5 Frequently asked questions you should know before purchasing land and building your next home.
Our experienced Land Sale Agents have put together a list of the most frequently asked questions that they receive from buyers when looking to purchase land. At KR Peters, our experienced Sales Agents have been selling land in Eastern and South-Eastern Melbourne for over 30 years, and have sold thousands of blocks of land.
What are the payment terms?
Each estate is different, so you are best to clarify with the Sales Agent you are purchasing from to ensure what their policy is regarding payment terms. However, we have found most Estates tend to take a $1000 holding deposit whilst drawing up contracts (which is usually refundable if you decide to cancel your hold), and either a 5% or 10% deposit is required 14 – 30 days after signing contracts. The remaining 90% – 95% is paid when the land settles.
How is stamp duty calculated?
Stamp duty (or land transfer duty) is a fee payable by everyone who purchases land in Victoria. Stamp duty is calculated based on the market value of the property. Stamp duty takes into account whether you are a foreign purchaser, first home buyer, if the home will be your principal place of residence (PPR) and your contract and settlement date. Stamp duty is different for everyone depending on all of the above circumstances, the State Revenue Office provides a calculator which will give you an estimate on what amount of stamp duty may be applicable.
Why do I need a conveyancer and how much do they charge?
A conveyancer is employed by you once you have purchased land. Your Land Sales Agent should send you an email of your land contract before you sign, your conveyancer will then go through your land contract before you sign it to ensure your rights are protected and go through anything you may be unclear about, such as; special conditions, zoning or owner’s corporation. They will also assist you with the transfer process once the titles are lodged, this means they help transfer the land from the original owner’s name into your name, this happens just before settlement and you are able to then begin building. They are there to help and support you, making sure you meet all your necessary legal responsibilities. On average a conveyancer will charge you approximately $600 – $800 for their services.
What is a sunset clause?
A sunset clause refers to the maximum amount of time that a developer has before the estate must be completed. Each estate is different, so make sure your conveyancer checks how long the sunset clause in your contract is, generally a sunset clause is 18 – 24 months. This means that if your block has not settled by this time, you are legally entitled to cancel your contract and receive a full refund, however it must also be noted that the developer (Vendor) is also entitled under this clause to cancel the contract also (which rarely happens).
What is an easement?
If your block of land has an easement, that gives someone else the right to use that land for an explicit reason even though they do not own that portion of the land (for example, you and your neighbour might share a driveway). When it comes to land, most easements are over drainage and sewerage pipes and are put in place to ensure you do not build on this portion of land in case you damage the pipes or access is needed.
If you are in the market for a land, we are releasing the much anticipated first release of ‘The New Bloom’ in Clyde North on the 29th April 2017. To register your interest, please click the logo below.