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Open a bank account
You can make monetary transactions in Australia by bank transfer, but it is not necessary to open an account in an Australian bank. Local legislation allows you to transfer directly from abroad to the trust account of a real estate agency, lawyer, or developer. The money comes to the account in the local currency – Australian dollars.
Anyone who plans to stay in the country should go to the bank without delay. In the first six weeks, a foreigner needs only a passport to open an account. After this period, you will have to submit not only his but also a valid visa, a certificate from your place of work or study, and utility bills.
You can open a checking account remotely before arriving in the country. It facilitates the money transfer procedure. However, full activation of the account and transfers from it can be carried out only after a personal visit to the bank in Australia.
The real estate buyer will also need an individual taxpayer number obtained from the local tax service for financial transactions.
Preliminary mortgage approval
If you intend to get a mortgage, it is better to do this in advance, because you will understand how much you can count on it.
Real estate in Australia is in high demand. Sale conditions are often dictated by the seller. If the buyer likes the object, they make an offer to the seller.
It can be oral or written and is accompanied by a deposit, which amount is usually in the range of 500-5000 Australian dollars ($350-3,500), depending on the cost of housing. These funds will be taken into account when concluding a preliminary purchase and sale agreement. If the buyer changes their mind, they get a full refund. However, some developers withhold a penalty of 500 Australian dollars.
Since the buyer of the object may not be alone, the seller can arrange an auction. It is a common practice in Australia, mainly for secondary real estate. The auction can take place directly or in secret, then buyers bring envelopes to the realtor, in which they put their price offers. Whoever offers more - wins. The winner must immediately pay 10% of the property price.
After submitting the application/offer, the seller sends the contract of sale to the potential buyer. A sample contract, all documentation for the property, must be prepared in advance. Without this, it simply will not be put up for sale.
When making a transaction both on the primary and secondary market, the buyer can immediately sign the contract, or he can take time to study the details. But in the second case, there is a risk that the object will not wait for it.
The buyer signs the contract
In this case, there is an exchange of contracts (contract exchange), and the property is withdrawn from sale.
According to Australian law, the buyer has the opportunity to cancel the transaction within five working days after signing the contract with a loss of 0.25% of the value of the object.
During these five days, the buyer's lawyers conduct a contract examination and the attached documents. When buying real estate on the secondary market, a technical inspection of the building takes place at the same time (including for the presence of termites).
The buyer checks the property
The buyer receives the draft contract and conducts a legal and technical inspection of the object. In this case, the object is not removed from sale, and it can be purchased by someone else if he signs the contract first and exchanges contracts.
An important feature of the Australian market is that a purchase and sale transaction is considered concluded only after the exchange of contracts. Before that, the owner has the right to sell the object to another bidder, even if you signed a contract and paid the deposit.
If the buyer plans to apply for permission from FIRB after the purchase of the property, then the contract should reflect the terms of termination in case of a negative response. You can specify that FIRB's refusal allows you to terminate the contract without consequences, and the client can get all the funds back. However, such contracts (conditional contracts) rarely suit sellers, so you should not count on such an option.
The contract of sale is concluded with the developer or the agent in the presence of witnesses who also sign the contract. As a rule, the developer, their agent, and the lawyer participate in the transaction, and the buyer and the agent on the other side. The contract specifies the date (settlement day) when the seller's account will receive the entire amount due to him.
A lawyer (solicitor) checks the purity of documents, the rights of the developer to land plots, and the timeliness of paying taxes and obtaining permits. The entire package of documents for real estate (statements, certificates, etc.) is included with the contract of sale.
The seller is obliged to provide the buyer with originals or copies of the following documents:
If it is a secondary object, the buyer inspects it again immediately before the state registration. The law prescribes that the object must remain in the same condition as during the inspection at the time of acceptance of the sale agreement.
The final settlement date between the buyer and the seller is specified in the contract (settlement day).
Lawyers and a bank representative are engaged in settlements, exchange of documents, and their transfer to government agencies.
Stamp duty is also more appropriate to pay during the registration process. This will be done automatically if the lawyer has received the right to withdraw funds without acceptance of the transaction from the buyer. Stamp duty can be paid within 15 months after signing the contract of sale or when registering the built housing - depending on what happens earlier.
After the seller received the money, the transaction is considered completed, and the buyer receives the keys to his new home.
It usually takes at least 42 days from the moment of the exchange of contracts to the payment of stamp duty.
You can buy real estate in Australia remotely. This method became particularly widespread during the coronavirus pandemic. Now realtors use virtual tours and drone footage to show an object that is hundreds or thousands of kilometers away from the buyer.
In this case, it is especially important to find a good realtor who will select a suitable object for you and study all the transaction details. They (or another person living in Australia) will need to issue a power of attorney (power of attorney), which will allow him to purchase property on your behalf.
