A residential property cannot be advertised for sale until a contract of sale has been prepared. The contract must contain a copy of the title documents, drainage diagram and current zoning certificate and if your property has a swimming pool or spa pool a valid swimming pool certificate of compliance must also be included in the contract. Property exclusions must also be included and a statement of the buyer’s cooling off rights must be attached. The draft contract must be available for inspection at the agents office. It is important that you consult your conveyancer about preparing the contract to make sure that everything is in order.
If you are approached by a buyer you should refer them to your agent as they are experienced in this field. Your agent will get an offer that you can choose to accept or reject. Your agent can advise whether it is a fair offer and should be accepted or if you should come back to them with a counter offer, but at the end of the day it is up to you. The agent will also qualify the buyer and ensure they are in a position to sign contracts immediately.
Before the auction you must advise your agent in writing of a reserve price which is the lowest amount you are willing to accept. If bidding does not reach reserve the property will be passed in. If you property is passed in on the auction day your agent will negotiate with the interested bidders to achieve a sale, if a sale is not achieved your agent will then offer the property to sale on a private treaty basis.
If the property does sell at auction the successful bidder will sign the contract of sale and pay the 10% deposit immediately. The property unconditionally exchanges without a cooling off period.
There will be two copies of the contract of sale, one for the seller and one for the buyer. When you have accepted an offer on your house the seller and the buyer both sign one copy of the contract before they are swapped or ‘exchanged’, this is usually arranged by your conveyancer or agent. When the contract is signed the buyer is required to pay a 10% deposit. The buyer then has a 5 or 10 business day cooling off period to get bank valuations, pest reports and building reports done on the property. If the buyer decides not to proceed with the purchase they will forfeit 0.25% of the sale price. The cooling off period can be reduced, waived or extended by negotiation under certain circumstances. The buyers will need to pay the balance of the 10% deposit before the cooling off period expires, the remainder is due on settlement. If they withdraw from the sale after the cooling off period has expired they will forfeit their 10% deposit.
Settlement usually occurs 42 days after the contracts are signed. This can be reduced or extended by negotiation under certain circumstances. At settlement, the title of your property is changed over and the keys are exchanged. Settlement will normally be managed by your legal representative and financial adviser. Until settlement, the property is still the vendor’s responsibility so it is important you keep insurances, council rates and utilities are paid. The buyers 10% deposit that is held by the agent minus their commission rate will be transferred to you upon settlement.