BUYING & SELLING PROPERTY in NSW
Residential Conveyancing Overview
NSW Law requires a Vendor (seller) to have a complete Contract of Sale available for a purchaser (buyer) to inspect, when a property is offered for Sale. The contract is prepared by a Solicitor or Conveyancer.
When price and conditions are agreed to between a vendor and a purchaser the sale transactions can proceed in one of two ways.
1. Under Cooling Off Period.
Often done by the Real Estate agent where the buyer often pays a 1/4 of 1% of the Sale Price (0.25%) as deposit and has five business days in which to do any reports such as pest and building, have the contract explained and finance approved. As the contracts are exchanged the seller cannot “gazump” the buyer by accepting another offer.
If the purchaser decides not to proceed they must rescind the contract in writing before 5pm on the fifth business day and they forfeit to the seller the 0.25% of Sale Price deposit.
If the purchaser proceeds, they pay the remainder of the 10% deposit to the agent by 5pm on the fifth business day.
The cooling off period can be altered by mutual agreement.
The term ”exchange of contracts” means that two identical copies of the contract – one signed by the seller and one signed by the buyer – are physically exchanged with the seller’s solicitor/ conveyancer receiving a contract signed by the buyer and the buyer’s solicitor/ conveyancer receiving an identical copy of the contract signed by the seller.
There is no cooling off period if property is sold at public auction or contracts are exchanged with a 66W certificate.
2. Exchanging under 66W Certificate
If a buyer is not prepared to exchange contracts before being fully satisfied with all aspects of the purchase they proceed in the following manner.
After price and terms are agreed to, the agent issues a Sales Advice to both the seller and buyer’s solicitor. The seller’s solicitor issues a Contract for Sale to the purchaser’s solicitor who organises reports, explains the contract and confirms financing. The property stays on the market for Sale until the contracts are exchanged unconditionally ie. with a 66W Certificate attached by the purchaser’s solicitor to their signed contract and the full 10% deposit is paid over.
The settlement period should have been negotiated and is set down in the contract. Usually 6 weeks from the date of exchange of contract is considered an acceptable time.
On settlement day the balance of the purchase price is handed over to the Vendor’s Solicitor and documents exchange to allow transfer of title to the purchasers.