If you are thinking of buying a new home in the new year, it is time to start thinking about the buying process. In New South Wales there are two ways to affect an Exchange of Contract for the purchase of a Residential property.
- With a 66W form; i.e. a waiver of the Cooling Off period, through your Solicitor / Conveyancer, or
- Under a 5 day Cooling-Off Period.
With the first method, and making the assumption that your offer to purchase has been accepted by the vendor, you will need to make an appointment with your chosen solicitor or conveyancer to sign the contract (which will have been sent to him/her from the Vendor’s Solicitor / Conveyancer), and have a bank cheque for the full 10% deposit (unless another amount as been agreed to by both parties).
A property is only considered as sold when a Contract for Sale has been signed by both the purchasers and the vendors and exchanged with the deposit cheque attached. Many buyers believe that once their offer is accepted, the property is theirs. This is not the case. Properties, where an exchange of contracts has not taken place, may still be shown to other buyers who may also wish to purchase the property, but the above conditions will apply to them also. In fact, until an Exchange of Contracts for Sale has occurred, the property can still be purchased by another party who may affect an Exchange of Contract for Sale with the appropriate deposit.
In nearly all cases, purchasers will want to carry out certain checks on the property once their offer has been accepted. But you should be aware that until the Contracts for Sale have been signed and exchanged and the deposit paid, the property is NOT sold to you.The only way to guarantee that no-one else can purchase your chosen property is to exchange Contracts for Sale under a 5 Day Cooling Off Period. Both you and the Vendor must agree to this method of exchange.
This Exchange of Contract for Sale is done through the Real Estate Agency with the appropriate paperwork. (Please see your Knox Family Real Estate representative to explain this paperwork to you). You pay 0.25% of the agreed purchase price and attach it to the contract you sign. The Real Estate Agent will affect the Exchange of Contracts for Sale. He / she will also hand to you certain paperwork which will inform you of what to do next.
The benefit to you of this type of Contract for Sale exchange is that no-one can now be introduced to the property, in fact, not even anyone who has already seen the property can put in an offer to buy. The property is sold to you and only you can pull out of the arrangement. (The Vendor may not pull out of the agreement once the Contact for Sale has been exchanged.) You have 5 full business days to complete any checks on the property and to be completely sure you wish to continue with the purchase. If you decided to continue, the deposit you have already paid becomes part of your 10% deposit (or other amount if applicable) and is due and payable at the end of the 5 full business days. If you decide not to continue with the purchase, the 0.25% paid by you when you signed the Contract for Sale, will go to the Vendor for having the property off the market for one week.
***It is important to seek independent advice before signing a contract***