SELLING REAL ESTATE

Conveyancing is much more than paper shuffling. It consists of a number of stages:

Contract preparation
Exchange
Settlement
Other matters

Preparation of the contract for sale
Your real estate agent is required by law to have a contract for sale in his possession prior to marketing your property for sale. The contract must have attached to it a number of certificates. These include:

• a section 149 certificate from the local council. This certificate details the zoning of the property, and other information.
• a sewerage diagram from Sydney Water (or, from Council in some cases). This shows the location of the sewer main and the connections from the sewer main to the dwelling.
• a title search from the Land and Property Information Office. This search contains a copy of the certificate of title and other documents outlining any easements, restrictions on use, or covenants affecting the property.

In the contract for sale, the vendor disclosure regulations require a vendor to disclose certain matters and give certain warranties (promises).

For example, a vendor is required to warrant that the property is not adversely affected by a proposal for the re-alignment, widening or alteration of the level of a road. If a purchaser learns before settlement that a vendor has breached any of these warranties, a buyer may be entitled to rescind (cancel) the contract.

Exchange of contracts
Contracts are prepared in duplicate. The vendor signs one copy and the purchaser signs the other. When contracts are “swapped” or exchanged, the contract becomes binding upon both parties. A 10 per cent deposit is usually paid at the time of exchange of contracts (less any holding deposit paid to the agent).

In some cases, there will be provision for a five-day cooling off period. If the cooling off period applies, a buyer can change his mind within five business days from the date of exchange of contracts and cancel the contract. However, a buyer will then forfeit 0.25 per cent of the purchase price to the vendor, eg on a $200,000 property a buyer will forfeit $500.

Settlement
Is simply the completion of the transaction. It usually takes between 4-6 weeks between exchange and settlement. The remainder of the sale price is paid at that time. From the amount received on settlement, any mortgage over the property must be discharged. An adjustment will be made on settlement for any council and water rates that have been paid in advance by the vendor.

Other matters
Additional legal implications can arise from selling a property. For example, it is often a good time to review any existing will and make changes that might be appropriate. Capital gains tax, if applicable, will need to be considered.

The above summary is not meant to be exhaustive but is designed to outline some of the basic steps involved in selling a property.

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If you are thinking of buying real estate please do not hesitate to contact us for a competitive quote. Kerrisons The Law Firm would be happy to help you with your purchase: Phone 02 4655 7066 or email us today.