Process for purchasers
Looking to buy a property?
Buying a home or an investment property will probably be the most expensive and important decision you will ever make so it pays to do your homework. First find a property that suits your needs and your budget. Once you have found a property then the following steps will occur:
- Talk to your bank or broker. They will calculate what you can afford to spend by adding the amount you have saved with the amount you can borrow. You will also need to allow for stamp duty, lender mortgage insurance, bank fees, legal fees and moving costs.
- Obtain advice from a Licensed Conveyancer. They will review the contract which will include the following documents –
- copy of the title search from the Land and Property Information NSW;
- copies of all documents creating easements or restrictive covenants;
- Section 149 certificate from the local council, detailing zoning and other information;
- sewerage diagram;
- cooling-off statement;
- notice directing parties to the Conveyancing Act 1919 (Section 52A) and the Conveyancing (Sale of Land) Regulation 2000;
- if it is a strata unit, copies of the folio of the Register for the lot and common property and a copy of the strata plan;
- Swimming pool compliance certificate, Home Owners Warranty Insurance (if applicable).
If the information is not attached, you may be entitled to rescind the contract within 14 days of exchanging the contract. You may also reserve the right to rescind the contract if the seller breaches certain warranties required by the Vendor Disclosure and Warranty Regulation.
- They will also advise you in regards to the inclusions, special conditions (including any default clauses), any easements or restrictions on the land, any consents or licences associated with the property etc.
- It is recommended you undertake thorough pre-purchase inspections including pest and building inspections. You may also wish to undertake a survey and obtain a building certificate from the local council.
Exchange of Contracts
Each party signs a copy of the contract and the purchaser pays the deposit. The purchasers’ conveyancer will then receive the contract signed by the vendor and the vendors’ conveyancer will receive the contract signed by the purchaser. The contracts are then dated and are ‘exchanged’.
All contracts for residential property in NSW will automatically come with a 5 working day cooling off period for the benefit of the purchaser (unless the property is being sold at auction where there is automatically no cooling off period). If the purchaser decides to pull out of the contract during the cooling off period they will forfeit to the vendor 0.25% of the purchase price. The Cooling off period does not apply to rural or commercial properties.
The standard settlement period is 42 days (6 weeks) however a shorter or longer settlement period can negotiated between the parties. Generally if settlement is delayed as a result of the purchaser or their bank penalty interest may be charged by the vendor.
On the day of settlement the purchaser is entitled to do a final inspection of the property and if everything is in order settlement will proceed. This occurs once the balance of the purchase price is paid to the vendors and title documents are handed over to the purchasers’ conveyancer.
The agent is then advised of settlement and you can collect your keys.