Australia is currently in the midst of one of the biggest property booms of the current generation. In Sydney alone, property prices have risen 25.8% in the past 12 months, and with record low mortgage rates of less than 2%, it certainly is a great time for sellers to consider their property options. Whether you are a property owner looking to upsize or downsize, or removing a property from your investment portfolio, there are many things sellers need to consider before embarking on the sales journey. To make this process area, we have put together the below guide, which includes important information that sellers need to both consider and make themselves aware of to ensure a smooth sale.
Real Estate Agent
Securing the services of a trusted and respected real estate agent, can ensure that you obtain the best price possible for your property. Your agent will assist you with marketing and advertising the property and will act on your behalf when dealing with potential buyers, such as through holding open inspections and presenting any offers made on your property.
From a legal perspective, we will also communicate directly with your agent, on your authority, preparing contracts of sale after receiving sales instructions. Your agent will also hold the deposit, the monetary amount paid by the purchaser to secure the property until settlement can be completed.
Solicitor or Conveyancer?
When selling your home, a solicitor or conveyancer plays an extremely important role, and
will handle all the legal paperwork required to complete the sale. Your solicitor or
conveyancer will act on your behalf to prepare a Contract of Sale, including any special
conditions which are exclusively relevant to your property as well as liaising with your lender
should you have a mortgage registered on the property, to complete a discharge which is
required to be completed so settlement can occur.
Your solicitor will also communicate directly with the purchaser’s solicitor in respect to the
contract and prepare and check essential settlement documents including the Transfer of
Land, Statement of Adjustments to ensure that all council rates, water charges, strata fees if
applicable, and any other fees and charges have been accounted for.
Choosing a solicitor who is reliable, efficient, and experienced in property law matters can
ensure that the sale of your home from contract right through to settlement is smooth, easy
and stress free.
The Duty of Disclosure
When selling your property, as the vendor you have a duty of disclosure which relates to providing certain information to the purchaser about the property, pursuant to the Conveyancing Act. Generally, this responsibility to disclose relevant property information is fulfilled through documents provided in the Contract of Sale.
Documents that are required to be produced by the seller under the Conveyancing (Sale of Land) Regulation 2010 include, a Planning Certificate, which will provide details of your property’s zoning and land use and other information such as;
- Whether the property is subject to flood protection controls.
- Whether the property is located within a designated bushfire prone area.
- Whether the land is subject to any restrictions in terms of development.
Other documents that are required to be provided to the purchaser through the Contract are, a title search, copy of the plan for the land which will describe the location of any easements or covenants, a copy of the Strata Plan if applicable, details of council rates charges, and any land tax payable.
If neither you as the vendor, or your sales agent who is acting on your instruction fails to disclose information or material facts to the purchaser, that is important information and relevant to the consideration process when purchasing a property, the purchaser may be able to terminate the contract, which could also see you liable for the purchaser’s costs. It is for this reason extremely important to seek experienced advice throughout the sales process, to ensure the disclosure obligations have been met.
Sale by Private Treaty or By Auction
Depending upon the status of the property market within your area you may choose to sell your property by private treaty or by auction. Both have several key differences which are important to understand in terms of proceeding with a sale.
Firstly, sale by private treaty involves, listing your house on the market at a set price. This price and subsequently the terms of the sale can then be negotiated by any interested parties. This process involves a party or parties making an offer on the property, and you as the vendor either accepting or declining the offer.
Sale by Auction on the other hand means potential buyers will bid for your property at a specified location, day, and time. The property will be sold once the property exceeds the reserve that you as the vendor set, which is the minimum amount you wish to receive for the property.
Auctions and sale by private treaty have both pros and cons. For example, in the current booming property market and auction may yield the best results in terms of a sales price. This decision should be discussed with your agent who will be in the best position to provide relevant advice.
Cooling off period – what is this?
Once you have accepted an offer on your property and the purchaser has executed a
Contract of Sale, there is a 5-day cooling off period in which they can withdraw from the sale.
During this 5-day period if the purchaser withdraws, they will need to pay to you 0.25% of the
purchase price, and you will be legally obligated to return their deposit.
Auctions however are completely different, with no cooling off period applicable to sales
using this process.
Deposit – Should I accept less than a 10% deposit?
Given the large increase in property prices, particularly over the last 3 years, there are occasions where a potential purchaser only wishes to pay 5% as a deposit as opposed to the standard 10%. This can be for a variety of reasons, such as they may be selling a property to purchase yours and have their cash tied up elsewhere, they may be first home buyers and relying on obtaining a larger loan or government concessions to complete the purchase. Either way, the decision to accept a deposit of less than 10% is entirely yours and is an issue that should be discussed with your solicitor or conveyancer to ensure adequate measures are taken to protect your interest.
Can I remove the dishwasher when I move out?
When providing instructions to your solicitor as part of the contract preparation stage it is important that you consider what chattels and fixtures you wish to exclude from the sale. A fixture is something that is attached to the property, and can include things such as tiled floor coverings, a stove and rangehood or a swimming pool and pump. Given that many people have differing views on this it is important to be clear with the purchaser in terms of details in the contract as to what is not included in the sale. Should you wish to take the dishwasher it is essential that this is listed on the contract as an exclusion.
Settlement – Do I have to attend?
Physically attending settlement is a thing of the past, and not even your solicitor or conveyancer will physically attend your settlement in most instances due to the introduction of electronic conveyancing. The PEXA electronic conveyancing platform enables the legal representatives for both parties to complete settlement securely online. This process ensures you receive your funds, or in the case of a mortgage any excess funds once your mortgage has been repaid, safely, securely, and faster than the manual process.
Your solicitor or conveyancer will handle all the settlement requirements on your behalf.
DL Legal – A stress free sales process
Selling a property is a big financial decision and it is important to have the right support to enable you to make the right choices along the way, and to navigate through the many steps involved in the conveyancing process.
At DF Legal our experienced property lawyers are dedicated to ensuring a smooth, efficient, and stress-free sale of your property. We take care of and do all the leg work on your behalf, and we pride ourselves on our ability to simplify legal transactions.
With our experience in property law, our team are well equipped to deal with even the most complex of sales, assisting and supporting our client at every step of the process.
If you are looking to take advantage of the property boom and are considering selling your property, contact our team today and book a free consultation.