Once you decide to sell your property, you will likely want to get it ‘on the market’ as soon as possible. If you have listed with an agent, they will also be motivated to start an advertising campaign.
In New South Wales residential property cannot be advertised for sale unless there is a written contract available for prospective purchasers. We can arrange a contract quickly, but it is important also that it complies with your disclosure requirements and includes specific conditions to address your circumstances and protect your interests.
Having your contract right in the first place will help avoid delays in securing the sale once a purchaser is found.
The process of selling a property
Selling property in New South Wales can generally be broken down into three stages.
- Preparing the contract / pre-exchange
The contract must contain prescribed disclosure documents which we usually order online from local council and other government bodies. Prescribed documents include a copy of the title search and deposited plan, details of any easements or other interests effecting the land, a council planning certificate and drainage diagram. Depending on the property, you may also need to include other details such as a certificate of insurance for recent building works or a compliance certificate if the property has a swimming pool.
When we meet with you, we will ask about the property and the state and repair of structures, the inclusions, and your intentions once the property is sold. If you are selling and buying at the same time, we can usually coordinate a simultaneous settlement. You may require a longer or shorter completion date and these matters can be factored into special conditions which can be added to the contract to protect your interests.
Once completed, the marketing contract is sent to your agent.
- Exchange of contracts
Once you have accepted an offer the agent will issue a sales advice to our office and the purchaser’s conveyancer. We will complete the contract with the information from the sales advice and confirm the accuracy of all details with you before sending a ‘counterpart’ contract to the purchaser’s conveyancer.
The purchaser will likely arrange inspections for pest and building reports, identification surveys, etc. and your cooperation will assist in moving towards an exchange of contracts. We will arrange for you to sign the original contract and discuss any concerns.
If you have a mortgage we will notify your lender of the sale and request that a discharge of mortgage be prepared and a payout figure advised in anticipation of settlement.
Exchange of contracts is when the transaction becomes legally binding. Duplicate contracts are signed respectively by the vendor and purchaser, checked to ensure they are identical and dated. The contracts are swapped so that each party holds the copy signed by the other party. The exchange date triggers the countdown to completion which is generally described as ‘X’ days from exchange.
Unless agreed otherwise, the purchaser must pay a deposit of 10% before or on exchange of contracts. This is typically held in the agent’s trust account, pending settlement. Sometimes, a purchaser may request that you accept a lesser deposit or a deposit bond. We will discuss these options with you if they arise.
Contracts for residential property have a statutory cooling-off period which provides a right for the purchaser to rescind (cancel) the contract within five business days from the date of exchange. This right does not apply to you as a vendor. If a purchaser ‘cools off’ they must pay you a penalty of 0.25% of the purchase price. It is common practice for the cooling-off period to be waived. We will generally request that the vendor’s conveyancer sign a section 66W certificate which will waive the purchaser’s cooling-off rights, so the contract is immediately binding.
Cooling-off rights do not apply to auction sales.
The purchaser’s conveyancer will draft a settlement statement which adjusts council rates, water/sewer access rates, water usage, strata levies and anything relevant to the property. The settlement statement provides a summary of the balance required for completion taking into account any deposit held by the agent. We will check and approve the statement and provide directions to the purchaser’s conveyancer which will include amounts to discharge any mortgage over the property. During this time, we will liaise with your lender to confirm a payout figure for your loan.
Purchasers are entitled to a final inspection of the property prior to settlement. The agent will contact you to arrange this. The property must be left in the same condition as when contracts were exchanged. Unless other arrangements are in place, the property must be vacant for the purchaser’s possession on the day of completion.
Settlements are now facilitated online through a national electronic platform known as PEXA. E-conveyancing enables parties to settle a matter without having to physically meet and exchange bank cheques, title deeds and other legal documents, as was previously required to complete a conveyancing transaction.
Online settlements remove the location and time barriers of physical settlements, visually track the progress of each stage of the transaction and facilitate online lodgement of documents with land registries and authorities, and faster access to sales funds.
Immediately after settlement the real estate agent is notified and an ‘order’ provided authorising the agent to release any deposit held to you, and the keys to the purchaser.
The role of the conveyancer
The role of a conveyancer is to manage the administrative and legal requirements for a property transaction. Conveyancers must ensure that clear title is passed from the seller to the buyer, while carrying out due diligence and protecting their clients’ legal interests. From a seller’s perspective, a compliant contract must be in place to ensure that the transaction can proceed smoothly once a purchaser is found.
Selling rural property – contract preparation
Selling a rural property requires some additional considerations. Some rural properties comprise multiple parcels of land which must be correctly identified and shown in the contract.
During the sales process, government bodies will play a role in answering purchaser enquiries about rates, animal and stock disease, pest control and chemical residue issues. A rural transaction may also incorporate the sale of a farming enterprise which must consider incidental matters such as crops, stock, plant and machinery.
Water rights forming part of the sale but held separately to the title of the land must be transferred through the relevant Government authority. Water access rights must be clearly defined, and appropriate processes included for their transfer on completion.
Whether you are buying, selling, or investing in property, a conveyancing transaction should be professionally managed to minimise complications and risk. While buying or selling a property can be exciting, we are also aware that the fact you find yourself in the property market can come about through a range of major personal and financial changes in life. We aim to take as much pressure off you as possible during this time by keeping you informed, answering your questions and guiding you through the process.