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 property lawyer or conveyancer to sell your property
Before a property can be marketed for sale in New South Wales, a contract for sale of land must be prepared by a property lawyer or licensed conveyancer.
The contract must include certain prescribed documents in order for it to be legally binding. This includes things such as:
Title searches.
Plans of the land.
Planning and zoning information.
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.
Where the property forms part of a community scheme or a neighbourhood scheme, there will also be documents relating to that scheme.
In addition to this, your property 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.
It’s important that the contract is properly prepared by an experienced conveyancing lawyer. The contract for sale of land is usually the entire agreement between the vendor and the purchaser of the property, and so it is important that the terms of the sale protect your interests and are clearly documented in the contract.
2. Appoint a real estate agent to sell your property
Once the property sale 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 agency agreement which contains 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 may include things such as carrying out repairs and maintenance to the property, decorating the property in a specific way or perhaps even using professional stylists and staging, advertising the property on online platforms, and coming up with a timeline and plan for your sale campaign. They will also give you guidance as to whether the property should be sold by way of an auction or by way of private treaty.
When selling a property by auction, bidders will register and have the opportunity to place bids on the property in a controlled sales environment. If there are a lot of interested buyers for the property, an auction environment can work in the vendor’s favour as it may drive competition and result in a higher sale price.
Alternatively, it is sometimes a better option to not have a public auction and to instead sell a property by private treaty. This can be for many reasons, including an excess or a lack of interested buyers, the type of property being sold, the characteristics of the property, market conditions, or other factors such as the need for a quick and quiet sale.
3. Negotiation and exchange of property sale contracts
Once a potential purchaser has expressed interest in purchasing your property, the negotiations will begin. Your real estate agent will typically be responsible for negotiating price with potential purchasers, while your conveyancing 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 conveyancing solicitor review the contract and at that stage the property lawyers will engage with one another to negotiate and finalise the terms of the sale.
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 becomes binding.
4. Settlement – completing the sale of your property
Once contracts are exchanged, there will be a settlement period (usually 42 days, but this is something that can be negotiated between the parties) 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 (also known as the completion date) 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 conveyancers on either side of the transaction, and the parties will not need to physically exchange documents or payment cheques.
If banks are also involved in the transaction, the vendor’s bank will typically discharge their mortgage on settlement and receive any outstanding money, and the purchaser’s incoming bank will register a mortgage over the property and will provide the funds for completion of the property purchase.
Once settlement takes place, the sale proceeds will be paid to the vendor, and the purchaser’s ownership of the land will be registered at NSW Land Registry Services. The conveyancing lawyers of each party will notify the selling agent that the sale has been completed, and the real estate agent will then be able to hand the keys to the buyer.
5. Other considerations when selling your property
If you are selling an investment property, or you are domiciled overaseas, 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 arise because of your sale. Depending on the type of property and how you have used the property in the past, you could be liable for capital gains tax or goods and services tax on the sale of the property.
If you’re thinking of selling your property, the conveyancing 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 several Law Society Accredited Specialists. We’d love to hear from you. Give us a call or submit an enquiry now.
