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.
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.
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.
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
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.
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.
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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