If you’ve been thinking of selling your property but aren’t sure where to begin, this guide provides an overview of the conveyancing process when selling real estate in New South Wales.
The guide is intended to provide a general overview only, and individual transactions will vary.
1. Find A Lawyer
Before a property can be marketed for sale in New South Wales, a contract for sale of land must be prepared by a lawyer.
The contract must include certain prescribed documents such as title searches, plans of the land, planning and zoning information, and sewerage and drainage diagrams. Where the property is part of a strata scheme, there will also be various strata related documents in the contract such as copies of the registered by-laws.
In addition to this, your lawyer will include the terms and conditions of the sale. This includes things such as when settlement will take place, how a deposit gets paid, who is responsible for what searches and costs during the conveyancing process, and what will happen if something goes wrong during the transaction.
2. Appoint a real estate agent
Once the contract has been prepared, a real estate agent can legally market your property for sale. Once you’ve selected a real estate agent, they will usually provide you with an exclusive agency agreement which dictates the terms of their engagement.
Once your agent has been engaged, they will make suggestions on how to achieve the best sale price for your property which will include things such as making touch-ups to the property, decorating the property in a specific way, advertising the property on online platforms, and coming up with a timeline and plan for your sale campaign.
3. Negotiation and exchange of contracts
Once a prospective purchaser is interested in your property, the negotiations will begin. Your real estate agent will typically be responsible for negotiating price with potential purchasers, while your lawyer will be responsible for negotiating the terms of the contract.
Once a contract has been provided to a potential purchaser, they will usually have their own lawyer review the contract and at that stage they may have their lawyer contact your lawyer to negotiate certain terms in the contract.
Once the parties have reached agreement on the terms of the contract, the purchaser will pay a deposit (usually 10% of the price) and the parties will sign, date, and exchange identical counterparts of the final contract. This is known as ‘exchanging contracts’ and is the point at which the sale gets locked in.
Once contracts are exchanged, there will be a settlement period (usually 42) during which the parties will prepare for settlement. This will include things such as signing loan paperwork, adjusting outstanding rates, and preparing the title transfer documentation.
On the day of settlement the purchaser will pay the balance of the purchase price owing, and the vendor will sign a transfer document which will transfer ownership of the land to the purchaser. Settlement will usually take place electronically between the lawyers on either side of the transaction, and no physical exchange of documents or money is required.
5. Other considerations
If you are selling an investment property, it’s also a great idea to speak with your accountant prior to starting the sale process, so that you are aware of any tax obligations that may fall due because of your sale. Depending on how you have used the property in the past, you could be liable for capital gains tax or goods and services tax.
If you’re thinking of selling your property, the team at Thornton + King oversee hundreds of property sales each year. The experts in our property law team have been working on property transactions for decades, and our team includes one of the few Law Society Accredited Specialists in the state. We’d love to hear from you. Give us a call or submit an enquiry now.