Selling your home can be quite a daunting experience. Not understanding your legal obligations could have an enormous impact on your finances and lifestyle.
A solicitor has the expertise and education that will help you make sure your sale goes the way you intend.
Before you sell
- Contract for Sale
A Contract for Sale will need to be prepared if you are selling your house or apartment.
- What must be included in a Contract for Sale?
- Certificate of Title which confirms that you are the owner of the property.
- A copy of the plan of the land.
- A copy of any documents creating easements, rights of way, restrictions or covenants.
- Section 149 Certificate. This is a certificate that is issued by your local Council and shows planning controls together with other things which may affect the property.
- Drainage Diagram which shows the location of sewer lines.
If you are selling a Strata Title property, you will also need to include:
- A copy of the property certificate for the lot and common property.
- A copy of the strata plan.
- Any change of bylaws affecting the use of common property.
If your property includes a swimming pool:
From 29 April 2016 when a property with a swimming pool or spa is being sold, a valid swimming pool certificate of compliance or a certificate of non-compliance (or an occupation certificate issued within the last 3 years) and a valid Certificate of Registration must be attached to the Contract for Sale. Failure to attach the certificate means that the purchaser may be entitled to rescind the Contract at any time within 14 days of exchange unless settlement has already occurred.
- Auction –v- Private Treaty
A standard residential transaction is known as a private treaty. This is when you set the price you would like your house to sell for, and your real estate agent negotiates individually with prospective purchasers to achieve a sale as close to this price as possible.
An auction is when prospective purchasers gather to bid on your property. The highest bidder at the end of the auction becomes the successful purchaser, provided the bid matches or exceeds your reserve price.
- “Cooling Off Period” – How does it work?
A cooling off period is a set number of days after you make a purchase in which you can say, “I don’t want to proceed and cancel my transaction”. There is no cooling off period for properties purchased at auction.
You can elect to waive your right to a cooling off period and that is by having your solicitor sign a 66W Certificate. In New South Wales, you have five (5) business days to back out of the contract you have already signed, that’s if you do not elect to waive your right to a cooling off period. If you do proceed to back out of the contract, you will have to pay the vendor a termination fee of 0.25% of the purchase price.
- What is exchange?
The vendor signs one contract with their solicitor and the purchaser signs one contract with their solicitor. The solicitors then “swap” (exchange) contracts so that the purchaser has the copy of the contract signed by the vendor and the vendor has the contract signed by the purchaser.
At the time of exchange, contracts are dated and the deposit is payable. All time limits under the contract begin to run from this date. Neither the vendor nor the purchaser is legally committed until exchange of contracts has been completed.
- Preparing your Bank for Settlement
Your solicitor will contact your bank and provide it with a signed discharge authority by you. Once the bank is in receipt of this signed discharge authority, it should shortly after be in a position to settle.
Once exchange of contracts has taken place, your solicitor will notify your bank of the sale and arrange for preparation of release of the security documentation. The solicitor will prepare and finalise settlement figures and cheque details and arrange a settlement time and venue.
- Do you need to be present at settlement?
You don’t usually need to attend settlement in person. Instead, your solicitor and the purchaser’s solicitor will meet to make sure they have everything they need for the sale to go ahead. If you have a mortgage over the property you are selling, a representative of your bank/building society will also attend settlement to receive any money owing on your loan.
- Accounting to you after settlement
Once settlement has taken place, you will be provided with a full accounting of all of the proceeds of the sale.