If you are ready to buy a property, you should first seek pre-approval from a Financial Institution so that you have an idea as to how much you can afford to pay.
Once you have pre-approval or know how much you can afford, it is time to start looking around for your new place. If you find a place you like, you make an offer (through the Agent). Even if the Vendor accepts your offer, there is no legally binding contract in New South Wales until each party has signed a Contract for Sale of Land, exchanged Contracts and the Purchaser has paid the Deposit. It is recommended that you seek advice from a Solicitor before signing a Contract (even if you are given a cooling off period of five business days in which to pull out of the Contract). The reason for this is so that you do not lose your bargaining power in negotiating amendments which may be recommended to protect your interests under the Contract. While Agents will urge you to sign a Contract with the cooling off period, if you subsequently change your mind during the cooling off period for example due to problems being discovered in a Building / Pest or Strata Inspection Report, you will lose your initial deposit of 0.025% of the Deposit of the Purchase Price – i.e. this amount is forfeited to the Vendor if you pull out of the Contract before the cooling off period expires.
If a property is listed for auction, you still are able to have your solicitor negotiate amendments to be agreed to be made to the Contract in the event that you are the successful bidder at the auction. It is therefore important that you seek legal advice in relation to the Contract as soon as possible prior to the auction. It is generally recommended that you arrange a Building and Pest Inspection of the property prior to the auction/exchange of contracts. Rockliffs Solicitors are able to provide you with a list of Building and Pest Inspectors which our clients have used in the past to assist you. If you are buying an apartment/strata property including a townhouse, Rockliffs Lawyers recommend that you make an appointment to inspect the Strata Records held with the Strata Manager. Alternatively, Rockliffs Lawyers can arrange a Strata Inspection Report on your behalf.
Once negotiations regarding amendments to the Contract have concluded, inspections have been carried out and are satisfactory to you and you have unconditional approval in writing from the bank or financial institution assisting you to purchase the property, you are ready to exchange Contracts. The effect of this exchange of Contracts is that you are now legally bound to purchase the property (in other words, you can’t change your mind and “pull out”).
Settlement (completion of the purchase of the property) is generally six weeks after the date of exchange of Contracts however this can be negotiated by agreement between the parties to be earlier or later (subject to your bank being able to comply with the proposed completion date).