Contract Preparation
When you instruct us to act for you on the sale of your property, we will open a file and write to you to confirm that we are acting on your behalf.
Applying for searches
We will request the sum of $550.00 from you to be deposited in our trust account. We will use these funds to obtain the property searches and enquiries which are mandatory inclusions in a NSW Contract for Sale. These include title search plus the deposited plan and any other relevant title documents, Section 149 Certificate, Sewerage Diagram, Land Tax Certificate.
When the funds have cleared through our trust account, we will apply for the requisite property searches.
Depending on the particular local council involved, it can take between 5-10 working days for us to receive the property searches, specifically the Council documents
We cannot predict the exact cost of these searches and enquiries as the cost is dependent on the number of documents that we need to obtain. If there is a balance remaining from the $550.00 it will be used as a credit towards part of our professional fees.
Survey, Building Certificate etc
We ask that you provide us with copies of any building certificates, survey documents etc you may have in your possession. If you do not have these documents, copies can be obtained by any prospective Purchaser (at their expense) from the local council.
Tenanted Property
If your property is sold subject to an existing tenancy agreement, we will require a copy of the Tenancy Agreement as it must be attached to the Contract for Sale.
Marketing Contract
When we receive the searches and any other documents required for the Contract, we will prepare a Marketing Contract which will be sent to your Agent. We will also send you a copy for your records. At that time, the Agent will be in a position to advertise the property for sale. It is illegal to market a property for sale without a Marketing Contract.
Building and Pest Inspections
These are not mandatory inclusions in NSW Contracts for Sale. If a prospective Purchaser wishes to do so, they can arrange these at their own expense.
Sales Instructions
When “offer and acceptance” has been achieved between you and a Purchaser, the Agent will fax to us Sales Instructions. Sales Instructions contain details of the Purchaser, the Purchaser’s lawyer, the sale price, property inclusions (such as carpets, curtains, light fittings), settlement time frame etc. When we receive the Sales Instructions, we will prepare a formal Contract for Sale. The Contract is prepared in duplicate; we retain one copy for your signature and the duplicate Contract is sent to the Purchaser’s lawyer for the Purchaser’s signature.
Appointment
We will contact you to arrange an appointment to:
Review and sign the Contract for Sale
Sign the Transfer. This document is required on settlement and is lodged after settlement with the NSW Land Titles Office (formerly the Registrar General’s Office). It notes the change of ownership on the title deeds.
Complete and sign a Discharge of Mortgage Authority (if applicable)
Hand the title deed to us (if there is no mortgage).
Once the Contract is signed, we will contact the Purchaser’s solicitors and let them know we are ready to “exchange”.
Exchange
Exchange of Contracts takes place when you and the Purchaser are satisfied with the terms of the Contract, when you have both signed your respective copies of the Contract and when the Purchaser’s finance has been approved in writing.
The Purchaser then pays the agreed deposit (usually a cheque payable to the Real Estate Agent’s Trust Account). The deposit cheque is usually handed to us on exchange and we forward it to the Agent following exchange. It is then held in the Agent’s Trust Account until settlement has occurred. If there is no Agent, the deposit will be held in our Trust Account.
During the exchange process, both Contracts (one signed by the Purchaser, the other signed by you) are checked to ensure that their contents are identical. The documents are then dated and physically exchanged (swapped) – we receive the Contract signed by the Purchaser and the Purchaser’s lawyer receives the Contract signed by you. Once Contracts are exchanged, the Vendor and Purchaser are both locked into the transaction. On exchange, the Purchaser’s lawyer will provide us with a Section 66W Certificate waiving the Purchaser’s right to any ‘cooling off’ period.
We will phone you following exchange to advise that exchange has occurred, and we will then confirm exchange in writing. We will also write to your Discharging Mortgagee (if applicable) to notify them of the date for settlement and request preparation of discharge documents and a payout figure in readiness for settlement.
Insurance
PLEASE NOTE: In NSW the insurance risk remains with the Vendor until completion. Therefore, you must keep all insurances in place until settlement has been confirmed.
Leading up to settlement
- As the settlement date draws near, the Purchaser’s lawyer will provide us with copies of up-to-date rates notices. (If you receive rates notices following exchange, please notify us and provide us with a copy. We suggest that you do not make any instalments on your rates accounts after exchange without contacting us first.)
- You should advise us if you make any changes to your financial arrangements, such as using the sale property as security for borrowings over another property, or if you refinance your loan.
- We will prepare and provide you with a detailed Settlement Statement setting out adjustments for rates, deposit paid, payout figures, legal fees etc.
- If the property is sold subject to existing tenancy, adjustments for rent are usually attended to by the Managing Agent.
Discharge of Mortgage
We will contact your Discharging Mortgagee to ‘book in’ settlement. A day or two prior to settlement, the Mortgagee will provide us with a payout figure sufficient to discharge the mortgage. Once we receive that figure, we can finalise details and payees of the settlement cheques in accordance with your instructions. You may decide to instruct your Mortgagee to receive all sale proceeds on settlement, and have the Mortgagee deposit the balance owing to you into your nominated account. Such deposits usually occur overnight.
Pre-settlement inspection
Prior to the settlement date, the Purchaser has the right to carry out a pre-settlement inspection of the property with the Agent. This inspection is usually done on the morning of settlement. When you vacate your property, it should be left in a clean and tidy state and in the same state as at the time of the exchange. There is a possibility that settlement will be delayed by the Purchaser if the pre-settlement inspection is unsatisfactory (or funds may be withheld from the deposit pending resolution).
Settlement
Settlements usually take place in Canberra between 2:30 pm – 4:00 pm Monday to Thursday and 1:00 pm – 4:00 pm on Friday.
Keys
Before settlement, we ask that you provide us or the agent with the keys to hand to the Purchaser’s lawyer on settlement. Keys should be delivered to our office before 12 noon on the day of settlement.
Your sale proceeds
- We will phone you when the settlement has taken place.
If you would like us to bank your sale proceeds following settlement, please provide written instructions, including the name of your Bank, the BSB and account numbers, account name and account type. While every effort is made by us to bank settlement cheques on the same day as the settlement, please understand that we cannot guarantee this will happen. In some circumstances, we may not be able to deposit sale proceeds until the next working day following settlement. - You may elect to collect your cheque/s from our office on the afternoon of settlement.
- Release of Deposit: On settlement, we will receive a letter from the Purchaser’s lawyer addressed to the Agent confirming that settlement has occurred and authorising the Agent to release the deposit held in its trust account to you. This letter is called an ‘Order on the Agent’. It is standard procedure for us to fax or email the Order on the Agent when we return to our office after settlement. The Agent will deduct the agreed commission from the deposit held and pay the balance of deposit to you, usually by sending you a cheque. If you wish to collect the cheque from the Agent, please make your own arrangements with the Agent for collection. If you wish the Agent to place the balance of the deposit into your nominated bank account, you must provide that information directly to the Agent, preferably in writing.
If the deposit is held in our trust account, the letter of authority to release the deposit will be addressed to us. We cannot release the deposit without the Purchaser’s Lawyers’ written authority, which will be received by us on settlement. We will obtain your instructions prior to settlement in relation to how you wish the deposit to be paid to you (eg. Collect a cheque from our office, direct deposit into your nominated bank account etc).
Electricity, gas and telephone connections
The cancellation of these services is your responsibility.
Rates and Water
The local council will be notified of the change in ownership of the property by the NSW Land Titles Office following registration of the Transfer into the Purchaser’s name. Once this occurs, rates notices will issue directly to the new owner.
Important Note: Sales or value over $2,000,000.00
Australian residents who are selling a taxable Australian property with a market value of $2,000,000.00 or more need to obtain a clearance certificate from the ATO to confirm that a 10% withholding amount does not need to be withheld. The vendor needs to provide a clearance certificate to the purchaser at settlement or the purchaser will be required to withhold 10% of the price and pass it to the ATO.
After settlement
Following settlement, we will write to you to confirm that the sale has been finalised and we will provide you with a detailed Settlement Statement, our Tax invoice, the original Contract and any other relevant documentation.
Please contact one of our experienced property lawyers or conveyancers to make an appointment on +61 2 6206 1300, or by email on info@elringtons.com.au
