Purchasing property cash.

Anyone purchase property cash before?

What's the process during settlement?

Do u have to transfer afer the settlement amt to to conveyancer in advance a day before settlement ?

Wondering how does it work?

 

These days most settlements use a system called PEXA. Either PEXA or your conveyancer/solicitor will have a trust account to which you transfer the funds for the settlement.

Even if you're borrowing money, you usually transfer the funds to this account, just a lower amount and the bank provides the rest.

The funds usually need to be confirmed in the account prior to settlement. For the sake of everyone's sanity, try to do this at least a day or two before settlement, but I have seen it happen on the same day.

 

@Peter_Tersteeg Can you leave $ in your own bank account and then pexa or the other bank draw from this as is the case with traditional settlement?

 

No.

 

No, that only works when you're borrowing money.

In that case you can put the shortfall for the settlement in an account with the same lender and they draw it from there. As there's no lender in a cash settlement, this doesn't work.

 

I guess the bigger question is why are you buying with cash? Unless it’s an owner occupied house, it’s usually not the best decision to buy with cash.

 

Even then it wouldn't be a good idea, as owner occupied rates could be achieved.

 

I can think of a number of reasons why you'd pay cash. I'm doing this myself for a purchase that is settling shortly.

 

Crazy if you have investment debt - and can qualify

 

Yes, Last year when I sold a property in Victoria. The conveyancer used PEXA.

Just to clarify , so you transfer the $$ to the PEXA trust account as oppose to the conveyancer/solicitor trust account if your conveyancer is using PEXA for settlment?

 

You will need to check with the conveyancer about that. It could be either

 

I bought an investment property for cash last month because I'm unemployed and the bank won't give me a loan. I transferred 10% of the sale price to the conveyancers trust account about a week after signing the sales contract. Settlement was 30 days. About 3-4 days away from settlement I transferred the balance into the conveyancers trust account plus extra for their fee and stamp duty. They itemized everything for me and gave me their BSB and account number. It was an easy process.

 

What's the plan, borrow with owner occupied rates, pay down debt, redraw pay off higher investment debt?

 

That is one aspect.

 

Thanks all...