Sections
  1. The Contract
  2. Exchange
  3. Deposit
  4. Cooling Off
  5. Mortgage
  6. Settlement / Completion
  7. Simultaneous Sale & Purchase

The Contract

It is a legislative requirement that there must be a contract in place before residential property is offered for sale.

This means that you cannot shown a property to potential buyers before you have a complete contract in place.

The contract will have all of the legal obligations that you are committing to and it is our job as Conveyancers to advise you on what they all mean.

There are a number of important considerations that we will need to know about to ensure that your contract is prepared correctly, some of these are: -

  • Have you made any alterations to the property
  • Have all alterations been approved by Council
  • Where are the title deeds
  • Are there any disputes with neighbours
  • Are you liable to pay land tax
  • Once you have sold where are you moving to, and is your move dependant upon this sale
  • Is there a mortgage to be discharged, and if so is it secured on any other property as well
 

Exchange

Once you have agreed on a price with the buyer the contracts have to be "exchanged" before there is any legally binding agreement. The exchange takes place after both the owner and buyer have signed their respective contracts and the buyer has handed over the deposit. Then either the agent or your conveyancer will compare both contracts to ensure they are identical. Once this is done the contracts are swapped i.e. the owner is given the buyers contract and the buyer is given the owners contract (the owner and the buyer's conveyancers may act as agent for the owner and buyer in this situation). The "exchange" has then taken place and that is then the date that is entered onto the contract.

Once "exchanged" the contract is legally binding on both parties.

Deposit

Normally the deposit to be paid will be 10% of the purchase price. The deposit is normally paid to the agent who will hold it in trust until settlement.

These days it is uncommon to invest the deposit as the bank costs involved and agents costs normally outweigh any interest that would have accrued.

If you are also buying another property we can have a special condition in the contract that will allow you to use the deposit for your deposit on the new property.

Cooling Off

All residential contracts have a mandatory "cooling off period" of 5 working days. This means that only the buyer can pull out of the contract without any reason within the 5 working days after the date of the contract. The owner does not have the option of pulling out at any time.

If the buyer pulls out of the contract they will forfeit 0.25% of the purchase price to the owner and the balance of the deposit will be refunded to the buyer.

Once the contract has "cooled off" it will become unconditional and the buyer will be bound to the terms of the contract.

The contract also allows for the cooling off period to be waived, provided that the buyer has had the contact explained to them by a conveyancer and the conveyancer signs a certificate (section 66W certificate) on their behalf. If this is done then there will be no cooling off period and both parties will be unconditionally bound to the terms of the contract.

Mortgage

If you have a mortgage on the property it will have to be discharged at settlement. To do this we contact the bank and provide them with an authority from the borrower to have the mortgage discharged.

The bank will provide us with a payout figure a few days before settlement and whatever this amount is will be taken from the sale price with the balance going back to the owner.

Settlement / Completion

Your contract will have a completion period that is normally 42 days (6 weeks) from the date of the contract. This period can be negotiated up or down before you sign the contract.

Completion also known as settlement is when you finally get paid all of the money for the property and hand over the keys to the buyer.

We arrange the settlement and coordinate any discharge of mortgage to ensure that everything goes through smoothly.

Simultaneous Sale & Purchase

If you are moving from one house to another it is likely that both transaction will have to settle simultaneously. This means that the funds from your sale will be used for the purchase of the new property.

We arrange things so that all of the interested parties (you, the buyer, the seller, the discharging bank and the incoming bank) are all coordinated so that your settlement of both properties takes place at the same time.

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Selling Property