Buying a house is a major life transaction, and so it is important that you get advice from a specialist property lawyer who knows what to look for. This guide provides an overview of the house buying process and some of the key things to consider when buying a house in NSW.
How to buy a house in Sydney
When buying a house, most people will normally go through the following steps:
Step 1 – Find a property that you like.
Step 2 – Get advice on the contract.
Step 3 – Conduct further due diligence.
Step 4 – Get advice on the contract for the sale of land.
Step 5 – Negotiate the terms of the contract.
Step 6 – Sign the contract and pay a deposit.
Step 7 – Complete the purchase.
What’s inside the contract? Understanding the property contract review
The contract contains the terms of the sale between the vendor and the purchaser. This includes details such as:
The deposit and the purchase price;
What is included in the sale;
The time and place for settlement;
How the parties should communicate to each other;
Who is responsible for preparing the various documents involved in the transaction, such as transfer of title documents, mortgage discharge paperwork, or documents to register a mortgage;
What happens if somebody doesn’t comply with their obligations or complete the contract on time; and
Any other terms that are required by the parties.
The contract is also required to contain certain documents that are prescribed by the Conveyancing (Sale of Land) Regulation 2022 (NSW). This includes documents such as:
Title searches – these show what appears on the title to the land, including who owns it, and whether anyone has an interest in it (such as a mortgagee), or whether there are any encumbrances affecting the title (such as a right of way or restriction on the use of land).
Registered plans of the land – this is a diagram held by NSW Land Registry Services which is used to identify the location of your parcel of land. It will also contain details of the size of the land.
Planning and zoning information – This will include information such as how the land is zoned, what can be built in that zoning area, and whether the council has any records of the land being affected by things such as bushfires, flooding, landslip, land contamination, and more.
Sewer and drainage diagrams – This shows the location of the board sewer main, as well as the location of any pipes on the property itself.
Details of any encumbrances affecting the land such as easements, covenants, or restrictions on the use of land. This is important to ensure that you can use the land in the way you intend.
If the property is part of a strata scheme, a community scheme, or a neighbourhood plan, then there will be additional documents that relate to that scheme or plan as well.
Property law can be incredibly complex, and it is important to get specialist legal advice to fully understand the contractual and other risks associated with your real estate purchase.
Do you need to negotiate your property contract terms?
Usually the parties will negotiate the terms of the sale. This might be as simple as agreeing on the price, deposit, and settlement period, or it might be very in-depth depending on the terms that are in the contract and what each party needs.
As buying a house is a big financial commitment, it’s important that a specialist conveyancing solicitor looks after your interests and tailors the terms of the contract to your individual circumstances.
For example, you might need extra time for finance or due diligence, or you might be selling a property at the same time or coming up to the end of your lease, and may want to time the settlement date or amend the contract terms accordingly.
How long does it take to buy a house?
The length of time can vary greatly. To begin with, it can take several months or even years to find the right property.
Once a property is found, you’ll typically arrange for a house inspection and will be shown through the property by a real estate agent. You may also arrange follow up inspections to make sure you’re happy with the property.
When you’re ready to progress things, you’ll be given a sales contract for review. Your lawyer will then need to read the contract and provide you with advice. The timeline on this can vary depending on your lawyer, however at Thornton + King, we typically review contracts within one business day.
If changes need to be made to the contract, or if further enquiries need to be made, your solicitor will spend some time going back to the vendor’s solicitor to negotiate or request information. Again, the timeframes can vary depending on the extent of the negotiations and the responsiveness of the parties, but usually this will be complete in a few days.
Once you’re happy with the contract, both parties will sign the contract and then the countdown to settlement will begin. In New South Wales, most property contracts have a 42 day (6 week) settlement period which starts from the time that contracts are signed. This can be varied to be shorter or longer depending on the needs of the purchaser and the vendor.
Completing the contract
Once contracts are signed, your lawyer will work with you to ensure that you meet all of the compliance requirements to purchase the property. This will include things such as preparing declarations for the tax office, arranging payment of stamp duty, and assisting with obtaining any government grants.
Your conveyancing lawyer will also be dealing with the vendor’s lawyers on your behalf which will include making requisitions on title (a process where the vendor is asked different questions about the property to ensure that there are no defects in the title to the property). Your solicitor will also typically conduct further due diligence searches to test the warranties that the vendor has provided to you, and will check for hidden outstanding rate bills such as land tax, council rates, and water rates to ensure that you don’t inherit the previous owners outstanding bills.
Prior to settlement you’ll be given a breakdown of the settlement calculations which has been agreed to by the solicitors for both parties.
Settlement will then typically occur on the designated date. In NSW property settlements take place electronically.
At Thornton + King we provide an industry-leading level of service and diligence, to ensure that you receive the right advice on your property contract. We aim to support you through your conveyancing transaction, and help you to meet your commercial objectives. If you’d like to speak to one of our expert property and conveyancing lawyers, give us a call or submit an enquiry now.
