Selling or Purchasing your Property
The laws in NSW require that any residential property marketed for sale must have a draft contract (termed ‘soft copy’) prepared beforehand. This contract must be provided to your real estate agent before marketing may commence. In New South Wales, the contract needs to include up-to-date copies of the title deed, the plan, any easements and/or restrictive covenants, a zoning certificate and a sewerage diagram. We will require upfront payment of $495.00 for a house or $605.00 for a unit for these searches and certificates.
We suggest that as soon as you have made the decision to sell your property you engage a solicitor to arrange for the searches to be ordered as some certificates can take up to two (2) weeks to be received. Apart from your legal requirements to provide a soft copy, if you wait until you have a purchaser to order these certificates the issuing of the contracts to the purchaser will be substantially delayed, leaving the purchaser open to other opportunities.
Acceptance of an Offer
When you have accepted an offer on your property the agent prepares a sales advice. The Solicitors of both the Vendor and Purchaser receive a copy of the sales advice. The Vendors Solicitors are then responsible for preparing and issuing the contract to the Purchaser’s Solicitor which includes the searches previously ordered. There are two contracts available, one for the Vendor to sign and one for the Purchaser. The contract is NOT binding at this stage.
Exchange of Contracts
When both the Vendor and Purchaser have signed their contract the Solicitors will arrange to exchange contracts. The Purchaser’s signed contract is provided to the Vendor to check that the contracts are in identical terms, they will also confirm with the agent that the deposit is being held. Once they are identical the contracts will be dated. After exchange the Vendor will hold the Purchaser’s signed contract and the Purchaser will hold the Vendor signed contract. This is when the contract becomes legally binding. Time limits under the contract will begin from this date (for example the time allowed for the Purchaser to obtain finance approval). We will aim to exchange contracts on your behalf as quickly as possible.
The most common special conditions are finance approval, pest and building and if a unit an inspection of the body corporate records. The Purchasers Solicitor will confirm once their clients have satisfied their conditions. If on the due date the Purchaser is still awaitng reports or approvals from a third party they may request an extension. If the Purchsaer is not satisfied with their results or they are unable to receive finance approval they can terminate the contract and the deposit will be refunded. However if the Purchsaer terminates under the finance clause, they are responsible to pay $275.00 (this can vary) to the Vendor in payment of legal fee. Pre-Settlement
Once all conditions have been satisfied and the contract is unconditional we will contact your mortgagee and provide them with the Discharge Authority to prepare for settlement. The Purchasers solicitor will submit settlement figures for approval.
We will coordinate a settlement time with your bank and the Purchasers solicitor; most banks require settlements to take place in the afternoon. We will finalise settlement figures and provide cheque directions once we have received a payout figure from your mortgagee. Cheques that could be drawn on settlement are:-
- Rates, water or body corporate levies;
- Agents commission if they are not holding sufficient in their trust account;
- Legal Fees
Once settlement has been effected we will notify both you and the agent and authorise the agent to release the balance of deposit once they have paid their commission. We will provide you with a final settlement calculations and details of the allocation of sale monies.
Buying a Property
Pre Contractual Negotiations
When making an offer on a property you need to consider what special conditions you will require in the contract. If you are unsure contact your Solicitor to discuss. It is best to make the Vendor aware of your conditions during the negotiation stage. It is better to be upfront with the Vendor as they may not proceed with the sale if there are too many changes to the contract. The negotiation is done through the real estate agent. The agent will issue a sales advice and the Vendors solicitor will prepare the contract. On receiving the contract we will contact you to make an appointment to discuss the contract.
Exchange of Contracts
As mentioned above, the exchange of contracts is when the contracts become legally binding on both the Vendor and the Purchaser. The process is the same as if you were selling. The Purchaser provides their signed contract to the Vendors Solicitor and the Vendors Solicitor will check that the contracts are in identical terms and that the deposit has been paid. They will then date the contracts. Following exchange the Vendor will hold the purchasers signed contract and the Purchaser will hold the Vendors signed contract.
When buying a house it is important to remember to take out a cover note of insurance for replacement value of the house. In New South Wales the risk does not pass until settlement. However, you should not assume the vendor’s insurance will cover any damage before settlement.
It is important that you have received formal approval and a Letter of offer from your Lender before confirming the finance condition with the Vendor. A full disclosure of assets and liabilities to your lender is a must – failure to do so will entitle the bank to withdraw its offer of finance at any time. If the bank withdraws approval due to some misrepresentation made by you (whether innocent or not), you are still legally bound to complete the contract. If you are unable to settle without finance, the vendor would be entitled to keep the deposit, terminate the contract and sue you for any damages he or she may have suffered.
Requisitions on Title are questions about the property the purchaser is entitled to ask the vendor to find out if he or she knows anything that may be wrong with the title to the land. In New South Wales we send Requisitions on Title to the seller’s solicitor within 21 days from the date of the contract.
A number of searches need to be undertaken to ensure no government department or local authority has any claim against the land and all rates and taxes have been paid. Our usual searches include:
- Rates search through the local authority. • RMS to ensure it has no proposals for resumption of land or proposals to realign an existing road or truncate any part of the land. • Land tax search through the Office of State Revenue.
Other optional searches depending on the location and peculiarities of the property include: • Council Building Inspection. We recommend this inquiry which is carried out by the local council building inspector to confirm that the original building or any alterations or additions have been carried out in accordance with the Council’s building requirements (for example garages converted into habitable rooms/ pergolas erected) or structures added without permission. • Survey. Our search of the title and plan will provide details, which should be sufficient to confirm the land identified in the contract is the area you wish to buy. However, the plan does not show us everything we need to know. For example it does not tell us if the fences are on the true boundaries or whether any improvements of yours or the neighbors are encroaching onto the others land, and whether structures are the required distances from front and side boundaries. We recommend that a survey of the land be obtained by the purchaser. We can provide you with details for a local surveyor.
We will prepare settlement figures and submits them to the Vendor for approval. The Vendor’s solicitor will nominate the venue for settlement. This will either be at their office if there is no registered mortgage or at their mortgagee’s preferred venue. If you have a financier we will contact them to book in settlement and to obtain funds available for settlement. We will advise you if there are insufficient funds and request that these be made available. Our preferred option if a transfer into our trust account or you can arrange for the bank cheques to be drawn. If you are a cash purchaser, we will provide you with the amount required to complete settlement, including stamp duty and our fees to be transferred to our trust account.
We recommend that you arrange a pre-settlement inspection to determine whether all the inclusions you have contracted to buy have been left in good working order by the seller and the property is in a reasonable condition regarding cleanliness. The inspection cannot be used as an opportunity to find minor faults with the properties that were pre-existing.
At settlement, we hand the cheques to the Vendors solicitor (or their agent) in exchange for the Certificate of Title and any other documents that may require registration, e.g., Discharge of Mortgage or Withdrawal of Caveat. If you have a financier they will attend settlement and obtain the Certificate of Title. They will attend to registration following settlement. It is not necessary for you to attend settlement.
If there are any outstanding rates, water usage, body corporate levies or land tax payable we will arrange for these to be paid. We notify the body corporate of the change of ownership and once the Certificate of Title and Transfer are registered the local authorities such as council and Revenue NSW they are notified of the change of ownership.
We hope the above information has been of assistance in helping you understand the main steps that need to be taken when buying or selling. This is not an extensive list and circumstances vary in each case.
We understand the process of buying and selling can be complex and are available at anytime to answer any questions you may have.
With three offices conveniently located at Robina Town Centre, Coolangatta – Tweed and Kingscliff you can also visit an office near you.