Steps to selling your property:
- Engage a lawyer to prepare your Contract of Sale;
- Engage a real estate agent to put your property on the market;
- Negotiating and accepting an offer on your property;
- Exchange of contracts; and
Contract of Sale
Before real estate agent can market the property, you as the seller (vendor) will need to acquire a contract of sale. A contract for sales a legal document that is required for buying in selling a house in Australia. It is different between States and territories across Australia. In order to acquire a contract for of sale you will need a licenced conveyancer or lawyer. Orr Legal is highly qualified and ready help you acquire a contract of sale.
Putting your property on the market
Once your contact is prepared, your designated real estate agent can put your property on the market. Putting your house on the market often requires a real estate agent. We can highly suggest real estate agents in the Newcastle area. You want to be sure you find someone that you can work with as this individual will be working for you.
Exchange of Contracts
Once a purchaser is found and a price is agreed to, the agent will send as a sales advice to your representative and the purchaser’s representative. When the vendor and purchaser have agreed upon a price each will sign a contract of sale. The contract signed by the vendor it will be sent to the purchasers lawyer. The contract signed by the purchaser it is then sent to the vendors lawyer. This is commonly referred to as “Exchange”.
The Sales Advice includes:
- the sale price;
- the full name and address of the purchaser;
- the name and address of the purchaser’s representative;
- any terms agreed to by the parties.
Once both parties are satisfied with the terms and have completed all their searches the parties sign the contract. Contracts can be exchanged with a cooling off period or without a cooling off period. It is important to understand that the sale becomes legally binding when the contracts are exchanged.
Cooling off Period
Upon exchange of the contract the property enters into a cooling off. Also, the the purchaser will submit a 0.25% deposit of the purchase price. That money will be deposited into the deposit holder, often the vendors real estate agent’s trust account. This amount will be held as part of the deposit until settlement. Unless a purchaser waives the cooling off period, the purchaser has “Cooling Off” rights which allows them to withdraw from the contact at any time before 5pm on the fifth business day after the day of exchange of contract (or longer by negotiation between the parties). If they do, the purchaser forfeits to you 0.25% of the purchase price.
Before agreeing to proceed on this basis, you should be completely satisfied with the sale price because although the purchaser can withdraw, you the seller are bound to proceed with the sale if they do not exercise their “Cooling Off” rights.
On expiry of the cooling off period, the purchaser will then pay (if they haven’t already) the remainder of the 10% deposit (less the 0.25% holding deposit) to the deposit holder. Longer cooling off periods are becoming more common. The most common cooling off period now is 10 business days.
After exchange, the parties to the contract prepares for settlement. The parties involved in a property transaction generally include:
- The vendor and the vendor’s legal representative;
- The purchaser and the purchaser’s representative;
- The outgoing bank and their representative;
- The incoming bank and their representative;
- The mortgage broker (if there is one); and
- The real estate agent.
Each party has a role to play in preparing for settlement.
From the date when the contract is signed it is normally a 12 week settlement. Unless negotiated differently prior to contract signing. Lawyers from either side can also negotiate during this time period and move the date of settlement as long as both parties agree. The settlement of the contract happen is when the transaction is finalised. Ownership of the property is transferred to the purchaser and the entire purchase price of the property will be transferred to the vendor.