Conveyancing process for buying a property in NSW
Buying a property is an important investment decision for you. Sydney Conveyancing will work closely with you through entire conveyancing process for buying a property. The conveyancing process for buying a property is explained below for your understanding.
Offer and acceptance
Once an offer has been put by you and accepted by the vendor , we will advise you to get the contract to us from the agent by post or email for our review.
The Contract of sale has all the details of the property like the settlement period which is usually 42 days, the description of all the inclusions being sold with the property, Title Search stating any mortgages, easements, restrictions, etc that effect the use of the property.
Further a zoning certificate is annexed to the contract which states the zoning, whether the property is under commercial or a residential zone, the density of the area, etc. Lastly, the contract consists of a drainage diagram which shows , if and where the main sewer crosses the property.
The contract only covers aspects like title searches, etc but does not disclose the structural quality of the house. We will advise and assist you in obtaining a Pest, Building or a Strata Report (for Strata properties) if required for the property.
A building report can reveal what an untrained eye cannot e.g. problems with the drainage, extensions, etc. A pest report can show if the property is infected by termite, white ants, etc. A building and a pest inspector will be able to determine how serious the problems are and will be able to provide a rough estimate of the costs involved to rectify the above problems which in return can help you in renegotiating the purchase price if required.
A Strata Report is carried out for Strata Properties, i.e. for Units, Townhouses, or villas and provides information like any problems that other lots/units might have in the strata, insurance, any special levies being charged.
Before you sign the contract, we suggest that you apply for the loan approval which you can get from the banks, finance brokers, credit unions, etc as per your requirement and have it in place to move forward for exchange of the contracts. We further advice our clients to do budgeting and to know roughly how much their monthly repayment would be and to shop around a bit for the best deal that they can get.
Exchanging the contract
Once we have reviewed the contract and the inspection reports, we will advice you of any amendments that we will require to negotiate with the vendor’s solicitor/conveyancer for your benefit and will proceed to exchange of the contracts with your approval. We will advise the real estate agent and you as soon as the contracts are exchanged.
Cooling off Period
Every contract for the residential property has a five business day cooling off period which means that the purchaser has a five business days time to decide whether he wants to proceed with the purchase of the property or not. The vendor does not have the cooling off period and the contract is binding on the vendor once exchanged.
The decision of the purchaser to proceed or not largely depends upon factors like obtaining a final loan approval from the bank, getting pest and building reports organised if not done earlier and relying on those reports, getting the contract reviewed by the conveyancer if not done previously and seeking their advice. The cooling off period also gives time to the purchaser to get hold of 10% deposit payable before 5:00 pm on the fifth business day. The cooling off period can be extended with the consent of both the purchaser and the vendor if required. If the purchaser decided not to proceed with the contracts, the purchaser looses their .25% to the vendor.
If the purchaser proceeds with the purchase and the cooling off period expires, the contract becomes binding between both the parties. If after the cooling off period the purchaser is not able to complete the purchase for some reason and decided to rescind the contract, the purchaser loses his 10% deposit to the vendor. Incase the purchaser waives his right to cooling off period at the time of exchange under Sec 66W certificate, the contracts become binding on both the parties.
Stamp duty is payable on the contract within 3 months of the exchange of the contract or before settlement if there is an incoming mortgagee. Stamp duty depends upon the purchase price, higher the price, higher is the stamp duty. We will advise you how much the stamp duty is as soon as the contracts are exchanged. The First Home Buyers exemptions may be applicable - these change from time to time so please discuss this with us.
Once the contracts have become binding on both the parties, we will carry out the various relevant government searches like Council certificate, water certificate, etc and any other information that your lender may require. The searches will help to calculating any outstanding bills by the vendor, purchaser’s part of the adjustment for the bills.
Once the settlement date has approached which is usually 42 days from the date of the exchange of the contract or as agreed upon between the vendor and the purchaser and the mortgage documents have been signed and returned to the lender, we will liaise with the lender and the vendor’s solicitor to book settlement date, time and place. We will confirm the same with you in order for you to arrange the removalist if occupying the property, arranging a final inspection of the property, arranging insurance, etc. We will also inform the agent so that he can help you with the final inspection and organise arranging keys to the property on time.
Notice to Complete
If for some reason you are unable to proceed to settlement or your lender is not ready to settle, the vendor’s solicitor have a right to issue a Notice to Complete which means that we will have to settle the matter within 14 days, otherwise you will lose your 10% deposit. In addition to this, you will have to pay interest on the balance of the purchase price which is usually 10%per annum to the vendor starting from the day when the Notice was issued till the day settlement occurs.
We have the same right of issuing the Notice to Complete, incase the vendor is not ready to settle the matter but do not have the right to charge penalty interest.
As soon as the settlement is booked, we will draft a settlement statement adjusting the water, council and strata (if applicable) rates for vendor’s approval and request for the information relating to the cheques to be drawn for settlement. On receipt of the information we will request your lender to draw the bank cheques for settlement. We will request you to provide us with a bank cheque if there is a shortfall from the lender.
We will attend the settlement on your behalf and advice you that the property is yours once settlement is completed. We will forward an “Order on Agent” to the real estate agent which authorises him to release the keys to you and the deposit to the vendor. On the other hand, your lender will submit all the documents at the Department of Lands so that the property could be transferred under your name.
Department of Lands will advise Council and Sydney Water of the change of ownership. We will after a week, send all the documents and other necessary correspondence to you for your safekeeping in relation to your purchase.