We are planning to purchase an investment property from our daughter. We will pay the current market price (to help her finances). We are taking out a loan against our home to finance the purchase. Both parties want to minimise costs as much as possible.
Do we both need to engage a solicitor or could we do our own (property is a unit in Qld – body corporate is involved)?
Do we need to complete a full contract of sale?
We welcome any helpful advice we can get.
Hi lachmorr,
Make sure the properties are not cross collaterlised, that is each property has its own contract rather than two properties on one contract and your finances are structured correctly in your favor not the banks. Seek advice from a broker on this.
I would engage the services of a solicitor with each party appointing separate representatives.
A contract of sale would be required as you will need it for legal reasons as well as to attain finance from the bank.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
I recently had a similar situation. My brother and I purchased a PPOR a few years ago and recently I wanted out and he wanted to buy out my half of the property. I was surprised to learn that it is basically like buying a house off a stranger. So yes you will need a solictor for the necessary paperwork to ensure the bank approves the finance and everything (if you are buying outright it may be different, but I would say you would need a solictor to ensure it is all in order).
lachmorr wrote:We are planning to purchase an investment property from our daughter. We will pay the current market price (to help her finances). We are taking out a loan against our home to finance the purchase. Both parties want to minimise costs as much as possible.Do we both need to engage a solicitor or could we do our own (property is a unit in Qld – body corporate is involved)?
Do we need to complete a full contract of sale?
We welcome any helpful advice we can get.
Hello and welcome aboard.
I would recommend using a solicitor – not just because of the legal aspect but it will also save you so much hassle when dealing with the banks settlement area.
You'll need to get a contract drawn up.
Be careful with how the loans are structured. Chances are your current banker/broker will try and cross the two properties up (which is good for the bank – not so good for you).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Colin. I was hoping that as we were buying from our daughter we would have been ok re DIY conveyancing. But I'll take your advice & get professional help.
Thanks for your advice.
I was hoping that as we were buying from our daughter we would have been ok re DIY conveyancing. But Colin also advised similarly to you so I think I'll err on the side of caution & engage a solicitor.
lachmorr wrote:Thanks Colin. I was hoping that as we were buying from our daughter we would have been ok re DIY conveyancing. But I'll take your advice & get professional help.I have seen people who represented themselves and pulled it off. They usually had a background in conveyancing.
I have also seen people do it themselves and it has become a nightmare.
It is money well spent in what can already be a stressful process.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
You can do it all yourself – just like dental surgery or cornia transplants. But it may not be a good idea as you don't know what your don't know.
I had a client come in and see me about something and in passing he told me he was buying his wife's share of an investment property. However the way he structured it none of the interest on teh loan would have been deductible because of a simple but crucial mistake. Also he was not aware of the succession aspects, but it was the tax mistake that was the biggy.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The last client I had who self conveyanced regretted it a lot!
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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