How exciting! You have found a property that you would like to buy and have had your offer accepted! And to show how serious you are, you have handed over a $1000 holding deposit. Only thing is, a holding deposit holds nothing.

Now I do not know why some agents persist in getting a holding deposit from buyers since, in NSW, once you have had an offer accepted on a property there is absolutely nothing binding until contracts have exchanged.

There are two ways you can exchange contracts on a property. But you will not always be given the choice of which one to use.

The first way is with a five day cooling off period. You can do this in the agent’s office on a Saturday afternoon if you like and you don’t need to get any legal advice prior to doing so. It is commonly the done thing to pay an initial deposit of 0.25% when you sign the contract and the balance of the 10% prior to expiration of the cooling off period. By exchanging contracts with a cooling off period you will have 5 business days to complete your due diligence. This process includes getting your contract reviewed, building & pest inspection and/or strata search done, finance approved and balance of the deposit arranged.

The benefit to you is that the property is then off the market. The vendor cannot entertain offers from any other buyers and only you can change your mind – but if you do so, you will incur a penalty of 0.25% of the agreed purchase price. So, say you have offered to pay $500,000, this penalty would be $1250.

The main reasons for backing out within the cooling off period would be either a bad building inspection or strata report or an inability to come up with the finance. We hear of plenty of buyers making offers before they have finance approved but even if you have pre-approval, the bank could take longer than the 5 days to give you an unconditional finance approval or the valuation could come short

One thing to bear in mind here is that in a competitive market, or if you have made a pre-auction offer, it is highly unlikely that you will be given the option of exchanging contracts with a cooling off period.

The second way to exchange contracts is to sign an unconditional contract. The only way you can do this (other than at an auction) is to have your solicitor or conveyancer review the contract, advise you on it, then issue a Section 66W Certificate. This certificate waives your cooling off period, making the contract unconditional. Under these circumstances you need to have done all your due diligence - the contract reviewed, building & pest inspection and/or strata search done, finance approved and deposit arranged - before signing a contract.

The risk here is that while you are busy doing your due diligence, the property is still on the market and other buyers can make offers. Time is of the essence and you need to keep the pressure on your banker, solicitor and inspector/s.

So, back to the issue of a holding deposit. Our advice is to only hand over a deposit at the same time you hand over a signed contract – and get some assurance of exactly when the exchange is expected to take place. A holding deposit is simply an unnecessary step in an already complicated process. All it really serves to do is give the inexperienced buyer a false sense of security.

When I was a selling agent I learnt that buyers become experts in their price bracket for the period of time in which they are seriously looking for a property. They have an intimate knowledge of what they can get for their money in a way that a local real estate agent can’t. The agent has to be abreast of all property types in their geographical area, and across all price points and as a result, their knowledge will always be a little more general than that of the avid property hunter.

You, as a buyer, will most likely have personally inspected every property that vaguely suits your requirements, including those slightly above and below your budget. After a period of intensive property searching, you will probably know instinctively a property’s value immediately upon entering the front door. You will also get to know the most active selling agents in your area and begin to glean additional information from them.

But this knowledge does take time to accrue. It can be extremely useful when it comes to negotiating a deal and can help you to avoid making a poor property purchase. Our advice is to always make a decision after acquiring as much knowledge as possible about your chosen market. But if time is not on your side and you have found the perfect property, be aware that the lack of knowledge may cost you – either by missing out on your dream home or you by succeeding in securing it by paying a premium price. Maybe time to call in the professionals…

Despite the push for a greener world and various initiatives to reduce the amount of cars in the CBD, those of us who choose to live in the inner suburbs still have a high reliance on our own car as a mode of transport.

Unfortunately many of these suburbs came into existence long before Henry Ford invented the motor car and early town planners did not take into account provision for parking for the residents in the Noughties. We see properties in all price brackets without parking and we estimate that some of the inner suburbs (Darlinghurst and Newtown, for instance) as little as 25% of the houses could have parking. So when it comes to purchasing property, it doesn’t take a genius to work out that a carspace is a definite asset! The existence of a carspace has been estimated to add as much as $200K to the value of an inner city property and this figure drops to around $50K in areas with more available on-street parking.

But the reality is that despite the limited availability of off-street parking people desire to live in suburbs close to the city. As a result, there is distinct competition for on-street parking spaces and all local councils have a parking scheme designed to give favour to its residents.

These schemes all generally work on similar lines. If your property has no off-street parking you will usually be eligible for the maximum number of permits. If you have one carspace, you may be eligible for a reduced number of permits. If you are lucky enough to have two or three carspaces on your property, you won’t be getting any additional permits from your local council.

All councils charge a fee for their permits. But if you live in Leichhardt Municipality you won’t be paying anything unless you lose your permit and need to replace it.

The City of Sydney council area probably faces the most fierce competition for on-street parking and they also have the most complicated residential parking scheme, compounded by a development control plan that means some residences are not eligible – I guess they are trying to make developers include parking in their plans as well as discourage individuals from owning cars.

See below for a brief overview of each council’s maximum permits and links for more information.

City of Sydney Council

http://www.cityofsydney.nsw.gov.au/AboutSydney/ParkingAndTransport/ParkingSchemes/
A maximum of two permits are available per eligible property. This entitlement is reduced by the number of on-site parking spaces available for the property, within the property.
Fees apply
Residents of many newer properties are not eligible for permits, or are eligible for only one permit.
In Ultimo and Pyrmont, certain residential developments approved after 2 November 1998 are ‘Restricted Properties’. Residents are generally entitled to only one permit per property, reduced by the number of on-site parking spaces available for the property. Contact the City for more information.
In the City East and City South precincts, residents of multi-unit developments approved after 8 May 1996 are not eligible to participate in the resident permit parking schemes.
In the CBD precinct residents of all developments approved after 1 May 2000 are not eligible to participate in the resident permit parking schemes.
There are also a number of other newer properties in the City of Sydney that may not be eligible. Contact the City for more information.
Not all permit types are available in all City neighbourhoods. Visitor Permits are available only in Pyrmont, Ultimo, Glebe and Millers Point, while Business Permits are only available in Glebe, Ultimo and Pyrmont.
The City of Sydney is developing a standard permit parking policy that will address this inconsistency.
From a buyer’s perspective, this is important: It is a condition of development consent for new developments that residents will not be eligible for resident parking permits. This helps to limit the increase in parking demand and traffic from new developments. The restricted access or ineligibility condition is recorded on Section 149 (5) Certificates for the affected properties, and must be notified to all prospective buyers and tenants.

Woollahra Council

http://www.woollahra.nsw.gov.au/services/parking/parking_permits
There is a maximum of two residential parking permits issued per property. The number of permits issued per household is reduced by every off-street parking space available at the property, nil off-street parking spaces – eligible for two permits, one off-street parking space – eligible for one permit, two or more off-street parking spaces – not eligible for a permit.
Fees apply

Waverley Council

http://www.waverley.nsw.gov.au/transport_and_parking/parking_services/resident_preferential_parking_schemes
A maximum of three permits may be issued to any residence. The maximum number of permits is reduced by the number of off-street parking spaces available.
Fees apply

Randwick Council

http://www.randwick.nsw.gov.au/Moving_around/Roads_and_transport/Parking_permits/index.aspx
The maximum number of permits per dwelling is three. This number will be reduced for every off-street parking space available at your residence.
Fees apply

Marrickville Council

http://www.marrickville.nsw.gov.au/services/parking_permits.html?s=1519182565
There is a limit of 2 permits per approved household and are only issued to permanent residents.
Fees apply

Leichhardt Council

http://www.leichhardt.nsw.gov.au/Permit-Parking-Scheme.html
Maximum number of permits per household is two + visitors permit in some areas.
Initial permit free of charge – payment required for replacement permits.

North Sydney Council

http://www.northsydney.nsw.gov.au/www/html/6359-resident-parking-frequently-asked-questions.asp
Maximum of three permits per residence.
Fees apply

Mosman Council

http://www.mosman.nsw.gov.au/residents/parking
Two permits per residence maximum provided there are two registered cars at the address.
Fees apply
As a nice touch for locals, the owner of each rateable property in Mosman is entitled to 1 free parking sticker enabling the vehicle to which it is permanently fixed to park without paying a fee at the following foreshore reserve carparks: Clifton Gardens, Balmoral South (adjacent to oval), Rosherville & The Spit – East, West and Ellery Park

Willoughby Council

http://www.willoughby.nsw.gov.au/Community/Traffic---Transport/Parking/Residential-Parking/
Each household can apply for a maximum of 2 permits. If the residence has one off-street parking space, the household can only apply for one permit. No permits will be granted to residences with two or more off-street parking spaces.
Fees apply