A real estate agent cannot market your property until they have a Contract for Sale of Land. Having a contract prepared by someone experienced in property law and conveyancing is essential to ensure a smooth transaction, free from any nasty surprises when you are selling property. Whether you are selling a block of land, your principal place of residence or an investment property, we are able to assist with all your property law and conveyancing needs. Below is a brief summary of what you may expect to take place when selling a residential property.
Before you Start Selling Property
The first step many people take when deciding to sell their property is to appoint a real estate agent and to decide whether to sell the property by private treaty or by auction.
After obtaining your detailed instructions and providing you with our advices in respect to your obligations under a Contract for Sale of Land, we will prepare the contract and forward it to your real estate agent.
Not only will the contract include all the legal terms and conditions of sale together with the prescribed documents and any disclosures, it will also specify what items are included or excluded from the sale, and any other special requirements you might have like a longer or shorter settlement than usual, or perhaps that the contract be conditional upon another contract for you to buy your next property. There are a lot of ways that a contract can be varied, so it’s important to discuss your situation in detail with us.
Acceptance of the Offer
After negotiations have taken place and you have accepted an offer on your property, your real estate agent may request the buyer to exchange contracts under a cooling off period or, your real estate agent may issue a sales advice to our office and upon receipt of that sales advice, we will issue a contract to the buyer’s solicitor/conveyancer.
Exchange of Contacts and the Cooling Off Period
Exchange is the swapping of a contract signed by you for one signed by the buyer. The contract is usually exchanged either by your real estate agent under a cooling off period or by our office unconditionally (i.e. without the benefit of a cooling off period).
If you are selling a property with an area of less than 2.5 hectares, the buyer will have the benefit of a 5 business day cooling off period. During this period, the buyer will obtain pre-purchase inspection reports and seek formal loan approval. If the buyer is not satisfied with their pre-purchase inspection reports or, they are unable to secure finance or, simply have a change of heart, the buyer can rescind the contract during the cooling off period. Should the buyer rescind the contract during the cooling off period, the buyer will forfeit the 0.25% deposit to you. Please note that you do not have the benefit of a cooling off period. Once the contract is exchanged, you are bound to complete the sale, unless the buyer exercises their cooling off rights.
Where a contract is exchanged unconditionally, the buyer will normally have already undertaken their pre-purchase inspection reports and have their formal loan approval in place prior to exchange of contracts.
Cooling off periods may be extended by agreement: for example, if the buyer has not been able to obtain their formal loan approval in time. The cooling off period may also be shortened or waived by the buyer’s solicitor/conveyancer providing our office with a Section 66W Certificate. A buyer will not have the benefit of a cooling off period if they enter a contract with you to purchase property that has an area of 2.5 hectares or more or, they purchase your property at an auction or, they exchange a contract on the same day your property is passed in at auction.
Pre-purchase Inspections & Reports
The buyer will usually wish to undertake pest and building reports to satisfy themselves as to the condition and state of repair of the structures on the property. The buyer may also wish to satisfy themselves as to the legality of the structures by having an inspection for a survey report undertaken and having a building certificate issued by Council. If you are selling a property that is part of a strata or community scheme, the buyer will usually obtain a strata or community inspection report.
Paying the Deposit
Once the buyer is happy to proceed with the purchase, they will attend to the payment of the deposit. Where a contract is exchanged under a cooling off period, a 0.25% deposit would have been paid at the time of exchange with the balance of the 10% deposit payable by the end of the cooling off period. Where the contract is exchanged unconditionally (i.e. a contract that does not have the benefit of a cooling of period), a 10% deposit will be required at the time of exchange. The deposit is normally held in the trust account of your real estate agent.
If the buyer is unable to pay a full 10% deposit, they may seek your agreement to pay a 5% deposit at exchange and the balance being paid on completion. If the buyer is not in a position to pay any deposit or, if you do not agree to accepting a deposit of less than 10%, the buyer can obtain a Deposit Bond (if acceptable to you). In general terms, a Deposit Bond is a guarantee for the amount of the bond that you can call upon should the buyer default.
Between Exchange and Settlement
After the contract has become binding, there are a number of tasks that we perform on your behalf, which may include but are not limited to the following:
- Preparation and submission of a discharge authority to your mortgagee
- If the property is part of a strata or community scheme, obtaining and serving the relevant certificates
- Reviewing the Transfer document and attending to execution with you
- Reviewing and replying to requisitions on title
- Liaising with the lender in regard to the discharge of mortgage
- Checking to see if there are any outstanding debts to local council and water authority
- Calculating adjustments for council, water and strata rates
- Arranging settlement with all parties concerned
- Directing the disbursement to settlement funds
- Attending on settlement
- Reporting after settlement to you and your real estate agent
The buyer is entitled to carry out one final inspection of the property within 3 days prior to settlement. The purpose of the final inspection is for the buyer to ensure that all inclusions specified in the contract remain, that no fixtures have been removed and, that the property is in the same condition that it was on the date contracts were exchanged, fair wear and tear excepted.
On settlement day, which is usually 6 weeks from the date of exchange of the contract, our office or an agent appointed by our office will attend a meeting that will include the buyer’s solicitor/conveyancer as well as any lenders involved and the title to the property will be handed over in exchange for the settlement funds due to you. The settlement funds will be disbursed in accordance with your instructions and the real estate agent will be directed to release the deposit monies as your direct.
Our firm prides itself on the level of service we provide. Please do not hesitate to contact us to discuss your property law and conveyancing needs.