Private Real Estate


Buying Residential in New South Wales
Selling Residential \| Selling Business \| Buying Residential \| Buying Business \| Leasing Commercial or Residential Property
1.	Make an Appointment with the Seller
	Once you have found the property that you are interested in purchasing, your first step would be to contact the Seller of the property for sale, to make an appointment.
	The Seller's Job: At this stage, the Seller's job is to provide you with access to the property so that you may inspect it. This inspection is very important and you need to be aware of what you are looking to buy well before you inspect the property. Once the property is inspected and you are interested in purchasing it, you will need to negotiate the purchase price with the Seller.
	The Purchase Price: Once a purchase price has been agreed to by both parties, other conditions may be discussed such as completion dates and how much is paid for the deposit.
	At Law: The Seller, by law, may not begin to advertise or market the property until the contract is ready for review by a prospective buyer. You need to ensure that you peruse a copy of the contract before you begin any negotiations with the Seller.
2.	Instruct your Solicitor
	Contact your solicitor and advise them of your intention to buy. You will be asked to provide a copy of the Contract for the Sale of Land for the property. You can obtain a Contract for the Sale of Land for the property from the Seller. Your solicitor will then order all the appropriate property inspections that you may request and attend to the exchange and cooling-off process.
3.	Exchange of Contracts
	An “exchange” occurs when the deposit (normally 10% of the purchase price) is paid into your solicitor's trust account and the contracts are signed and dated.
	The Deposit: In most cases, the deposit is held on trust until settlement, which means that the seller may not have access to the deposit funds until settlement. But this also depends on the initial negotiations. The date of the contract becomes the date of exchange. The exchange should be completed by your solicitor. When completed by your solicitor, you will deliver the deposit sum to your solicitor and once same is confirmed and both contracts have been signed, your solicitor will then date the contracts and effectively “exchange” them.
	The Completion Date: A “completion date” is also set, which is the date when the property will settle, or be finalised. A completion date is normally 6 weeks after the date of exchange, however this may be negotiated by your solicitor and is dependent on your circumstances at the time.
4.	Cooling-Off Period
	A cooling-off period is a 5 business day period after the date of exchange whereby you may withdraw from the contract and forfeit nothing more than the 0.25% of the purchase price. This period applies to every Contract for the Sale of Land. The time provided for by a cooling-off period is used to order and/or review any Building and/or Pest Reports of the property, or to obtain final loan approval from your lender.
	Inspection Reports: If you are purchasing a house, villa or townhouse it is advisable that you order Pest and Building Reports. A Pest Report involves a thorough Pest Inspection of the property. It provides you with a detailed overview of whether the property is at the risk of being or is infected by pests, and more specifically termites. A Building Report involves a thorough inspection of the building itself and its foundations. It details everything from minor defects such as painting that is required to major defects such as foundational problems. If you are purchasing a strata property (unit or apartment) the Pest and Building Reports are not required as every strata building has a “Strata Agent” who manages the property. In this instant you will need to order a Strata Inspection Report. This report involves a thorough inspection of the strata company. It provides information on the financial viability of the strata company and whether all requirements by law are being met. It also gives a breakdown of rates payable and whether all insurances are current. In most cases, if you are having difficulty with getting the reports completed on time, your solicitor will be able to negotiate an extension of the cooling-off period. Once you have received these reports and you are happy to proceed with the purchase you may move to exchange.
	Loan Approval: Loan approval is the other important consideration whilst you are still in the cooling-off period. If you are borrowing money to fund the purchase of your new property, your lender will normally issue you with an "initial approval" of the funds. However, you should ensure that you receive an "unconditional approval" in writing from your bank before you allow the cooling-off period to lapse. In most cases, if you are having difficulty with obtaining your unconditional approval from your lender your solicitor will be able to negotiate an extension of the cooling-off period.
	If your Solicitor Exchanges the Contracts: If your solicitor attends to the exchange process, all negotiations for the terms of the contract will be done between your solicitor and the seller's solicitor. This process will also involve the negotiation of such issues as to what parts of the property are included or excluded in the contract and any other special conditions that may apply to your situation or that of the seller's. You will sign the contract with your solicitor and they will attend to the exchange. In that situation, if both parties are in agreement, the seller's solicitor may request that a "Section 66W Solicitor's Certificate" be signed by your solicitor to forfeit the cooling-off period and essentially make the contract immediately binding.
	The Extension and End of the Cooling-off Period: A cooling-off period can be extended by the consent of seller's solicitor after receiving explicit instructions from your solicitor. Once the cooling-off period ends, or if forfeited by a Solicitor's Certificate, the contract becomes immediately binding on both yourself and the buyer, and must be completed or heavy legal consequences will apply.
5.	Mid-Transaction
	This part of the process is handled entirely by your solicitor as there are legal issues that need to be attended to.
	The Mortgage Documents: If you are borrowing funds from a lender to fund your purchase, you will receive mortgage documents from your lender. These documents will include your:
	(a)	Loan Offer which outlines the offer of funds made to you;
	(b)	Mortgage Document which will be registered on title once the property is "settled";
	(c)	Loan Terms and Conditions of the loan;
	(d)	Certificate of Independent Advice which confirms to the lender that you have received advice from your solicitor on the mortgage documents; and
	(e)	Other supplementary forms such as Direct Debit Requests, Acknowledgments and Directions to Pay which will be explained thoroughly by your solicitor.
	These documents are either wholly or partly forwarded to you and/or your solicitor. Once received, you need to make an appointment to see your solicitor so that they may review your documents to ensure that your rights are protected and to explain the contents of the documents to you. Once you have a good understanding of your loan, your solicitor will then witness your signature on the appropriate documents and will then send the documents to your lender. All correspondences with your lender will be made by your solicitor from hereon.
	The Property Searches: After exchange, your solicitor will begin ordering property enquiries. These searches reveal such things as whether council, water and strata rates are paid up to date and other issues such as Land Tax are all in order. Your solicitor will advise you of the requisite searches. A request for “Replies to Requisitions” will also be forwarded to the seller's solicitor by your solicitor on your behalf. This is basically a request to answer certain questions about the property and the seller must reply and disclose to you all the information that they know, concerning the property. This right for information is heavily protected by law.
	The Transfer: Your solicitor will also draft the Transfer document, which transfers the title of the property from the seller's name to your name at settlement. If you are liable to pay stamp duty on the purchase, your solicitor will have the contract and transfer stamped accordingly. The transfer is then forwarded to the seller's solicitor to be signed by the seller and be held by the seller's solicitor until settlement.
	Stamp Duty: In New South Wales, Stamp Duty is payable to the Office of State Revenue on every transfer of property. You may be eligible for an exemption for stamp duty if you are a First Home Buyer. Your solicitor will advise you of your eligibility and the procedures. Stamp Duty, if payable can either be paid after exchange or at settlement. By law, you have only three months after the date of settlement to pay any stamp duty that is due and payable by you, after which penalties will apply.
6.	Leading up to Settlement
	Your solicitor will attend to most of the requirements of the seller's solicitor and will discuss with you the date and time set down for settlement.
	Vacant Land: In most cases, property is transferred as “vacant land” which means that there are no occupiers ie tenants, living in the property at the time of settlement and that the property is free from any and all belongings of the seller which do not form part of the land. In this situation, you must ensure that the seller has moved out of the property, and removed all their belongings prior to the time and date of settlement. You may purchase a property, which is “subject to a tenancy”. This means that you are buying the property and taking over an existing lease on the property, under which there are tenants residing in the property.
	The Final Inspection: A few days prior to settlement, and sometimes even on the day of settlement, you need to arrange with the seller for a suitable time to undertake a “final inspection”. This inspection of the property allows you to ensure that the property:
	(a)	is in the same condition as it was when you first agreed to purchase it;
	(b)	that all special conditions of the contract have been complied with by the seller; and
	(c)	that the property is in fact "vacant", or in the case of tenancy, the tenants are still occupying the property.
	If the condition of the property has changed in any way, for example, if there is rubbish in the front yard or if there has been damage to the property or someone is still living in it, then you may ask your solicitor to delay settlemVacant Land: In most cases, property is transferred as “vacant land” which means that there are no occupiers ie tenants, living in the property at the time of settlement and that the property is free from any and all belongings of the seller which do not form part of the land. In this situation, you must ensure that the seller has moved out of the property, and removed all their belongings prior to the time and date of settlement. You may purchase a property, which is “subject to a tenancy”. This means that you are buying the property and taking over an existing lease on the property, under which there are tenants residing in the property. ent. In that situation, your solicitor will request for the property to be restored to its original and vacant or tenanted condition before you agree to settle.
	If settlement is delayed by you for any reason other than by any fault of the seller, there may be costly consequences that you may experience including time and money, which are subject to the unique conditions of every contract. Normally the penalty is in the form of interest payable to the vendor for every day that you delay settlement.
7.	Settlement
	While organising settlement your solicitor will be liaising with your lender (if applicable) to get a final “sums available” of your loan. This sum is the exact amount that the bank will have available to you on settlement. Once the final sum is received, your solicitor will do the appropriate calculations and will advise you what further amounts you will need to draw (if any) by way of cheques.
	Calculation of Settlement Sum: The settlement sum is calculated by taking into consideration all necessary council, water and/or strata rates, insurances and other payables, and adjusting them to the date of settlement so that each party only pays for services for the time that they occupy the property. In most cases you will be paying the following amounts on top of the purchase price, minus the deposit that you have already paid:
	(a)	Council rates adjusted as at the day of settlement;
	(b)	Water rates adjusted as at the day of settlement; and
	(c)	Strata rates (if applicable) adjusted as at the day of settlement.
	Settlement: You will not need to attend settlement as it occurs between the solicitors at a designated place and time. At settlement, your cheques are exchanged for the transfer document, the Certificate of Title, and any other documents that needs to be registered at the Department of Lands in order to effect the transfer of the property. Once the matter is "settled", your solicitor will advise you of same. The transfer and other documents will be lodged for registration either by your solicitor in the case where you are not borrowing money from a lender, or by the lender if you are borrowing money. This is the essential step to transfer the property into your name. Once you have been advised by your solicitor that settlement has occurred you are then at liberty to get the keys for the property from the seller or solicitor and may enter into possession of the property immediately.
8.	Post-Settlement
	After settlement has been effected, your solicitor will provide you with an explanatory letter of all the issues involved at settlement and a breakdown of how the funds were disbursed. You should also be provided with all necessary paperwork for future accounting purposes.



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