As we talked in previous articles, there are two types of contract for off-the-plan properties – single contract and two contracts. Single contract usually refers to apartment, townhouse, and house. Two contracts, on the other hand, are usually used for House and Land purchasing process. To understand purchasing process for off the plan single contract, click here to learn more.
Two contracts purchasing process
The two contracts purchasing process is rather similar to the single contract purchasing process; however, there are still some caveats to be aware of.
The first three steps are similar to the single contract purchasing process. en
- Step 1: Expression of Interest – The buyer usually needs to pay a certain amount to express their interest in the property. The earlier the buyer puts down the money, the earlier they can choose the desired floor plan. The buyer can get fully refunded if they decide to withdraw.
- Step 2: Holding Deposit – After choose the property, the buyer will agree to move forward by putting down deposit. Usually EOI can be transferred to deposit.
- Step 3: Sales Advice – Sales agent will provide Sales Advice including property details, buyer’s detail, and sales’ solicitor detail.
- Step 4: Issue Contract – Sales Advice sends to buyer solicitor to issue two contracts: Both land and building
- Step 5: Sign Contract – Now is for both parties to sign the contract. Usually buyer would sign first, then send to vendor for signing.
- Buyer also needs to put down deposit (10% land, building $30k, 5%, or 10%)
- *S.66W – a certificate signed by a buyer solicitor which has the effect of waiving the purchaser’s 5 business day cooling off period.
- Step 6: Contract Exchange – Congratulations! Now you are half way through the purchasing process. Contract is signed by both parties. The date of Contract Exchange Date is counted from vendor signing date.
Step 7: Stamp Duty – Starting from the contract exchange date, the buyer needs to pay Stamp Duty (4% of land only ) within 3 months.
- Noticing there is a difference in terms of Stamp Duty between single and two contracts. While the single contract has some conditions or exemptions regarding when to pay the Stamp Duty in full, the House & Land package (two contracts) buyer must pay in full within 3 months from the contract exchange date; no condition applied.
Step 8: Land Registration – The vendor needs to register land with the council.
Step 9: Home Loan – A home loan is an amount of money lent to an individual borrower by a bank or other loan provider for that individual to finance the purchase of a property.
Step 10: Land Settlement – Land is settled after the council registers the land. Now, the purchasing process will be handed to builders.
Step 11: Final Building DA – Builder needs to get DA approval for the building plan.
Step 12: Construction Starts – After DA approves, the construction can officially start.
Step 13: Payment Schedule – Different from a single contract, House & Land package (two contracts), buyers need to pay the builder and the vendor (for land) separately. Since there are different parts for building construction, including Slab, Frame, Lock-up internal, and Completion, the buyer usually pays the builder separately for each part of the construction.
- Step 14: Settlement Pre-inspection – Since it is off-the-plan property, buyers will be given the chance to pre-inspect the property after it is done.
- Step 15: Occupation certificate Registered.
- Step 16: Handover – Congratulations! Now you are completed with the purchasing process, and enjoy your new home!
- Notice that, given the nature of Off-the-plan properties, vendor usually promises 3 months defects warranty.
Still a little confused about the whole process? Don’r worry our Realtisan team wants to invite you to a 45 minutes free private consultation.
