Residential Purchases & Sales

Buying or selling a home can be challenging both financially and emotionally. You can help to prepare yourself for these challenges by understanding the steps involved.

Method of Sale

Most residential properties in New South Wales are sold either by auction or by private treaty.

Auction is a method of sale whereby a number of buyers come together and bid against each other to secure the property. The general view is that an auction is the most reliable way of achieving the true market value for a property, because all of the willing buyers can come together at the same time and the highest bidder will win.

A seller nominates a reserve for the property, which is the lowest amount that they are willing to accept for the property. The buyers generally do not know the amount of the reserve prior to the auction, and this can lead to a buyer paying more than a seller might otherwise be willing to accept. If the bidding at the auction exceeds the reserve amount, then the property is sold when the auction hammer drops. There is no opportunity for the seller to change their minds after the reserve has been passed. However, if the bidding does not reach the reserve, the property can be “passed in”. At that point, the seller may choose to negotiate with the bidders or place the property back on the market.

Auctions are a popular way to sell residential property in New South Wales, especially in the Sydney property market. However, there are generally higher upfront costs for the seller in an auction, as a structured advertising campaign is usually necessary to ensure that enough motivated bidders attend the auction.

Alternatively, the seller can choose to sell their home through private treaty by listing the property for sale at a set price or range. This is a lower pressure selling method in comparison to an auction. This method allows a seller to have greater control over the sale, and provides the seller with time to consider offers as they are received.

A private treaty sale can be the right choice for unusual properties or circumstances when a seller is willing to wait for the right buyer to come along. It is also more usual to elect for a private treaty sale when the real estate market is slower in a particular area.

Selling Residential Property

The first step prior to selling a property is to have a contract of sale. This contract must meet minimum requirements including that it must list all exclusions (that is, fixtures on the property which are not offered as part of the sale). In New South Wales a contract must also include a copy of the title, a drainage diagram, a current zoning certificate and a statement of the buyer’s cooling-off rights. In addition, if the property has a pool, it must include a valid certificate of compliance (unless the property is part of a strata scheme). Ensuring that the contract has all the necessary documents is vital, because a buyer can rescind an incomplete contract at any time within the first 14 days after exchanging contracts.

Buying Residential Property

Buying a property, whether as a family home or an investment, can be exciting, stressful and overwhelming. From organising the finance to conducting the due diligence searches, the onus is on the buyer to do everything that is required, and the rule is definitely “buyer beware”.

There are some safeguards in place for buyers. For instance, in New South Wales a purchaser of property in a private treaty has a five-day cooling off period to withdraw from the sale. This provides a safety net for buyers who get carried away and make impulsive offers on a property that they cannot afford. If you change your mind about proceeding during the cooling-off period, you may rescind the contract with written notice and will forfeit 0.25% of the deposit.

Contracts can also include conditions such as making the offer to purchase conditional on factors such as the buyer being able to secure satisfactory finance, or a satisfactory building and pest inspection on the property.

The same is not true of a purchase that occurs at auction. There is no cooling off period for an auction purchase, and the purchase cannot be made conditional. The successful bidder must sign the sale contract and pay a deposit on the spot, which is usually 10% of the purchase price. Even if the property is not sold under the hammer, but the exchange of contracts happens on auction day, there is still no cooling off period for the buyer.

How can we help with your conveyancing matter?

Conveyancing is the legal work involved in transferring the ownership of real estate from one party to another. Buying or selling property is often the largest and most important financial transaction you will ever make, and we have the skills and experience to ensure that your conveyancing transaction runs smoothly and efficiently. Licensed conveyancers are not limited to residential property and our expertise extends to commercial property, the sale and purchase of businesses and the leasing of premises whether residential, retail, or commercial. We can also advise on mortgaging and refinancing of loans secured by your property.

Rayward Conveyancing is your answer to all your conveyancing and property needs, complex or otherwise. No question is too hard or too trivial and we won’t bombard you with legal jargon. Our advice is professional yet friendly, with most of our conveyancing services delivered at a fixed fee.

If you need any assistance, contact [email protected] or call 02 9481 7000 for expert conveyancing and property services.