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Let’s start with how the buyer pays the money. Most people hire a conveyancer to handle the transfer of property from seller to buyer and the conveyancer does most of the job - but it helps if the buyer understands the whole process in details.

A day or two before the settlement date buyer’s conveyancer receives from the vendor’s conveyancer details of how the money will be paid - how many cheques buyer should prepare, the amounts and names on the cheques.

Things to know about the cheques:

Cheques can be of two types, personal and bankcheques. The difference between the two is that personal cheque can “bounce” - if there are not enough funds in the account to cover the cheque - and bank cheque can’t, here is why. Buyer has to go to the bank and ask a teller to prepare a bank cheque. The amount of money on the cheque is transferred immediately from buyer’s account into bank’s account and buyer receives a bank cheque, which gives the seller a 100% guarantee they will get their money. Bank cheques cost money to prepare (about $10 each) and personal cheques are much cheaper (we’re talking cents, not dollars)

So what does this mean for the buyer? First, if they are using their own money to pay for the house (as opposed to getting a mortgage loan), the money should be available in their checking account before cheques can be prepared, and not in any kind of savings account. If the money is in a savings account, various limits can apply to amount that can be transferred in one day from savings to checking - so it can take a couple of days until the whole amount is finally in the checking account. If the buyer is getting a mortgage - this issue is irrelevant because all the money is already in the bank’s possession.

A very logical question to ask is - why can’t the seller notify the buyer in advance what are the amounts on cheques so that buyer would have more time to handle this matter. The reason is that usually the vendor has mortgage on the house, which he is paying off with buyer’s money and venodr’s bank waits until the last possible moment to calculate the amount of interest vendor owes on that loan. This way vendor’s bank is trying to avoid the need for adjustments later on.

Another issue to explore is how much is the stamp duty that the buyer has to pay on the house. These two articles explain the smart way of paying just the small part of it from buyer’s own money and to pay most of the stamp duty using FHOG (First Home Owners Grant) and PPR (Principal Place of Residence) concession.

Once a buyer has prepared the cheques and gave those to the conveyancer before the settlement date, his job is done. Now the buyer is sitting by the phone, waiting for the conveyancers to ring and tell him that the settlement went through just fine and he can collect the keys to his new home.

The last stage of this process is the registration of title - the property needs to be transferred from vendor’s name to buyer’s name by Registrar of Titles. It doesn’t happen on the settlement date, simply because by law the buyer must pay the stamp duty first and only then the title to the property can be transferred in his name. Again, the conveuyancers are sending an agent who handles this process for the buyer - the buyer just needs to come up with the check made to the Registrar of Titles to cover the fee for the transaction.

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1) You’ve moved in into the house during the first 12 months after you’ve bought it

2) You’ll live there for at least 12 months.

If the house was bought by a couple or a family, at least one member of that family has to move in and live there for a year.

Again, I don’t want to give you the exact numbers of how much that concession saves you because they constantly change. Roughly, it should get you rate reduction of 1% - and the latest information for Victoria is here.

Naturally, to get the PPR concession there is a 4-page form you need to feel (download here). Your signature needs to be witnessed by someone – if you can’t think of anyone who’d do that for you, just asks your local chemist to witness the form. Give it to your conveyancer together with the FHOG application (you can read about using FHOG to reduce stamp duty here) and enjoy saving another two thousands or so.

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Most people who buy their first home in Australia qualify for the First Home Owners Grant and the Bonus. To check the exact amounts visit the State Revenue Office website - it doesn’t make sense quoting the figure here because they keep changing it. A very handy feature of FHOG (First Home Owners Grant) is that you can offset stamp duty against the First Home Owners Grant and the Bonus.

Basically it means that you subtract your First Home Owners grant from the stamp duty you owe and only pay the rest of it. For example, let’s say you’ve bought a house and paid 350,000 dollars for it, the stamp duty you’ll have to pay is about 13,800 dollars , but you’re entitled to FHOG (5000 dollars) and the Bonus (3000 dollars), so offset that against the stamp duty (13,800 - 5000 - 3000 = 5800) and you only have left to pay 5800 dollars.

After the settlement went through, by law the buyer has to pay the stamp duty within 90 days of settlement. The best way is to fill an application for FHOG (download the application form and guide here) and give it to your conveyancer together with certified copies of the required documents (your application form has a list of those). If you are not sure what “certified copies” are, this article explains how to prepare certified copies of documents.

Don’t forget to tick the box on your FHOG application that says “Would you like to offset the grant against the duty payable on the transaction”. The conveyancer will lodge the application with SRO (State Revenue Office) and let you know how much of the stamp duty you have left to pay.

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2. Take both the original and the photocopy to any of the following people:

• legal practitioner
• Justice of the Peace (JP)
• Magistrate
• notary public
• police officer
• dentist
• veterinary practitioner
• pharmacist
• Certified Practising Accountant
• Member of Parliament
• a minister of religion
• medical practitioner
• officer of the SRO

3. Ask them to certify the photocopy by writing the following statement on it: “I certify that I have sighted the original document and this is a true copy of it“. They also need to write their name, title, registration number (where applicable), sign and date on it.

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If you want to bid online at a particular auction, make sure you’ve rang the real estate agents holding that auction in advance. You can also sign up online, but it’s better to have a word with the estate agent about inspections, the contract of sale, etc.

Personally, I see in this service more advantages then the obvious set. Of course, the sellers will get more exposure and the buyers will get an access to more properties, but the actual fact that people have to travel less – to me that’s a huge plus. Fewer flights will be booked, less petrol will be used – so online auctions is a great example how technology can do some good for the environment.

This video here shows the first aussie home being sold at auction over the Internet, have a look:

The disadvantages of online auctions? I guess buyers agents will get less business and the auctioneers will have to loose some weight – camera adds ten pounds, remember :)?

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You can really get a feel of the neighborhood by looking at cars parked in everyone’s driveways or looking at the types of the other houses in the area. It is easy to see if the neighbors have kids (look for prams, little bikes or swings in front of the house) or dogs (sign on the fence). It is just as good as being there.

This little video explains how to use the Street Level

Try the Street Level – it’s amazingly cool and useful!

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