This non-exhaustive guide is intended to provide a general overview of the usual procedure when buying a property in New South Wales.
1. Finance
The first step is to figure out how you are going to fund your property purchase. This Is usually either by way of your own funds, or a loan from a bank or other lender.
2. Find a Property
Once you find a property that you are happy with, make sure to conduct due diligence on the property. This can include things like undertaking a building and pest or strata report. The sky is the limit when it comes to due diligence, although the circumstances of the sale may limit the time in which you have to conduct due diligence. To help you with this, we’ve compiled a short guide of “things to check before buying a property”.
3. Reviewing Contracts
Once you’ve told the selling agent that you’re interested in the property, they will usually provide you with a contract for the sale of land. This contract contains all of the terms and conditions associated with the sale, such as the price, settlement period, how adjustments are made, any obligations of the parties, how settlement will actually take place, and much more. Contracts are typically 50-100 pages but can range into thousands of pages, and you’ll need a lawyer to review this and provide you with advice on its content. For more information on what this looks like, take a look at our guide on What we do for you when we act on your property purchase.
4. Negotiating and Exchanging Contracts
After you have received advice on your contract, your lawyer may need to negotiate amendments to that contract based on what is in the contract and what your individual requirements are. At this stage your lawyer will reach out to the vendor’s lawyer and will make these requests.
Once the contract is negotiated to a form you are happy with, you’ll then arrange signing (or in the case of an auction, you’ll then be in a position to sign a contract at the auction if you are the winning bidder).
In New South Wales, contracts are entered into by way of exchanged counterparts – meaning that the vendor will sign one copy and give it to the purchaser to keep, and the purchaser will sign one identical copy and give it to the vendor to keep. At this time a deposit will also be paid by the purchaser (usually 10% of the price) and the contracts will be dated. From this point the contract is binding on both parties, subject to any contract conditions such as a cooling off period.
5. Pre-Settlement Processes
Once contracts have been exchanged, we’ll be ensuring that you meet all of your compliance obligations, and that the vendor meets all of their obligations. This includes things such as facilitating payment of your stamp duty, and arranging for the various tax declarations to be provided to the tax office by you and the vendor.
At this stage we’ll also be checking to make sure there are no outstanding rates or taxes on the property which you might inherit, and we’ll also be serving the vendor with requisitions on title, which is a bunch of questions that check that the vendor’s title to the land isn’t defective.
During this time we’ll also be assisting you in making final settlement calculations, scheduling settlement, and if you have a bank involved in the transaction, making sure that your bank is ready to settle on time.
6. Settlement
On the date of settlement, everything will usually take place electronically. Simultaneously at the time of settlement, the title to the land will pass to you, and the funds you owe the vendor will be transferred to them, along with any outstanding payments being made to the council, water authority, the tax office, and any other relevant parties.
Once settlement is complete, you’ll be ready to pick up the keys and enjoy the ownership of your new property.
The property lawyers at Thornton and King have decades of specialised experience in property law and conveyancing. If you’re thinking of buying property, we’d love to work with you. Give us a call or submit an enquiry now.
