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The Conveyancing Act 1919 (NSW) governs the process of conveyancing including the purchase and sale of a property in New South Wales. There are several terms or legal jargon you may hear throughout the process of conveyancing, some of the most commonly used terms are explained here https://pannulawyers.com.au/conveyancing-jargon translator/. There are many law firms and solicitors who practice conveyancing, to help you decide which one is right for you click here https://pannulawyers.com.au/how-will-i-know-who-are-the-right-firm-to-conduct-my-conveyancing/.
Purchasing a property involves the following steps:
You must conduct an inspection of the property prior to purchase, auction or putting down a deposit. A contract for the sale of land will not give you any guarantees about the quality of the property. Inspections also will assist purchasers in confirming the inclusions or
improvements that a property is being sold with so that it may be identified on the contract. Failing to do so may result in some inclusions not being on the property on the settlement date.
You must conduct an inspection of the property prior to purchase, auction or putting down a deposit. A contract for the sale of land will not give you any guarantees about the quality of the property. Inspections also will assist purchasers in confirming the inclusions or
improvements that a property is being sold with so that it may be identified on the contract. Failing to do so may result in some inclusions not being on the property on the settlement date.
It is also recommended that purchasers obtain a pest inspection report to inform the purchasers as to whether there is any termite management system in place, whether there are any termites detected, whether there is excessive moisture present and whether there are conditions that may make the property more susceptible to a pest attack. If you are purchasing a property within a strata plan, it is recommended that you obtain a strata inspection report which will provide information about the financial position of the owners corporation as well as details of what has been discussed at their annual general meeting. This can sometimes include important information about possible special levies being raised, defects or insurance claims affecting the property.
A signed copy of two identical contracts, one for the Purchaser and one for the Vendor, are exchanged between the parties. This makes the contract binding between the parties. Sometimes, the contracts might need amendments, depending on the needs of the parties and the terms of the special conditions.
Cooling Off
Section 66S of the Conveyancing Act 1919 (NSW) states that cooling off period starts from the date on which the contract was made. The cooling off period is usually 5 business days which gives the purchaser time to conduct any pre-inspection reports and secure unconditional finance. If the purchaser does not wish to proceed they must exercise their right to cool off, which in doing so will forfeit their 0.25% deposit. However, there are some transactions for residential properties where a vendor requires a section 66W certificate for exchange. S66W of the Conveyancing Act 1919 (NSW) enables a purchaser to waive their right to a cooling off period, making exchange unconditional and binding the purchaser and vendor without any cooling off period. This kind of exchange is common for most off the plan transactions. Purchasing a property at auction similarly means that the contract terms are binding upon the successful bidder.
Stamp Duty/Transfer Duty
Every transfer transaction attracts stamp duty unless there is a concession or exemption that applies to your purchase for example if you are a first home buyer, or transferring property between spouses pursuant to a Court order or Binding Financial Agreement. Stamp Duty is payable on or before settlement or 3 months after exchange, whichever is earlier. If you are purchasing an off the plan dwelling which you intend to occupy to be your primary place of residence, you will be given an extra 12 months to pay your stamp duty. Stamp Duty is payable within 3 months for any purchase of vacant land whether the land be registered or unregistered. In some transactions involving an on-sell contract, each purchaser must still pay transfer duty if the property is transferring to them and a subsequent purchaser. Delay in paying stamp duty will accrue interest and settlement will not proceed until and unless the stamp duty has been paid.
To prepare for settlement, the purchaser must ensure that they have completed a final inspection 1 to 3 days prior to the settlement date or on the day of settlement. The main purpose of this is to ensure the property is in the same condition that the property was sold in when contracts were exchanged. The purchaser is also to check that all the inclusions that have been identified on the contract are on the property at settlement.
The purchaser must also sign and return all loan documents to the bank if the purchase is not a cash purchase. Thereafter, the purchaser must ensure that they have adequate funds for any shortfall that the bank is not funding in their loan for example stamp duty or the balance of deposit to be paid at settlement.
The remaining steps including processing stamp duty, verification of identity, obtaining client authorisation forms, ordering rates certificates for council, water and strata (if applicable), calculating settlement adjustments and providing a breakdown for the total funds required for settlement are all done by your lawyer or conveyancer.
On the settlement day, your bank will provide the available funds for settlement. This in addition to your shortfall will pay all required payment destinations through the electronic workspace called PEXA. Thereafter, the property will be transferred into your name as you direct. The purchaser can then contact the agent to collect keys for the property.
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