Purchase of Residential Property
Private Treaty Sales - What happens once the Purchaser and the Vendor have agreed on a price?
Upon the sale price being negotiated and agreed, the following normally occurs:
- The Real Estate Agent prepares a sales advice;
- The Contract for Sale of Land will be altered to reflect the agreement between the parties (price, completion date, inclusions, exclusions)
- The Contract for Sale of Land is submitted to the Purchaser or his/her representative;
- If the parties agree with the terms of the Contract for Sale of Land, exchange of contracts will occur and the Purchaser pays a deposit, generally 10% of the purchase price.
Under the current form Contract for Sale of Land, the Purchaser receives a five (5) business day cooling-off period. The Cooling-off period is for the benefit of the Purchaser only. In the event that the Purchaser does not proceed with the purchase then the Contract for Sale of Land will be rescinded and the Purchaser will forfeit 0.25% of the purchase price which will be retain by you (Vendor).
This Cooling Off Period does not apply at auctions. In addition some Vendors will ask the Purchaser to waive the Cooling Off Period.
Once contracts are exchanged and unconditional (meaning the cooling-off period has lapsed) both parties are bound to the terms and conditions of the Contract for Sale of Land.
How long will it take to finalise the Contract for Sale of Land?
The standard time frame for a Contract for Sale of Land is 42 days (6 weeks) from the date of exchange. Exchange occurs when the Purchaser pays a deposit and enters into the Contract for Sale of Land with the Vendor.
Although the standard time frame is 42 days, this time frame may be shortened or extended by agreement between the parties, it is best if such agreement is reached before the contracts are signed.
Settlement may be effected on or before the due date as set out in the Contract for Sale of Land.
The purchaser is entitled to carry out a final inspection of the property prior to settlement and this will normally be arranged with the Real Estate Agent.
Upon settlement the purchaser pays the balance of the sale price which is applied to payout any Mortgage or Caveat on title and then the balance is paid at your direction.
Things to consider?
If you are selling simultaneously with your purchase, please ensure you notify the Real Estate Agent and your Solicitor.
You should ensure you have obtained finance prior to entering into the contract, unless the contract has a condition making it subject to finance.
There may be grants and stamp duty exemptions available to you and we can advise in relation to the same.