I am a solicitor and have seen many people get into trouble. Many will sell and buy at the same time and assume the sales will go through as per the contract however things don't always happen this way.

Imagine having to be out of your house tomorrow so the new purchasers can move in. At 4pm you find out there is still a tenant in your new house and he is not going to move out because he cannot find accomodation.

Or the new buyer refuses to settle because there is a stratch on the kitchen floor that was supposedly not there before.

These sorts of things have a domino effect too. The tenant in your new home won't move out so you cannot settle of your sale. This could in turn affect the person buying the house of the guy buying your house as he cannot move out either.

Idealy you should be able settle on the sale before the purchase, or have enough funds to have both houses for a period of  6 months at least.

Another problem is committing to a purchase thinking you will be able to sell your house quickly and then finding it is harder than expected. This often leads to immense pressure and results in people selling their house much cheaper because they don't have the time to wait.

To make things simpler I would change the loans to IO with a limit of the existing balance. Then get a LOC up to 80% LVR for the remainder.

WHen you buy the new home borrow the deposit from the LOC and get the remaineder from a new loan. Make sure only one property is securing each loan and take an 100% offset account on the new PPR loan.

If you took the money from the redraw the interest on this wouldn't be deductible and you would be mixing investment and personal loans so it is not advisable to do it this way.

Yes, ideally you should gift or loan a bit extra to the trust to cover any shortfalls for a short period. But I find that many people don't have the spare cash to do so and they end up transferring cash each month. This is not ideal as it looks less like a separate entity then and more an extension of the individual.

A trustee must manage the trust they are trustee of. They cannot delegate this role to others however, they can seek advice from professionals.

Most states allow duty free transfers from one to two names. I think VIC is one of the few that allows two to one name as well.

You should have not resigned from the existing job. Some banks can and do employment checks again closer to settlement.

If you are gifting the money to the trust then you could not claim a deduction on the interest on the money paid from the LOC. A gift is not an investment and will not produce any income or return. So interest on borrowing to make a gift would not be deductible.

If you borrow and onlend to the trust at the same rate then the trust would end up claiming the deduction of interest.

Yes, it should be disclosed.

Whether to do it with a trust or not will depend on whether you will live in it and claim it as a main residence.

There are also ways to structure it so that only one of you has to guarantee the loan.

You are a brave man! Going on th word of a public servant!!

Here is a recent VIC case where the purchasers signed and agreement before the trust was established.

Scouller and Anor v Commissioner of State Revenue (Taxation) [2011] VCAT 998 (31 May 2011)

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/vic/VCAT/2011/998.html