By Law a residential property cannot be put on the market until a Sale Contract has been drawn up and a copy of the complete Contract for Sale available to your Real Estate Agent before they can commence to market your property.
The Contract must contain certain documents such as a complete Title Search that includes the Plan showing the location of the land being sold, any document that shows any restrictions on the use of the land such as Rights of Way and Building Covenants, Zoning Certificate from the Local Council and a Drainage Diagram.
At King Cain we order all necessary documents and searches the same day we receive either your instructions or the Listing Advice from your Real Estate Agent to ensure that your Agent can commence marketing the property as soon as possible.
We have found it is also of great assistance to include in the Contract any previous Surveys or Building Certificates that had been obtained when you purchased the property. This ensures that every possible action is taken to achieve an exchange of Contracts as quickly as is possible when a Purchaser has been found to commit the Purchaser to the deal. A Listing Contract is usually able to be forwarded to your Agent within two (2) business days of receipt of your instructions as it takes at least two days to obtain the relevant Certificates from the Local Council. In order to expedite that process we draw the necessary cheques for the Council Certificates immediately upon receipt of yours or the Agents instructions and have a member of our staff physically attend upon Council to pay the monies and then take the application from the Cashier to the Town Planning Department. This ensures that the time we wait to receive the Zoning Certificate is reduced from approximately five days to two. Unlike many of our competitors, including Conveyancers, we do not charge you a fee for the preparation of the Contract but send you an account for the money we expended to obtain the necessary certificates for the draft Contract. The balance of our fees are charged only on completion of the sale.
When your property sells
When your agent has found a Purchaser for the property, the Agent will forward to us a Sales Advice that will provide such details as the price, the Purchasers name and their Solicitor, any Special Conditions such as completion date and possibly variations of the inclusions that you may have agreed with them.
Immediately upon receiving the Sales Advice we will then draw up the final Contract showing these details and forward the counterpart Contract to the Purchaser’s Solicitor. We will forward the counterpart Contract the same day as the Sales Advice is received.
We then arrange for you to sign the original copy of the Contract so that all is in readiness to exchange as quickly as possible.
Prior to exchange, the Purchaser will be making some enquiries about your property such as obtaining a Pest and Building Inspection Report or a Survey, and will also usually be finalising their finance approval.
If there is already a Survey and/or Building Certificate available we ensure this is provided to the Purchaser’s Solicitor to expedite this process.
Exchanging the Sale Contracts is the legal part of buying a home. Before exchange the agreement between you and the Purchaser is just verbal and not binding. Up until you exchange Contracts, either you or the Purchaser have the right to change your minds.
Once the Purchaser has completed all their preliminary enquiries, that is, usually the obtaining a Survey, Pest and Building Report, and the terms of the Contract have been finalised, the Contracts are exchanged and at that time the Purchaser pays the deposit, usually ten percent (10%) of the purchase price, though this can sometimes be reduced or the deposit can be secured by way of a Deposit Guarantee Bond.
The Purchaser’s Solicitor retains the Contract signed by you and you retain the Contract signed by the Purchaser.
Once Contracts have been exchanged, and the agreed deposit paid, only then are you bound to the Contract.
Not even at this stage is the Purchaser bound to complete as they also have the benefit of a Cooling Off Period.
What is the Cooling Off Period?
A Purchaser of residential property in New South Wales has a five (5) business day Cooling Off Period after exchange of the Contract. During this period, the Purchaser has the option to get out of the Contract as long as they give to you written notice of their intention to do so. The Cooling Off Period starts as soon as the Contracts have been exchanged and ends at 5.00p.m. on the fifth business day.
If a Purchaser exercises their rights under the Cooling Off Period and withdraws from the Contract, they will have to pay to you 0.25% of the purchase price which is $250.00 for every $100,000.00.
You can ask the Purchaser to waive the Cooling Off Period and they can only do so by giving you, through their Solicitor, a Certificate under Section 66W of the Conveyancing Act 1919. The Certificate needs to be signed by the Purchaser’s Solicitor.
A Cooling Off Period does not apply if the Purchaser has bought your property at Auction or exchanged Contracts on the same day as the Auction after it was passed in.
The deposit is usually held by the Agent pending completion of the sale and typically the Agent’s Commission is paid from that deposit, with the Agent then accounting to you directly for the balance following settlement.
From exchange to settlement
Once an exchange of Contracts has occurred, we undertake all those tasks necessary to prepare the matter for completion. This involves:
Writing to your Bank and advising them that the property has been sold and requesting that they prepare a discharge of any Mortgage they have over the property. We liaise with the Bank as to the final amount to be paid on settlement.
- The Purchaser’s Solicitor will forward to us a series of questions about the property and matters relating to it known as “Requisitions on Title”. Upon their receipt we will go through these with you with our suggested answers and then provide those responses to the Purchaser’s Solicitor.
- Upon receipt of the stamped Transfer from the Purchaser we will arrange for it to be signed by you.
- In the event that there is no mortgage on the property, we will need to obtain from you the original Title Deed.
- Towards the end of the process the Purchaser’s Solicitor will calculate the amount to be paid by the Purchaser on settlement. This calculation will include an adjustment of Council rates and water usage either to you, if you have already paid them, or if they remain unpaid, an allowance is then made to the Purchaser for your share of those rates/water. These figures are then checked by us and we then provide to the Purchaser’s Solicitors a list of cheques that are required on settlement, totalling the amount payable by the Purchaser. These cheques often include a cheque in favour of your Bank and how you may otherwise wish those monies to be paid.
- Settlement is then arranged by us at a time and date both in accordance with the completion date in the Contract and when your Bank and the other parties can attend. On the day of settlement we attend on your behalf ensuring that all relevant documentation is handed to the Purchaser and Bank cheques are received on your behalf in accordance with your instructions.
- Our fees are paid by you on settlement, often from the proceeds of sale. We provide you with our Account for your approval prior to settlement occurring.
- On the date of settlement, the Purchaser will usually require a final inspection of the property to ensure that everything is in order.
- You do not need to attend settlement as we,as your Solicitor attend on your behalf, however we are happy for you to accompany us to settlement, should you wish.
- After settlement the Purchaser or their Bank will arrange for the registration of the Transfer in their favour with the Land and Property Information (formerly Land Titles Office). The Land and Property Information will then notify the Local Council that the property has been sold, though this often does not happen until some weeks after settlement. Sometimes you may receive a Rate Notice from the Local Council following settlement if it has issued by the Council prior to them being notified that the property has been sold. In that event, you should just forward the Rate Notice to either the Purchaser or us and we will make the necessary arrangements to have it forwarded to the Purchaser on your behalf.