faq

Q. We want to sell our home, what do we need to do?
A.For your property to be listed for sale either privately or with an agent, it is law that you must have a draft Contract prepared. This document contains a full title search confirming that you own the property, a zoning certificate from the council and if applicable, a copy of a drainage diagram showing the connection of sewer mains to your property. This document needs to be prepared by your Conveyancer or Solicitor in anticipation of the property being sold.

Q. We have found a property to purchase. What should we do?
A.
The immediate steps to be taken or matters to be considered are:

  • Instruct a Conveyancer or Solicitor
  • Ensure that you have a written loan approval for this property
  • Arrange pre-purchase inspections e.g.. Building, Pest, Survey, Strata Report (as required)
  • Ensure that you have the deposit available or arrange Deposit Power Bond

Q. As the vendor, we have been asked to accept a 5% deposit on exchange. What is your advice?
A.
Normally the deposit is 10% of the price and is held by the stakeholder (usually your agent) pending completion of the sale. The deposit represents your security that the purchaser will complete the transaction. If the purchaser fails to complete the transaction he runs the risk that the deposit will be forfeited to you. If you are asked to accept a reduced deposit we would recommend that you seek the advice of your legal representative before making a decision about this matter.

Q. If I have agreed to purchase a property and paid a holding deposit on it, can I be gazumped?
A.
The answer is YES. Unfortunately until such time as contracts are exchanged, there is no binding agreement and either the vendor or the purchaser can withdraw from the deal. The holding deposit is normally refundable to the purchaser, regardless of who decides not to proceed. This is why (particularly from the purchasers point of view) an immediate exchange with a cooling off period can be an advantage.

Q. My agent has asked that I sign a contract and exchange with a cooling off period. What does this mean?
A.
Agents have the authority to effect an exchange of contracts on behalf of the parties to the transaction for the sale of residential property. This means that a legally binding contract is immediately entered into. The benefit of a cooling off period only applies to residential property which includes rural residential holdings up to 2.5 Ha.

Purchasers have the benefit of a 5 business day cooling off period. During this time you would normally ensure that you have a firm loan approval for the purchase and carry out such searches and inquiries (building and pest reports) as are considered necessary. Whilst the purchaser has the right to cancel (rescind) the contract prior to the expiration of the cooling off period, part of the deposit (0.25% of the price) is forfeited to the vendor. On a $400,000 transaction this would be $1,000.00.

If you are the vendor, you have the advantage of knowing that a sale has been effected (but subject to the purchaser’s right to cancel the contract during the cooling off period). However you do need to be aware that, normally, completion of the sale will take place within 35 to 42 days after the contract has been signed. This may not leave you much time if you have to find another property to purchase and coordinate the completion of both transactions so that you can move from one home to the other.

Q. The property I am interested in is being sold by auction. What do I need to know?
A.
If you successfully bid for a property at auction, you are immediately committed to a contract for the purchase of that property. The cooling off period referred to above does not apply to properties purchased at auction or contracts entered into following post auction negotiations if the contract is exchanged on the same day as the auction. Obviously you need to have a pre-approval for a loan, if required, to assist you with the purchase and also need to carry out your quality inspections (pest and building etc.) prior to the auction date.

You also need to have a budget or upper limit on the price you are prepared to pay and stick to it. It is easy to get carried away in the emotion of the moment.

Q. What are my obligations to have smoke alarms installed in my house?
A.
As from 1 May 2006 there is an obligation on owners of all residential buildings to install smoke alarms. There are specific requirements as to where in the house the smoke alarms must be installed. It is quite inexpensive to comply with the requirements and you should ensure that smoke alarms are correctly installed before your house is listed for sale.