Written by Joseph Antoun, Partner
Step 1: Negotiate a Price
For a private treaty sale, once you have found the home you wish to purchase, you can make an offer to the Vendor or their agent. Sometimes you can agree on a conditional offer. For example, you agree to purchase the home as long as the vendor enables you to obtain a property and pest inspection first.
Step 2: Arrange Conveyancing
Conveyancing is the process of legally transferring a property from the vendor to the purchaser. You can arrange this through your solicitor.
Before a vendor can offer a property for sale, they must have a Contract for Sale and have it available for inspection. Your solicitor or conveyancer should review this Contract. They should also conduct final checks on the property and make enquiries with the local authorities.
Step 3: Have the Property Inspected
Once you have found a property to purchase, you should arrange for a property and pest inspection before contracts are exchanged so that you are aware of any potential problems from the start.
You should also check with your council and state government roads and traffic authority regarding zoning issues and future property developments that may affect the property you are wishing to purchase.
Step 4: Exchange Contracts and pay the Deposit
After Uther Webster & Evans have reviewed the Contract for Sale, both you and the vendor sign a copy of the Contract and pass it on to each other. This is called ‘exchange of Contracts’.
If you purchase a home at auction, you will need to exchange Contracts and pay the deposit (usually 10% of the purchase price) at the auction. For a private treaty sale, you are required to pay a holding deposit (usually 1%) to indicate good faith and then pay the deposit when Contracts are exchanged. Even though a holding deposit has been paid, it doesn’t necessarily mean the property will be held exclusively for you.
Step 5: Cooling-Off Period
After the Contracts are exchanged in a private treaty sale, a legal cooling-off period may apply. During the cooling-off period you are able to withdraw from the Contract to purchase the property. The length of the cooling-off period varies from state to state.
Step 6: Settlement
Settlement occurs when you pay the balance of the purchase price and take ownership of the property. Final settlement normally takes place up to 6 weeks after Contracts are exchanged but this period can be negotiated between the parties.
The Certificate of Title (if any) will be handed to your bank (if the property is subject to a mortgage). The vendor’s agent will then provide you with the keys.