Selling Your Property?
Selling a property for the first time, or any time for that matter is a stressful project. Will you get the asking price? Do you need to renovate before putting it on the market? What is the best ‘selling method’? Should you use an agent or sell it yourself? Should you go to auction or a private sale? There are probably a million thoughts running through your head right now!
Our experienced property lawyers and conveyancers have been practising in property and conveyancing since 2007 and have assisted 1000s of sellers to sell their property. We know all the pitfalls and we know the stress that selling puts on a vendor. We are always on hand to answer your questions.
Why use us?
- Our property solicitors and conveyancers have been handling property and conveyancing transactions since 2007. We have assisted 1000s of vendors to sell their property.
- Our property and conveyancing solicitors are always on hand to answer questions and guide you through the process.
- We don’t charge any up-front legal fees. This means you can get the ball rolling quickly. In most circumstances we don’t charge a cent for legal fees until you actually settle on your property.
- In some instances we can also delay charges for disbursements until you settle.
- We charge a fixed fee, so you always know where you stand.
What to expect when selling a property?
In order to advertise your property for sale, you must have a written contract prepared by a solicitor. Once we have your instructions, our property lawyers and conveyancers will prepare the contract for you according to your instructions. We can prepare the contract, and have it ready for market within a week. The best bit is that there are no upfront legal fees.
We can also include special conditions, so that the deposit can be released to you to enable you to buy another property or so that you can have an extended settlement date on your terms.
The contract is a technical legal document which our property and conveyancing solicitors are experts in. Our property solicitors will advise you how the contract affects you, and ensure you understand your rights, and what you are agreeing to.
Frequently Asked Questions
What is Exchange?
Exchange of contracts is when the seller and purchaser sign the contract, and counterparts of the contract are exchanged between the seller and the buyer. The buyer will also pay the deposit at this stage. The deposit is usually held by the agent or the vendor’s solicitors in their trust account (if there is no agent). The deposit will usually only be released to you on settlement, however, we can structure your contract, so that if you need the deposit to be released to you, you can use that deposit for a purchase of your next home.
What is the Deposit?
The deposit under the standard contract is 10% of the purchase price. You can agree a lower deposit with the buyer, and it is standard practice for buyers to ask to use a 5% deposit. If you accept a lower deposit and the buyer pulls out of the contract you will still be able to claim the full 10% of the purchase price from the buyer, as a penalty for their default, however, claiming the remaining 5% if it’s not already held by the agent could be time consuming.
Can the Deposit be invested?
The deposit is usually held by the estate agent in their trust account and can be invested until completion/settlement so that the interest earned may be shared half each between you and the purchaser. With a small deposit over a short period of time such as 42 days it is unusual to invest the deposit, however, with an off the plan property it is common that the deposit will be invested.
Can I get access to the deposit before Settlement?
Yes. Provided the buyer agrees the deposit can be released to you prior to settlement. The deposit is usually only released in order to allow you to use it as a deposit on a related purchase. So, for instance, if you are selling a property and purchasing another property, you may be able to use the deposit from your buyer as your deposit on the new property.
What is the Cooling-Off Period?
The standard contract provides for a 5-business day cooling off period following exchange. This means that the purchaser can pull out of the contract within 5 business days of signing the contract. However, if the buyer pulls out during this time frame, and you are not at fault, the buyer will lose 0.25% of the purchase price, and this money is provided to you.
If the buyer does not pull out of the contract at the end of the cooling off period, the balance of the deposit is required to be paid. This is usually paid to the estate agent, who holds the deposit in their trust account.
We can request that the cooling off period is waived. If the cooling off period is waived the contract is unconditional from the moment you sign the contract and if they buyer pulls out of the contract, through no fault of yours, you can keep 10% of the purchase price, for the buyer’s default. Even if you accept a lesser deposit you are still entitled to claim the full 10% of the purchase price due to the buyer’s default.
What is Settlement and what happens on settlement?
Settlement or Completion is the day on which the property transfers to the buyer, and the buyer becomes the legal owner. On this day, your mortgage (if you have one) will also be discharged and the balance of the purchase price transferred to you. You will need to make sure that the property is vacant on this day and unless the contract allows for it, that nothing has been left at the property.
What amount of time do I have between exchange and Settlement?
This is usually 42 days, but there is nothing to prevent you from negotiating a different timeframe and the timeframe can be shortened or lengthened depending on your negotiation. Sometimes persons may require a different period in order to fit in with the end of a rental lease or because they are purchasing/selling another property. There is no hard and fast rule with the contract and everything can be negotiated. Our property and conveyancing solicitors will handle all of this for you as soon as you give them your instructions.
What if something happens and I cannot settle on the date agreed?
In the NSW contract, time is not of the essence. This means that you will not be in breach of your contract if something unexpected happens, and you cannot settle on your settlement date. However, the purchaser could issue you with a notice to complete, which must provide you with reasonable time in which to settle. The time granted is usually 14 days, and you could be liable for to the purchaser for compensation in relation to storage fees and accommodation costs incurred by the purchaser due to the delay.
What if the purchaser cannot settle on date agreed?
If the purchaser fails to complete on the agreed date, you would be able to issue the purchaser with notice to complete. Similar to yourself, the purchaser would not be in default of the contract as time is not of the essence in NSW. You would usually allow him a period of 14 days (it must be a reasonable period). You would be entitled to charge interest on the purchase price on a daily rate. Our contracts are structured so that the purchaser would be liable to you for 10% daily interest rate on the balance of the purchase price.
The property is tenanted, can I sell it as an investment property to a purchaser?
The standard contract for sale provides for either vacant possession or subject to tenancy. If there is currently a tenant in the property, and the purchaser wants the current tenant to remain, you should advise our property and conveyancing lawyers of this. Our property and conveyancing lawyers will ensure that a copy of the current tenancy agreement is provided to the purchaser. If the tenant is staying, we will provide notice to the tenant that there will be the new landlord, and that all rents are due to that person from the day of settlement. We will also ensure that any deposit paid on the property transfers to the purchaser.
My property is currently tenanted. The purchaser wants an empty property. What can I do?
If you currently have a tenant you will need to give them notice to leave the property. If the property is still subject to a fixed term lease, you must give the purchaser until the end of the lease to move out. If the lease has expired and the tenant is on a roll over contract you must give them a period of 30 days’ notice from the date of exchange of contracts.
Ordinarily you would give notice to the tenant immediately after contracts have been exchanged but what happens if the tenant refuses to go or cannot find other accommodation readily? You cannot force the tenant out, except by going to the Tribunal to get an order for possession. That may take a long time – beyond the date for completion of the sale.
A seller’s inability to give vacant possession at the time set for completion is a breach of contract, giving your buyer the right to claim damages (compensation).
Courts have been known to award damages for the cost of storage of the buyer’s furniture, and the cost of other accommodation where a property has not been available for occupation when promised.
You must therefore either: –
- Be confident that your tenant will move out in time for you to comply with your duty under the contract; or
- Persuade your buyer to accept a special clause in the contract excusing the consequences of your failure to give vacant possession on time, because of the wrongful actions of the tenant.
You would be wise to speak to your tenant or your managing agent about this issue before exchange of contracts
What information do I need to tell the buyer about the property?
In NSW, the vendor has an obligation of disclosure, and you warrant to you the purchaser that the planning certificate is up to date and correct, that there are no buildings that could warrant a demolition or upgrade order by the council (unless disclosed) and that you do not know anything adverse about the property as per part 3 of the Conveyancing (Sale of Land) Regulations 2017, or, if you do know of something adverse that will affect the property, you have disclosed that in the contract. Adverse affectations can be boundary disputes, neighbour disputes and realignment issues. If you believe that your property may be affected by any notice or order you should tell our property and conveyancing lawyers this so that appropriate measures can be taken. It is important to ensure that we comply with our disclosure requirements as failing to do so can allow the purchaser to pull out of the contract with no financial penalty.
Will the rates and bills on the property be divided between me and the Purchaser?
Yes. On completion, monies payable in relation to the property are adjusted between you and the purchaser. You are liable for all monies owing in relation to council rates, water rates, strata levies, up to and including the date of completion, and the purchaser is responsible for the remaining days until the next bill date. As you remain liable for each bill until the next bill date, our conveyancing and property lawyers ensure that the purchaser provides cheques at settlement, made payable to the relevant billing bodies for rates due until the next bill date.
Following settlement, the Land Registry Service notifies the council and relevant authorities of the change of ownership. Therefore, the council will be aware that you are no longer owner of the property. However, you will need to cancel other services, such as internet, gas and electricity.
The purchaser would like to take early possession of the property. Should I allow this?
We would urge you against allowing this. As if the purchaser damages the property you may have no come back against the buyer (or need to issue court proceedings to recover compensation for any damage). However, if this is something you are willing to agree to, then we can prepare a special licence allowing the purchaser access to the property on licence, with strict conditions as to what they can and cannot do on the property.
Strata Properties
When you instruct us to act for you on a strata property we will immediately ask you whether the strata company has any plans for the property which may incur special levies. The reason we are concerned about this is that if special levies are going to be imposed, we want to ensure that they are adjusted between you and the buyer on settlement.
If works have already commenced on the premises the usual position is that the special levies will be paid in entirety by the seller. We would therefore want to know this in order to include a special condition in the contract, stating that special levy will be adjusted.
However, if the works have not yet commenced or a contractor has not yet been instructed, the special levy will be automatically adjusted on settlement.
Another important factor that you should be aware of is that, if special levies are not disclosed in the contract and the buyer later finds out that there are special levies and the cost of these special levies will be more than 1% of the purchase price, then the buyer can rescind the contract without penalty. This could be disastrous for the seller, as the buyer may not find out this information until well through the process, and if the buyer rescinds at this stage you would be back to square 1.
