There is no doubt that buying and selling property can be incredibly lucrative if done correctly. So much so, that some individuals buy property, undertake quick renovations and then subsequently sell that same property for a higher price. This is known as ‘flipping’ a property, and in doing so, some stand to make hundreds of thousands of dollars within a relatively short space of time.
However, the process is not always so simple and a few crucial mistakes can be the difference between a success and a failure. Whilst renovations might give some nightmares, the legal ramifications of incorrect conveyancing are far worse.
Conveyancing is the act of transferring the title and ownership of land from one party to another. This includes the preparation and filing of all necessary documents to process the transfer. However, lawyers and conveyancers can be used for a variety of property matters ranging from sub diving land to registering, altering or removing an easement.
Whether you are buying or selling a property, you will want to do everything possible to ensure you get the best result. That starts with making sure the sale contract is sound and not going to leave you liable. Once a property has been sold, there is a period of time between the signature of the contract and the handing over of the keys, known as the settlement period. During this period, a variety of steps must be completed in order to ensure a successful and beneficial settlement. While the length of a settlement period can vary, it is usually a period of four (4) to six (6) weeks.
Buying a Property
As a purchaser, a variety of steps must be taken in order to ensure a successful sale. Certain legal documents must be drafted between the parties, adhering to specific conditions. Additional certain conditions may also need to be addressed in regards to the purchase of a property and can vary greatly depending on the circumstances surrounding the property and sale. Utilizing a conveyancer or solicitor allows you to rest easy knowing that everything will be taken care of for a successful purchase. This includes all the drafting of documents as well as understanding which fees apply and which do not.
The conveyancer or solicitor can also assist in coordinating the ideal time for settlement as well as contacting the bank and ensuring all necessary funds are accounted for. All of these obligations can be quite complicated and can make the settlement period incredibly stressful for both buyers and sellers. As such, you may wish to use a solicitor to streamline the process, especially if you are engaging in buying multiple properties.
Selling a Property
Selling a property can be equally stressful and if done incorrectly can leave you facing a loss of profits and potentially facing legal liability. As a seller, drafting documents such as the Contract of Sale, the Form 1 and the Vendor Statement must be undertaken and completed in a particular manner. Furthermore, the seller is also responsible for handing over the Certificate of title.
A solicitor or conveyancer can also assist in identifying further legal obligations that may extend to you depending on the individual circumstances of the sale. This includes ensuring that the property is turned over in the exact condition specified in the Contract of Sale and that any tenants (if any) are correctly notified.
Taxes and Costs
While the relatively quick profits may seem attractive to those looking to begin flipping properties, it is important to consider all the hidden costs when doing your estimates. The process is not as simple as just buying a house and then selling it with a variety of different fees needing to be paid to complete the process. For example, coinciding with the transfer of the property, a stamp duty fee must also be paid. Another example is calculating Capital Gains Tax for the profit derived from the property. Incorporating these fees into your estimate can be the difference between a successful and unsuccessful property flip. Goods and Services Tax (GST) also applies to certain properties which many aspiring renovators fail to realise exists.
Understanding what these costs are and how they influence your profit margin is a must for anyone looking to break into the housing market. Dealing with these factors on a sale by sale basis is something that a solicitor or conveyancer can help you with to ensure you get the best result possible.
How We Can Help
There is a common perception that solicitors are more expensive than conveyancers, but at Georgiadis Lawyers, we fix our fees to allow us to provide a comprehensive service for your property matters. Unlike other conveyancers, we are able to prepare all the legal documentation for you and provide you advice on any legislation or regulations that may apply, and then also expedite an efficient settlement by way of our expertise in e-conveyancing.
If you need assistance with a conveyancing matter (either buying or selling) or would like more information please contact us.