Simon Eddy is a freelance journalist. He lives on the NSW coast with his wife.... Read his humorous article to find out why and to gain some valuable advice as to how you can retain your sanity when investing or purchasing interstate...
Many people on reaching the grand old age of 40 sit back and evaluate their life, leading in some cases to radical changes in lifestyle and sometimes even one's personality. A family friend, for instance, took the radical step of dressing up as a woman and insisting friends now called him Michelle.
In my case it involved leaving behind an expensive shoebox in the South East of England and emigrating to Australia.Suddenly my wife and I found ourselves in a rundown shack on 9 acres north of Brisbane (big enough for an entire housing estate in England) with no transport, no job and sharing our temporary abode with 3 horses, 4 dogs, a manic depressive and a woman who thought she was Nelson Mandela's sister.
Thankfully our time in this asylum was relatively short. Soon we were happily ensconced in a beautiful 3 bedroom home with twice the space and half the mortgage we had endured back home.We were living the Aussie dream.
Fast forward three years and with the feet starting to itch again, my wife and I fell in love with the Bay and Basin area on the south coast of New South Wales and took the impulsive decision to leave behind our little piece of Aussie suburbia and make another big move. After moving half way round the world a move within Australia, albeit interstate, would surely be a breeze.
After all, the 'powers that be' tell us that 1,000 Australians are moving to South East Queensland each week and every time you pick up a property magazine there are the latest recommendations for investments in pretty much every state.Not to mention the fact that Australia is a land that has been populated by migrants for the past 200 years from every corner of the globe. Movement and change are an integral part of the Australian gene pool.
Our confidence, however, was to be misplaced due to a complacency that led us to ignore the most important aspect of a move and ensure the whole process became not only costly, but thoroughly miserable as well.
Read any literature about the property market and the key piece of advice that reverberates through all articles is the importance of research. But don't be fooled into believing this is limited to understanding the marketplace and the environment where you are planning your new home or latest investment.Critical as it is, when moving interstate this only forms part of the picture.
As Australia operates a federal system of government, whereby each state has its own government and laws, remember that these include the buying and selling of houses.Differing legal requirements mean either finding a solicitor proficient in the property laws of both states, unlikely even in the capital cities, or having two solicitors acting on your behalf.
In effect therefore, you will have two sets of solicitors, buyers, vendors and real estate agents involved, which is more than likely going to lead to confusion and drawn out lines of communication.
It is helpful to ensure that the solicitors you appoint have regular experience of interstate moves and are prepared to talk to each other.Removing as many parties as possible from the loop and leaving it to the professionals alleviates stress and hopefully leads to a smoother transition towards settlement day. Otherwise you may find yourself in a constant round of frantic phone calls and contemplating life in an asylum as a distant cousin of Nelson Mandela.
Also worth considering is getting a conveyancing quote which includes a fixed (or estimated) cost for communication items – telephones, faxes and postage. Moving 1,500 kilo
metres removes the ability to pop in and collect or drop off legal documents, telephone calls will naturally be more expensive and a surprise expense at the end of the journey is worth avoiding.
Unfortunately stamp duty cannot be avoided. The easiest way to get a handle on the costs you are likely to incur is to visit the Office Of State Revenue website for the state you are purchasing in (osr.state initials.com.au). There are also a number of helpful sites that provide a comparison between the states, though you may need to brush up on your maths degree to understand the formula for calculating dutiable value.
Stamp duty varies quite dramatically state by state. According to the Money Buddy website, duty due on a property with a dutiable value of $300,000 ranges from $8,975 in Queensland to $13,660 in Victoria. So it pays to research upfront in order to budget accordingly and leave yourself with enough money to afford something more than just a horse and cart to transport your belongings.
But before worrying about the number of people involved in your simple idea of moving interstate, before instructing solicitors and worrying about stamp duty or the small matter of transporting your worldly goods, there is one important detail that can easily be forgotten.
The process of buying a property is not uniform and it is essential to have an understanding of what to expect. Many real estate agents have excellent websites that provide a simple guide to the buying process in their state, or alternatively visit the Office Of Free Trading website for the state you are interested in. These provide a clear understanding of what is required.
For example, in Queensland once an offer has been accepted the real estate agent will submit a Contract Of Sale to the vendor, signed by the purchaser.Once signed and dated by the vendor, the buyer has 14 days to obtain finance and between 7 and 14 days to carry out a Buildings and Pest inspection. The total length of a contract is normally 30 days.
In New South Wales however, it is subtly different. Once an offer has been accepted a 'sales advice' is issued by the real estate agent, which details the names of the purchaser, any special terms or conditions and a list of items included in the sale. Contracts are not exchanged however, until written approval of finance has been received, as well as a satisfactory Buildings & Pest report.
When dealing with the finance company providing your mortgage, make sure that they are fully aware of the requirements you have to purchase in the state you have chosen.
With the myriad of mortgage options now available on the market, there has been a rapid increase in the number of mortgage advisors. Armed with research necessary to make your move, do not assume that your mortgage advisor knows all the different purchase requirements for your state.
For example, to get an unconditional financial approval in Queensland the signed contracts are required. However, if you are purchasing in New South Wales these are not available until written financial approval has been received.
By following these simple guidelines and doing the necessary research, a move or property purchase interstate may not be a totally smooth journey, but it will certainly be a lot easier than the alternative.
By not following these guidelines, my wife and I found ourselves in a ridiculous situation. Our mortgage advisor told us that we could not get mortgage approval without signed contracts, which is correct in Queensland. But as we were purchasing a property in New South Wales we could not sign contracts without the mortgage approval.
Though resolved when an excellent and experienced manager took up our case, the whole situation would have been avoided had we done the necessary research and asked the relevant questions.
No matter how much experience one might have in the property market, whether it is moving half way round the world, investing in a property portfolio or just breaking out from a 9 acre menagerie of wildlife and crazy people, the key is to not be complacent and do one's homework. Do not just rely on the so called experts, be informed and make informed judgements.
Alternatively, you could always just ask Michelle what she thinks of it all.
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