Step 1: Pre Purchase Inspections
Before you purchase a property, arrange all necessary inspections on the property. The Contract for Sale of Land does not cover the quality of the building(s) on the property. What you see is what you get otherwise known as “Caveat Emptor” or “Buyer Beware”. For a freestanding house both a pest inspection, which will advise on any past or current pest activity affecting the property and a building report, which will advise on any structural problems would be recommended. You may also want to consider having the electrical wiring and plumbing examined, as this is not covered in a building inspection.
If you are buying apartment, townhouse or villa you will require a strata report. This report summarises inspection of the strata records of the Owners Corporation, identifying insurances in place, quarterly levies, any special levies, the financial position of the scheme, any ongoing maintenance problems and any issues noted in minutes of Owners Corporation meetings.
Step 2: Exchange Contracts
Exchanging contracts is the legal process of buying property. There are two identical copies of the contract for sale, one for the Purchaser and one for the Vendor. The contracts are signed by each party and dated, then swapped or ‘exchanged’. The contract is then binding on both Purchaser and Vendor.
Before exchanging contracts, there may be some amendments required to the contract. For example, change of settlement period or amount of deposit.
Sydney West Conveyancing will review the contract and discuss your personal requirements before commencing negotiations with the Vendor’s conveyancer/solicitor.
Before exchanging contracts it is wise to ensure that you have unconditional approval of your finance. This may involve your lending institution obtaining a valuation of the property.
Cooling-off period
When you buy a property in NSW there is usually a 5 business-day cooling-off period after you exchange contracts. If you use your cooling-off rights and withdraw from the contract during this period, you will pay the Vendor 0.25% of the purchase price.
Sydney West Conveyancing will advise you of your rights before signing the contract.
After exchange
With each transaction of property, there is stamp duty payable, on the Contract and Transfer, payable either on or before settlement or 3 months after exchange, whichever is the earliest. There are penalties for late lodgement of stamp duty. It is our responsibility to ensure that your Contract and Transfer are stamped on time.
Before settlement, the exact amount owing to the Vendor will require some adjustment to include figures such as council rates, water rates and strata levies which are adjusted from settlement date. We will calculate these adjustments and provide you with the total amount payable.
Step 3: Settlement
As the name suggests, ‘settlement’ is the final step taken in the conveyancing process to conclude the transaction when title is transferred to you and you receive the keys. Settlement is usually attended by four parties: the Vendor, Purchaser as represented by their respective licensed conveyancer/solicitor and discharging and incoming mortgagees.
You are not required to attend settlement.
Immediately after settlement the change of title and mortgage will be registered at the Land and Property Information and Valuer General, local council, water authority (and strata manager if applicable) will be notified of the ownership change.
We will notify you of the finalisation and the agent will release the keys of the property to you.
The Conveyancing Process (Selling a property)
The Contract
If you have engaged a real estate agent to sell your property then make sure you arrange for a contract for sale of land to be prepared by Sydney West Conveyancing before they start their marketing campaign. Your property can’t be listed by a real estate agent until a Contract for Sale of Land has been prepared.
Offer and Acceptance
Your real estate agent should let you know when an offer is given by a potential purchaser. If you decide to accept the offer, the agent will issue a sales advice to all parties with details of the agreed price and conditions that have been agreed upon. The contracts are then exchanged and a deposit is paid and is now legally binding.
Deposit
Usually, 10% of the purchase price is the deposit paid on exchange of contracts. However, this may be negotiated before the exchange. Most cash deposits are held in a special trust account.
Exchange
Contracts are exchanged when you and the purchaser have signed separate but identical copies of the contract and the agreed deposit is paid. Contracts are dated and your signed contract is given to the purchaser’s Licensed Conveyancer, and the purchaser’s signed contract is given to Sydney West Conveyancing.
Cooling-off Period
Every standard Contract for Sale of Land for residential property includes a 5 business day cooling-off period, starting the day contracts are exchanged. The cooling-off period exists in case the purchaser changes their mind after exchange. If the purchaser backs out, they’re required to pay you 0.25% of the purchase price.
Settlement
Settlement is the date that your property is legally transferred to the purchaser. This is also the day the purchaser takes possession of the property, and the balance of the purchase price is paid to you.