It won’t be finished for 18 months?
Off the Plan or Turn Key purchases:
This type of purchase involves securing a property before it is built and you will be required to put down a 5% deposit generally, sometimes 18 months to 24 months before completion. In this case it is recommended that you apply for a deposit bond so there is a lower risk of you losing your deposit or having your deposit held back for some years if the builder you engaged discontinues.
Timing:
In the cooling off period you will be required to organise:
a) the necessary building and pest reports (done by your conveyancer).
b) a formal approval – Your broker will progress your pre-approval to a formal approval (valuation will be ordered by your broker at this point and signed full contract of sale will be sent to your lender to move to formal approval). Please note that for a turn-key or off the plan purchase the valuation cannot be done until you are provided with an occupation certificate (which is generally when access to the property is available)
c) Deposit Bond- At conditional approval – for off the plan , or at formal approval for a standard purchase , if you do not have a cash deposit, your broker will apply for a deposit bond which sits instead of a cash deposit.
2. Formal Approval.
When you have an occupancy certificate from the vendor and a valuation can be done by your lender, a formal approval is given to you by the lender which will confirm that your loan application process is complete.
At this point:
a) Loan docs will be sent to you by your lender for mortgage signing etc (takes approx. 1 week to arrive).
b) A standard settlement period is 42 days from the initial signing of the contract of sale (exchange of contracts) to settlement. Vendor solicitor, your conveyancer/solicitor and your lender solicitor work towards preparing and certifying all documentation, ready for settlement. Your conveyancer will advise you about how Stamp Duty will be paid.
c) You will be asked to provide a certificate of currency (home insurance) to ensure the property with the interested party listed (You will be notified of this in the loan documentation).
d) Once loan documents are ready for settlement you will be given a disbursement sheet by your conveyancer outlining what cash funds to complete the purchase will need to be provided by you over and above the loan amount and all parties will be booked in to an automated settlement portal called Pexa to finalise settlement.
e) You do not need to be present at the settlement.