Step by Step guide to sell the property in NSW
When you decide to sell your property whether it is your residential property or investing property, you need an experienced conveyancer to start the process. Most importantly, you need to know every step involve during the process and after the settlement for successful completion of sale of your property. We here at KDL conveyancing help vendor to sell their property smoothly and efficiently by providing tailored and professional conveyancing service. So, your sale of property completed as seamlessly as possible.
If you are buying the property, using the proceed from the sale of existing property, we will help to coordinate your transaction. So that your sale and purchase settled simultaneously.
Preparation of Contract of Sale of Land
Frist things first, your conveyancer will prepare the COS and you can make an instruction to your nominated real estate agents for the marketing purpose to sell your property. when you provide a clear instruction to draft the contract with required documents, we will prepare the draft contract with an information detail provided. the COS will provide an information your nominated real estate agents details. Status of your ownerships, title details and description of your property, special condition of sale of land if you are planning to proceed your sell with special condition to protect your interest on sale and what fitting, and fixtures are included in the sale.
Prescribed Documents and Warranty and Special Conditions
The COS must attach certain disclosure material as required by Section 52(A) of the Conveyancing Act 1919 (NSW) as a “prescribed documents” which explain the details of your property to the potential buyer. The List of Such documents are listed in the Schedule 1, Conveyancing Sale of Land Regulation 2017,
Vendor also have a responsibility to warrant the potential purchaser of certain condition of the property mentioned in the Schedule 3 of the Conveyancing Sales and Regulation, 2017 to avoid the chances of rescind the contract of sale by the purchaser with in a 14 days from the date of exchange of contract because purchaser by law, has a right to pull out from the contract if you are not provided with such documents in the contract .
We will order and search all the necessary documents required by law and attached to the contract to make a contract complete.
You also need to includes the special conditions in the contract that provide the extra lawyer of protection to the vendor in the situation where, sales may not proceed according to the plan or you want to sell the property in certain condition that protect your interest in the contract like as release of deposit before settlement , condition of finding another property or securing finance to buy another property land tax adjustment , inclusion exclusion of fitted items in the contract penalty clause or even extension of settlement .
Building warranty Insurance policy
This very concerned matter while selling your property that purchaser is not liable for any damaged occurred in the property during the period of exchange to settlement which means the risk of damage of residential property does not pass the purchaser until settlement. It is essential that building insurance is maintained till to the date of settlement of the property.
If the buildings or land or any part of it is damaged by fire, flood or other catastrophe, purchaser is not obliged to proceed the contract for the settlement unless vendor agreed to recover the cost of such damage. So, it is always advised to keep the insurance continue until the date of settlement to protect the vendor interest in the contract.
Even if your policy is due before settlement you are advised to renew the policy and then claim a rebate where possible, after settlement.
Exclusive Agency Agreement
An Estate Agent must have an exclusive agency agreement signed with vendor, which is commonly used, before they can list the property for sale, but you may choose to sign other type of agreement if you agreed to the Agency. If you are not sure of the terms of the agency agreement, you should have your conveyancer explain it to you.
Agency agreements are usually for a fixed period of time and cannot be ended prior to the end of that period unless both seller and agent agreed to terminate. which is normally signed for 90 days but it can be vary as per the agreement between vendor and Purchaser.
It is recommended that vendor have a one agreement at a time to avoid the payment of commission to more than one agent.
Exchange of Contract
Exchange of Contract can be done by Conveyancer or Nominated Real Estate Agent
In NSW, exchange of contracts happens when two copies of the contract, one copy signed by you as the vendor and one copy signed by the purchaser) are swapped or “exchanged” and a deposit is paid.
Exchange of contracts can be done either by conveyancer or the real estate agent. The date of exchange is noted on the front page of each contract. After exchange of contract and deposit paid, both parties are legally bound to settle the property. no party can rescind the contract unless required by law. After exchange of contract settlement can be done within time specified in the contract.
Cooling off Period
If the property is sold by private treaty, contracts may be exchanged subject to a cooling off period. Purchasers typically have five business days during which they can withdraw from the transaction. The cooling off period can be waived, reduced or extended by negotiation. If the purchaser decides not to proceed for any reason like not being able to secure finance, not like the property or any reason whatsoever can rescind before expiring of cooling off period. in this case, purchaser required to forfeit the deposit of 0.25% to the vendor. The contract is then at the end and neither party has any further claim against the other. if you are selling your property by auction, there is no cooling off period.
Discharge of Mortgage:
If there is a mortgage registered on the property, vendor needs to discharge of such mortgage at or before the settlement of the property. Conveyancer will prompt you to sign a discharge authority so that the bank is aware of the sale and upcoming settlement. Once you provide the authority to discharge the bank will contact conveyancer via PEXA. The bank will confirm the payout figure to pay out the existing loan shortly before settlement and will organise for the mortgage to be discharged on settlement. The fixed payout figure will also be given to your conveyancer and the loan will be paid out from the proceeds of your sale.
Property Subject to existing Tenant
If there is a tenant continue to live in after settlement, rent need to be adjusted at the time of settlement. however, if the rent is in arrears, no adjustment will be made for such arrear in your favour as purchaser is not obliged to pay such a rent owed by vendor after settlement.
Property sold on vacant Possession:
if the property is sold under the condition of vacant possession, and tenant is still living at the property as per the current lease it is to make sure that lease has or will expire before the date of settlement. If not, tenant must be served the 30 days property vacant notice immediately after the exchange of contract be either landlord or managing agent to make sure that tenant has enough time to move out before the settlement date of 42 days.
Property with swimming Pool:
If you are selling the property with exiting swimming pool, you are required to disclose the certificate of Compliance or Non- Compliance Certificate and attached to the contract even it is not a prescribed document in the contract but if the property is less than 3 years old , the vendor is able to rely on the final occupation Certificate for the swimming pool that has been issued on the completion of the swimming pool being constructed.
If either of compliance or noncompliance Certificates is not attached to the Contract at the time of exchange, this will allow the Purchaser to terminate the Contract for Sale and all monies paid by them will be refunded.
In order to obtain a Pool Compliance or a Non Compliance Certificate you can either contact your local Council or a Private Pool Certifier who will come out and inspect the property and if the Pool is compliant will issue a Pool Compliance Certificate and if there are items that make the pool non-compliant they will issue a comprehensive report detailing the items that do not comply so that they can be rectified by you as Owner (if you so wish) or by the new Purchaser.
Land Tax Certificate:
If your property worth more than land tax threshold for the current year, then you are required to pay the land tax before you are selling the property to vendor and provide the cleared lant tax certificate, Section 47 Certificate, to the purchaser before settlement. land tax is calculated on the total value of all your taxable land above the land tax threshold, not on each individual property. however, if the combined value of your land does not exceed the threshold, you are not required to pay the land tax.
FRCGW Certificate
If the vendor is selling the property which has market value of $750,000 or more, Purchaser required to withhold the 12.5% of purchase price to the Australian Tax office however if vendor provide a cleared FRCGW certificate issued from the ATO, purchaser does not require to withhold the amount to the ATO as the clearance certificate will specify that withholding is not required on the acquisition of the property. So, vendor required to supply the cleared FRCGW certificate to the purchaser’s conveyancer before settlement of the property sold.
Council, Water and Strata Levy
Purchasers Conveyancer/ Solicitor prepare the settlement adjustment sheet before a week of settlement date and provide to the vendor solicitor to review and rectify if needed. The following item are reviewed and adjusted, which are
a) Council rates are levied for the financial year. They will be adjusted at the time of settlement. vendor pays the rates up until the day of settlement and the purchaser will be liable from then until the end of the current financial year which 30th June of every Calander year.
b) Water rate: Water rates are usually quarterly rates and the adjustment made will only be for the current quarter period. In some regional areas of NSW , the water rates are paid to council and may be incorporated within the council rates. water authority supplies the water and or sewer service and issue the quarterly rate plan which need to be an adjusted at the time of settlement
c) Strata Levy: If you are purchasing a lot in a strata scheme, the quarterly strata levy also need to be adjusted at the time of settlement. The quarterly levies can commence at any date from the date of Annual Genaral Meeting of the owner Corporation. The levy is adjusted in the same manner as council rates except that they are adjusted on the quarterly not annual rate. If there are not enough funds held by the owners corporation to cover either the normal running expenses or a special job has to be carried out, onwer Corportion may impose a one time special levey to cover the cost associated with such job. Vendor solicitor has to negotiate and confirm with the purchaser conveyancer that who is going to pay the such levy before settlement .
At settlement:
Settlement is facilitated through the National Electronic Platform called PEXA. There will be no physical attendance of the parties, no cheque will be created, and No CT will be provided to the purchaser as previously required at the time of settlement.
All parties involved in the transaction will be invited at PEXA and sign on behalf of their clients at PEXA and settlement will be concluded by lodging the documents to LRS disburse the money to related parties.
After Settlement
After your matter has settled, we will account to you for any of the proceeds of sale after all adjustments are made and any loan repaid to the mortgagee on title
The change of ownership details will be notified to Council, the water authority and Valuer General the title documents including Transfer, notice of sale mortgage documents are lodged for registration at the Land Registry Service, following settlement.
After document are lodged and money is dispersed to the related parties, we will send you the letter of settlement completion where we will explain all the work done including your responsibility after settlement and along with document attachment. we will archive the file for 7 years as required by law.
Congratulation your property is settled. If you have any question, we are happy to assist you for your next property sale. Please contact us via email at info@kdlconveyancing.com.au or call on 0451585152
