FAQs - Selling a Property

So, you have decided to sell your property? There are many decisions for you to make and we have simplified the process for you by setting out a set by step guide.

Q. What is a contract for sale?
A. A contract for sale is a legal document which needs to be prepared prior to the property being marketed for sale.

Q. How much deposit does the purchaser have to pay?
A. 10% of the purchase price however this can be negotiated to achieve a an exchange of contracts.

Q. What is a deposit bond?
A. A deposit bond is an alternative to paying cash upon exchange of contracts. A deposit bond can issued by authorities and are underwritten by an insurance company. For example, Deposit Power and some financial institutions may provide one for a fee.

Q. Will receiving a small amount of money often referred to as a “holding deposit” secure the purchaser?
A. No, a legally binding agreement does not take place until exchange of contracts

Q. Who holds the deposit until settlement takes place?
A. The real estate agent will hold the deposit in a trust account or interest bearing account until settlement. You will need to provide your tax file number to the agent so the interest earned on the deposit will not be taxed. The interest earned will be split equally between you and the purchaser following settlement.

Q. What does “exchange of contracts” mean?
A. There are two identical copies of the contract. The vendor signs the original contract and the purchaser signs the other copy. The contracts are then checked carefully page by page to ensure that they are identical. Once identical the contracts are then dated. The agreed deposit is then paid. The contract for sale is a legally binding agreement at this point.

Q. What is a cooling off period?
A. 5 business days in which the purchaser is able to exercise their rights and cool off. If you require the contract to be unconditional upon exchange of contracts then you will require the purchaser to provide a section 66W certificate.

Q. What is a section 66W certificate?
A. A licensed conveyancer will explain the implications of waiving the cooling off period to the purchaser and if they agree then a section 66W certificate will be provided on exchange. There will be no cooling off period if a section 66W certificate is provided on exchange of contracts.

Q. Is there a cooling off period if I sell at auction?
A. No. Contracts will be legally binding at the fall of the hammer. Your licensed conveyancer should thoroughly review the contract and arrange any property inspections prior to you attending the auction which is why all searches are conducted and the contract is reviewed prior to attending and bidding at the auction.

Q. What do I have to do once contracts have exchanged?
A. You will need to notify your mortgage provider that your mortgage will be repaid and sign any relevant documents for this to occur. We will assist you in this regard. You need to initiate arrangements to leave the property (if you reside in the property being sold).

Q. What is settlement?
A. Settlement is when the vendor’s conveyancer and bank, the purchaser’s conveyancing, and their bank meet to exchange documents. Once all parties have received the documents that they require the funds are then handed over and settlement is complete. You will then be notified and you legally own the property.

Q. Do I need to attend settlement?
A. No. We will arrange for settlement agents to attend on your behalf.

Q. Do I need to keep the property insured until settlement?
A. Yes.

Q. Should I pay all my rates and notices before settlement?
A. We will arrange to pay any outstanding rates and notices if you they are not paid. We will confirm all settlement calculations with you prior to settlement.

Q. Do I need to advise the water authority, council or the valuer general of the change of ownership?
A. No. We will arrange for this to happen.

Q. Do I need to advise the electricity, telephone, gas or any other services companies of the change of ownership?
A. Yes. You may wish to start arranging this shortly after exchange of contracts to ensure that the service authorities are given enough notice to disconnect on the settlement date.