FAQ – Buying property
PRE-EXCHANGE OF CONTRACTS
In NSW you will mostly deal with a real estate agent to inspect and negotiate a purchase price for buying property. When you have decided upon a property you make an offer to the real estate agent, who obtains the seller’s instructions. After an offer has been accepted by a seller you need to
- Give the real estate agent details of who will be acting for you. View our Property Conveyancing Purchase costs here.
- Instruct us to act on your behalf. This can be done by telephone or email during our normal office hours. Monday to Friday 8.30 a.m to 5.00 p.m
(Appointments to discuss and execute documents can be made outside of business hours by prior arrangement).
- Decide which method of exchanging the contract you would prefer. Call or email us to discuss.
- Instruct Absolute Legal Services to order any required pre-purchase inspections reports or make arrangements to obtain these reports yourself.
- Initiate your formal loan application by contacting your Bank and providing them with all details in relation to the property and signing your loan application.
- Discuss with your Bank arrangements for payment of the deposit on exchange (usually 10% of the purchase price) or obtain a Deposit Bond in lieu of paying a deposit.
- Download our Buying property and Purchase Instruction and Factsheet.
YOUR PRIORITIES PRE-EXCHANGE IN A NUTSHELL
- Instruct us to act for you
- If you need finance, immediately arrange to complete your loan application
We will discuss with you all of your property buying requirements such as arranging any necessary pre-purchase reports as soon as you provide us with your instructions to act for you.
EXCHANGING THE CONTRACT – BEWARE!
In New South Wales there are two methods of exchanging a contract when you are buying property (making the contract binding upon you and the buyer)
1. Agent Cooling Off Exchange – Buying Property
You can instruct your agent to exchange contracts as soon as you agree on the purchase price. You will need to pay .25% of the purchase price as an initial deposit and then you have 5 working days after that date to pay the balance of the 10% deposit and make the Contract unconditional. During the 5 day cooling off period (or any extension granted by the vendor) you will need to obtain necessary pre-purchase reports your Loan approval and an appointment to discuss the terms and conditions of the Contract. We will be in close contact with you during a cooling off period.
If you exchange under an Agent Cooling Off Exchange you will receive a completion date which is generally 42 days from the date you exchange the Contract.
If you receive an unsatisfactory pre-purchase inspection report or there are unsatisfactory conditions or other matters in the contract you can rescind (terminate the contract). The point .25% deposit paid by you is forfeited to the seller.
The advantage of exchanging under cooling off is that the vendor cannot sell the property to anyone else while the Contract is under cooling off. The disadvantage is that if you have to rescind the contract you will lose the 0.25% deposit, report fees and a small amount of legal fees.
2. Solicitor Exchange – Buying Property
The exchange of Contracts is conducted by Absolute Legal Services. The agent submits a sale advice to the vendors solicitor. The vendor’s solicitor submits the Contract to us. You arrange for loan approval if required, order property reports such as pest, building or strata inspection reports, obtain written contract advice from us, arrange appointment with us to discuss reports and the terms of the contract. We will also make all necessary enquiries with council and the vendor regarding any other property matters that are important to you.
The solicitor exchange can take 10 working days while we wait for the Contract to be submitted from the vendors solicitor; formal Loan approval; obtaining pre-purchase inspections; and obtaining an appointment with us.
The advantage of the solicitor exchange is that you have a little extra time to obtain loan approval, necessary pre-purchase inspections, obtain contract advice and amendments to the contract. The disadvantage is that the vendor is able to sell the property to another buyer while they await an exchange of Contracts with you. Most sellers will give you a reasonable time being 10 – 18 days to exchange the Contracts.
We confirm your completion date with you both verbally and in writing. We will provide you with correspondence detailing your next steps which may cover
- an appointment to discuss and sign your loan documents
- stamp duty exemptions and concessions if available
- payment of stamp duty by you
- building insurance
Approximately 2 weeks prior to your contract completion date, we will contact you and the Seller’s solicitor to check everyone is ready for the completion date. We also contact your Bank to ensure they are ready if you are obtaining finance for your purchase. If everyone is ready, we will then prepare and submit to you draft settlement figures showing the adjustments for the final purchase price and other statements detailing all the funds to be received from you and Banks and exactly how much we will require from you and when we will require any amounts from you.
We will provide you with full instructions on what you will need to do to be ready for the completion date.
We attempt to book your completion date and time as early as possible to avoid last minute problems. However, as the completion of your purchase will take place where the Seller’s title deed is (with their solicitor or their Bank) we often do not receive final confirmation until 1 – 3 days before completion. During this time we keep you informed by telephone.
In your pre-settlement correspondence from us we will have arranged for you to provide us with any balance of purchase funds required 3 – 5 days before your settlement and to make a final inspection of the property on the day of completion. You need to book the final inspection with your agent in advance.You do not need to attend the completion, we do this for you, but we will need you to be available by telephone in case any problems arise during the day.
We immediately phone you and the agent after the completion has taken place. You can then arrange to collect the keys from the agent. This is usually 15 – 30 minutes after the completion has taken place.
Legal Fees and Searches for Buying Property
Visit our fees page to view our legal fees.
The work covered by Absolute Legal Services is found here and submitted to you in writing with our written Legal Profession Act Fee and Disclosure Agreement.