Contract for Sale
This is the first requirement for selling a house. Before marketing of your property can commence, a real estate agent will request a Contract for Sale of Land so that marketing can commence. Even if you decide to list the property for sale without the help of an agent, you must have a Contract for Sale of Land prepared. It is a good idea to contact your lawyer prior to listing the property for sale so that the Contract is ready when you are ready to list the property for sale.
Vendor Disclosure Requirements
When compiling a Contract for Sale of Land, the seller (also known as the vendor) needs to comply with and have attached to the Contract, vendor disclosure requirements. These include providing a zoning certificate (known as a section 10.7 certificate), a drainage diagram, a title search and a certificate detailing any easements, restrictions or covenants affecting the land. If the property includes a swimming pool, you will need to have the Swimming Pool Registered and a Swimming Pool compliance certificate.
When selling property, a number of warranties will be deemed to have been made by the vendor unless otherwise stated in the contract. These warranties are promises to a purchaser and are set out in Section 52A of the Conveyancing Act 1919 (NSW) and the Regulation made under it.
Some of these promises include the fact the land isn’t subject to any government development or proposals (such as road widening), no drains or sewers not depicted in the diagrams and that the zoning certificate is an accurate representation of the property. It is important to advise your Solicitor if you are unable to make these promises.
Exchange is the fancy word used when both the vendor and purchaser enter into the legal relationship to sell and buy the property. Exchange occurs when contracts have been signed by both the buyer and vendor and are in identical terms. At the point of exchange, the buyer pays a deposit of 10% (sometimes a 5% deposit can be paid if agreed between the parties) of the purchase price.
From time to time the purchaser may request early occupation to a property following exchange, but prior to settlement. If the buyer wants to move in to the property before settlement, the vendor may be entitled to be paid an occupation fee.
It’s time to hand over the keys and receive the balance of the purchase price. At settlement, the purchaser pays the outstanding purchase price, which is adjusted to take care of any outstanding (or overpaid) rates and water.