with your financier and the legal representation for the Buyer or Seller of your contract; they will follow the legal protocol to protect your interests and certify correctly if a finance clause has been satisfied. 

   Once all conditions of your contract are satisfied the contract is termed as now under ‘unconditional acceptance’ which in other words states that the contract is now on track to complete by settlement date without any further conditions to be fulfilled.

3. HOW LONG DOES IT TAKE TO GET FINANCE APPROVAL?

   Most settlement contracts include a finance approval clause of approximately 14 days however it depends entirely on the Buyer’s requirements to obtain sufficient settlement funds. The following excerpts are provided via www.yourmortage.com.au 

   ‘The time it takes to get a home loan approval can vary widely as there are many parties involved in the application process. In a situation where the buyer has prepared all the documents required, approval can be expected in as little as three to five business days. But more complex situations will, of course, take a bit more time.

   Lenders offer different types of pre-approvals, which can range from a simple two-minute online application to a formal document. If possible, you will want to avoid non-formal, non-written applications as they have far fewer guarantees and can come with many unknown conditions that you must meet at a later date.

   A pre-approval will only be reliable if it is formal, written and signed by the lender. Securing a formal pre-approval is the only way to make sure you can negotiate with sellers confidently. Without a signed letter, some sellers and real estate agents will not accept your offer, as they cannot guarantee that you will be able to get the necessary finance.

   An approval is formal when the lender has everything they need and can confirm in the form of a letter that they are willing to lend you money. This is the final guarantee that you will need for the property purchase. In some instances, they may just ask for additional documents before finalising the approval. This is normal for complex applications or when you have not provided everything they need upfront.

   Once your offer has been accepted by a seller, you may have a one to three-week grace period to get your finances and deposit in order. During this time, you can check with your lender and make sure they will honour the agreement. Even if you don’t have this grace period, contact your lender and make sure they will finance your loan.’

4. WHAT ARE THE DIFFERENT TYPES OF HOME LOANS AVAILABLE?

   If you’re buying a house and need to find a home loan to complete the purchase it's essential to work out what exactly you need from your loan and how much it will cost you in fees. The Money Smart website provided by the Australian Government outlines the types of homeloans available and what you need to think about before you apply for one.

Here’s a quick list of different home loans that you may be interested in:

PRINCIPAL & INTEREST HOME LOAN

INTEREST ONLY LOAN

VARIABLE, FIXED & SPLIT RATE HOME LOANES

REDRAW, OFFSET & LINE OF CREDIT

PORTABILITY

BRIDGING LOANS, LOANS FOR BUIDING OR RENOVATING

VENDOR FINANCE

A definitive guide to the different types of loans and their repayment conditions is available to read here www.moneysmart.gov.au/borrowing-and-credit/home-loans/choosing-a-home-loan

5. CAN MY PARENTS ACT AS MY FINANCIAL GUARANTORS & HOW DOES IT WORK?

If your parents are able to help you buy a house there are a few different ways to structure a guarantor loan. To start they have the option of using the equity in their own home and with this they can provide security over the entire loan or just a portion. There are many factors to consider with family guarantee home loans and it’s best to talk through all your options with your financier.

6. AM I ELIGIBLE FOR THE QUEENSLAND HOUSING FINANCE LOAN?

The Queensland Housing Finance Loan may be available for Queenslanders who can afford to buy or build a home but cannot get private finance from a bank or building society. This loan can be used to buy an established house, unit, town-house or duplex, or to build a house.

To be eligible for the loan you must:

• live in Queensland and be a citizen or permanent resident of Australia

• not own or part-own another property

• have a household income under $141,000 per annum

• intend to live in the home

• have a good credit history

• have no significant debts

• have a regular savings history

• have savings to cover the deposit and other costs, such as legal fees, stamp duty and insurance

• be able to afford the loan repayments without hardship

• have earning potential for the term of the loan.

7. HOW TO GET THE FIRST HOME OWNER’S GRANT?

If you are buying or building a new home, you could be eligible for the Queensland First Home Owners' Grant. The Queensland First Home Owners’ Grant is a Queensland Government initiative to help first home owners to buy their new first home. Read more about how to apply on our FHOG post here.

We’ve compiled our ‘Top Checklist’ for all your Unconditional Finance Approval FAQs but don’t hesitate to contact us today if you’d like a free fixed quote for your new conveyancing contract in Queensland.

BUYING IN QLD WITH THE NEW FIRST HOME LOAN DEPOSIT SCHEME

THE First Home Loan Deposit Scheme IN QUEENSLAND

The First Home Loan Deposit Scheme (‘FHLDS’) was announced during the recent Federal election.

The new rules will provide that first-time buyers need only save a 5% deposit when they purchase a new property. Currently most banks and financiers require a 20% deposit before they will consider providing finance for the purchase of a residential property.

The FHLDS will guarantee loans through the National Housing Finance and Investment Corporation. 

Not only will it mean that First Home Buyers do not have to save more for the deposit but they may avoid having to pay for mortgage insurance which is often thousands of dollars.

The new policy is due to come into effect from 1 January 2020.

To be eligible individuals cannot be earning more than $125,000 per year or for couples, more than $200,000 per year.

However, the scheme is only available for the first 10,000 first home buyers.

FIRST HOME SUPER SAVER SCHEME

The FHSS (First Home Super Saver Scheme) scheme was introduced by the Australian Government in the Federal – Budget 2017-18 to reduce pressure on housing affordability.

From 1 July 2017 you may make voluntary contributions into your superannuation fund to save for your first home. 

After 1 July 2018 you can apply for the release of your voluntary contributions along with any earnings from the investment of these contributions to go towards the purchase price of your first home.

To be eligible to make use of the FHSS scheme it is required for you to live in the property that you purchase for at least 6 months immediately within the first 12 months after settlement. The house or unit cannot be an investment property that you plan to rent out.

If you plan to use the scheme then you need to apply for and receive confirmation before you sign a contract to buy. It also must be your first home.

Once you receive consent to apply the scheme you can then sign your contract and afterwards apply for release of your FHSS amounts. However be it’s important to know that it may take between 15 and 25 business days to receive the FHSS funds. Therefore, it is essential that before you sign your contract that you: have confirmation and that you make sure that you have a lengthy settlement date if you need the FHSS funds to pay to the Seller on settlement day. 

You have 12 months from the date you make a valid request for release of your FHSS amounts, to do one of the following:

• sign a contract to purchase or construct your home – and give notice within 28 days that you have signed the contract

• recontribute the assessable FHSS amount (less tax withheld) into your super fund – and you must give notice within 12 months of the release request date that you have recontributed

If you don't give notice that you have done one of the above or you choose to keep the FHSS money, you will be subject to the FHSS tax. This is a flat tax equal to 20% of your assessable FHSS released amounts. This may not be the same as the total amount released.

If you have any questions regarding your requirements for the Australian Taxation Office and the First Home Loan Deposit Scheme in Queensland contact the Horrocks Solicitors team today at 07 3013 2300

Who is eligible

You can start making super contributions from any age. However, you must be 18 years old or older to request a determination or a release of amounts under the FHSS scheme.

Also, you must have:

• never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the Commissioner of Taxation determines that you have suffered a financial hardship)

• not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.

Eligibility is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.

Financial Hardship Provision

You may still be eligible even if you have previously owned property in Australia, if it is determined that you have suffered a financial hardship that results in a loss of ownership of your property interests. The types of events that could result in the loss of property interests include:

• bankruptcy

• divorce, separation from a de-facto partner, or a relationship breakdown

• loss of employment

• illness

• being affected by a natural disaster

• being eligible for early access to superannuation.

How to apply for financial hardship

If you want to be considered under the financial hardship provision you can apply with either:

ATO online using your myGov account linked to the Australian Tax Office

or by completing a First Home Super Saver scheme Hardship Application Form.

HOW MUCH IS LAND TAX IN QUEENSLAND?

HOW TO CALCULATE YOUR AUSTRALIAN LAND TAX IN 2019?

LAND TAX

If you buy real estate in Queensland you will be required to pay a sum of Land Tax. Land Tax is a State Government Tax and is collected to contribute to Government services and infrastructure in Queensland. You are considered exempt from Land Tax for any land that has a home on it which is used as your principal place of residence.

The amount of land tax payable is calculated using a land valuation of your property with different rates applicable depending on what type of owner you are (Company or Individual).

TAX LIABILITY

Land Tax is calculated on the 30th of June each year and applies for the next 12 months. If you are buying real estate property in Queensland, it is important that before you become the owner of the Land that any Land Tax owing on the Land by the Seller is paid before settlement. If the Seller has not paid their land tax previously you as the new owner will become liable to the Queensland Government for payment of the Seller’s Land Tax.

Read more about Land Tax Clearance Certificates here: https://www.qld.gov.au/environment/land/tax/clearance

Be very careful when signing off-the-plan contracts (when the Land is still to be subdivided) as often these contracts make the Buyer responsible for payment of the Seller’s Land Tax on settlement. This Land Tax can be a considerable amount if the Seller already owns a lot of real property.  

For more reading on how buying and selling land affects your land tax visit the Queensland Government authority land tax resources page

here: https://www.qld.gov.au/environment/land/tax/changes.

& here: https://www.qld.gov.au/environment/land/tax/overview/about

Don’t hesitate to contact Horrocks Solicitors today for legal advice regarding your applicable land tax before June 30th arrives this month.

APPLYING FOR A FIRST HOME OWNER'S GRANT IN QUEENSLAND

HOW TO APPLY FOR A FIRST HOME OWNER'S GRANT IN QUEENSLAND

The Queensland Government offers a grant to first home buyers to purchase their first home sooner.

The grant may be from $15,000.00 to $20,000.00 however is only available if you are buying or building a new home. This home must be your first home purchase with a sale price that is less than $750,000.00.

In addition:

• You must be at least 18 years of age.

• You must be an Australian citizen or permanent resident (or applying with someone that is)

You or your spouse must not have previously owned property in Australia that you/they lived in.

• You can buy or build a new house, unit or townhouse

• It can be off the plan or you can choose to build yourself

• You must be buying or building a brand new home

• The value of the home including the land must be less than $750,000.

• You must move into the new home as your principal place of residence within 1 year of the completed transaction and live there continuously for 6 months.

You can click on the following site to check your eligibility for the First Home Owners Grant.

FIRST HOME OWNERS GRANT ELIGIBILITY

While this guide will explain applying for a first home owner grant, and your obligations after receiving it

APPLICATION GUIDE