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If you have engaged a real estate agent to sell your property then make sure you arrange for a contract for sale of land to be prepared by Sydney Property Conveyancing before they start their marketing campaign. Your property can’t be advertised by a real estate agent until a Contract for Sale of Land has been prepared. In order to prepare your contract, we need to obtain all the “prescribed documents” such as a council zoning certificate, a copy of the title and other title documents, strata plans and sewer diagram. The contract can usually be prepared in around 5 business days.
Offer and acceptance
Your real estate agent should let you know when an offer is given by a prospective purchaser. Once you’ve accepted an offer, the agent will issue a sales advice to all parties with details of the agreed price and possibly some special conditions that have been agreed. The contract is binding when contracts are exchanged and a deposit is paid and is then legally binding.
Typically, 10% of the purchase price is the deposit paid on exchange of contracts. However, this may be negotiated before exchange to accept a 5% deposit, bank guarantee or deposit bond. Most cash deposits are held in an interest bearing account arranged by the agent with the interest being split 50/50 between the purchaser and vendor after settlement. If there is no agent involved on the sale then the deposit may be held in Sydney Property Conveyancing’s trust account.
Contracts are exchanged when you and the purchaser have signed separate but identical copies of the contract and the agreed deposit is paid. Contracts are dated and your signed contract is given to the purchaser’s Licensed Conveyancer/Solicitor, and the purchaser’s signed contract is given to Sydney Property Conveyancing (hence the term “exchange”).
Every standard Contract for Sale of Land for residential property includes a 5 business day cooling-off period, starting the day contracts are exchanged. The cooling-off period exists in case the purchaser changes their mind after exchange. You, as the vendor, don’t have this right. If the purchaser backs out, they’re required to pay you 0.25% of the purchase price. Cooling-off periods don’t apply at auctions. Cooling off periods can be extended if agreed by both parties in writing before the expiry of the cooling off period.
Waiving the cooling-off period
The cooling-off period can be waived as part of the negotiation process. A Section 66W certificate provided by the purchaser’s Licensed Conveyancer/Solicitor, will waive the cooling off period on exchange of contracts.
Settlement, otherwise known as completion, is the date that your property is legally transferred to the purchaser. This is also the day the purchaser takes possession of the property, and the balance of the purchase price is paid to you.
Sydney Property Conveyancing have assisted me on a number of residential transactions. They are always professional, efficient and most helpful. Rest assured I will continue to be an advocate of theirs.
— David J. Gaynes
Operational Risk Manager
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