I want to buy a property and offer a long settlement ??? how???

Hi

 You could go to a bank that you have a good relationship with, and ask for a deposit bond (these are not free and you will have to pay the bank some commission for it), this is considered a deposit. 

I have used this in the past, but not sure how banks look at this now during the GFC.  However, this is a binding contract with the Bank (unless cooling off ) and must not be done unless you are guaranteed that you will have available funds to meet the deposit at a specified date.

  Once you sign a contract to purchase a property and pay  deposit  it is binding, unless you put some types of special conditions in there, and these should be worded by your legal representative and not the Real Estate Agent. These must be specific and not leave any room for doubt about what the conditions are for.

Contracts will then become binding once these conditions are met.  stamp duty willgenerally be taken out of your account once settlement has gone through and these funds must be available in the account the bank sets up for the loan, or check with your lender for their requirements.

Settlement is when the discharging bank and the incoming bank meet to exchange money on the contract and the title is exchanged with your name on it, and the bank listed as Encumberance on the Certificate of Title.

Buying a property on a long settlement is possible, but for the seller (Vendor) it is not something they may want to consider, unless

     1) You are willing to pay full asking price for the property

    2)  Your offer is unconditional or with as little conditions as possible

     3)  They already have a property in mind, and are not in any hurry to move.

Buying a property as one person and then nominating another person, company or trust is possible if you wish to nominate and or/nominees as Purchaser in the Sale of Contract.  This can be risky for the Vendor as they cannot identify who the Purchasers' are however, the original Purchaser remains liable under the contract.  Stamp duty may be payable by the original Purchaser if they stand to make a profit from the property,  from changing or nominating a new Purchaser.  Solicitors or Conveyancers' will get a nominated Purchaser/Company or Trust to fill out a Statutory Declaration form which they then sign.  A company who is nominated will generally be expected to provide a Company Seal document with those authorised as Directors signing it so make sure you have the authority to act on whoever you wish to nominate.

Cooling off periods apply these are some of them, but you should check with your legal representative and the Contract

  a) the property is not sold at public auction or within the same business day after auction

  b) the property is 2.5 hectares or more

  c) a Section 66W certificate is given to the Purchaser and they sign it thereby waiving their cooling off rights

There are other cooling off rights and variances which can also be varied or withdrawn if certain conditions are met.  For example the right to cool off is not added to the contract as part of the Sale and the Purchaser is not made aware of it, in this case the Purchaser can rescind right up to settlement day and they do not lose part of their deposit (eg 0.25%)

Cooling off conditions should not be taken lightly and must meet strict conditions, the Law at present allows 5 business days after signing of the Contracts and start immediately you sign the Contract not including weekends and public holidays. 

If the contract is ended because some special condition is not met there is no requirement to pay the penalty clause of 0.25% of the deposit.  

A property can be purchased at whatever the Purchaser is willing to accept as a deposit,  however the usual amount is usually 10%, this generally covers the Vendors' agents fees, and also what they take the penalty of 0.25% if you cool off.  It also makes it more attractive to the Vendor as this gives them surety that the purchaser is genuine.  Sometimes contracts can vary these terms and these need to be agreed to by the Vendor and Purchaser.  In NSW a deposit must be paid and contracts exchanged to make the contract legal.

DISCLAIMER

I do not promise that these are all the conditions that are relevant to your contract and only a Solicitor or licensed Conveyancer in NSW can advise you of these once you have the Sale of Contract relevant to the property you wish to buy and the information supplied may or may not be relevant to you and should not be used as legal and binding advice. The information I have given has been based on genuine property purchases that have involved these or similar terms and I do not claim to give you legal advice as most of the information here can be considered General Information and can be checked using the NSW Office of Fair Trading Buying a Property

These conditions are only relative to residential property and do not apply to the Sale of Commercial Property.

So please check any Contract over with your legal representative before signing anything

Good luck 

In regards to onselling the property before settlement, recently my sister bought property from someone who was onselling to her before settlement. The original buyer was trying to sell at a small profit but was told that if that was case, then both he and my sister would pay stamp duty, however if it was onsold at the same price as what it was originally bought for, then only my sister would pay the stamp duty. Considering the small profit would have left the original buyer in the same financial state after stamp duty, he decided to onsell for the same price as the original purchase and incurred no stamp duty as a result.

1) Legal ownership takes place at settlement, but obligation takes place after the cooling period is over and all special conditions (such as finance) are satisfied.

2) In VIC, stamp duty is payable at settlement.

3) If you put "Joe Bloggs and/or nominee" as the buyer on the contract of sale, you don't have to worry about the precise name or names until close to settlement.  (Joe Bloggs should be replaced with your name).

Cooling off period is a fixed period of time as per real estate law.  There is no cooling off period for the vendor but there is for the buyer.  I believe it is 3 days.

4) Deposit is indeed negotiable.

5) In VIC the both of you would pay stamp duty.  I am not 100% sure about other states.  That said, if you had and/or nominee on the contract of sale the situation might be slightly different.  I am sure someone more in the know about such things will comment.

Now here is my opinion;

I don't think it is a particularly good idea to put something under contract if you will not be eligible for finance for another 7 months.  While you might get agreement on a long settlement, the vendor is not going to let you mess about trying to get a bank loan for 7 months.  They'll give you around 4 weeks max.  So in a nutshell I don't see the vendor agreeing to a 7mth finance clause which means you could not buy the property under your current plan.

Here are my answers

1. Legal ownership changes at settlement, but you would have a beneficial interest in the property at exchange.

2. In NSW the stamp duty is payable within 3 months of contract date or at settlement whichever is earlier

3. This would be treated as a sub sale so both you and the new person would pay stamp duty – unless a family member under some circumstances.

4. No min

5. Both pay

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Sounds like you're keen to start your property adventure but really-

If you don't have any deposit and haven't been approved for finance who in their right mind would sell you a property and wait 7 months in the hope that you can follow through on the contract?

I am in the reverse situation of being a seller who actually wants a 6-month settlement on the sale.

Because i am locked into a fixed rate loan until Feb 2014.

I guess there are sellers in a similar situation to me. Having said that i agree with the other posters as to the inherent risk.