Just as you want to cover all your legal bases when buying a home, you want to do the same when selling a home. The difference between doing your research and not could cost you in the final outcome. Fred Kalouche & Associates is proud to help sellers on this significant journey.
You can sell your home in two main ways in NSW: through a private treaty or at auction. Depending on the advice and recommendation by your real estate agent, you may opt for the path that best suits your circumstances. If your home is listed for sale by auction, potential buyers will gather on-site on a set day to bid for your home. The highest bidder wins. One of the main differences between the two sale methods, apart from the way it is negotiated, is the cooling-off period. Auction sales are final and binding when the hammer lands, whereas private treaty sales generally include a five-day cooling-off period, during which the prospective buyer will usually conduct their pre-purchase property inspections, and may withdraw from the sale if they so choose. However, sometimes you can request the buyer waives this period by having their solicitor or conveyancer provide you with a signed section 66W certificate. When selling through a real estate agent, you’ll generally have to pay commission. Said agents must provide you with a written guide to their fees, including commissions and other expenses, before you sign an agreement with them. Your lawyer can review this agreement if you’re unsure.
Regardless of which sale method you choose, a contract for sale must be prepared prior to putting the house on the market – a requirement of the Conveyancing Act NSW. According to the Vendor Disclosure Requirements, the contract for sale must include all information related to the property, as well as warranties on it.
It is compulsory the following documents are included in the contract for sale:
- Zoning certificate, showing the planning of the area that may affect the property;
- Drainage diagram, showing the location of the sewer lines and sewer mains;
- Certificate of title that confirms you are the property owner; and
- Any easements, restrictions, and rights of way that may affect the property.
When selling an apartment unit – a strata title property – you must also include:
- Property certificate for the lot and common property;
- Strata plan that shows the lot;
- Any change of by-law that affects the use of the common property;
- Strata manager’s details on the front page of the contract; and
- In some cases, additional documents, such as a building certificate.
The best way to find out what you should include in the contract is to speak with your solicitor.
A contract for sale generally contains many standard terms, not all of which will apply to your property. Your solicitor will ensure the terms used are in your best interests. By the same token, know that the buyer’s solicitor will often negotiate the terms so that they best reflect the buyer’s interests, however, your solicitor will work with theirs to reach a fair middle ground. Homes are sold “as is”, meaning all the fixtures – permanent items that can’t be removed without damaging the property – are included in the sale. You can note items you don’t want included in the sale in the contract.
Both the seller and buyer must sign and date a copy of the contract for sale once it is agreed to. You’re not bound to sell the property until the contracts are exchanged – a process that, if you sell at auction, occurs after you accept the highest bid. With the exchanging of contracts, the buyer is required to pay a 10% deposit. Either your solicitor or your real estate agent will invest the deposit in an interest-bearing trust account, and the interest earned will be divided between you and the buyer once the sale is finalised. If you sell a property bought after 1985 in NSW, you may have to pay Capital Gain Tax (CGT). It would be wise to obtain accounting advices as to any taxation implications before selling.
The property will settle on the date nominated in the contract for sale; generally six weeks (42 days) after the exchange of contracts, but any timeframe you wish. It’s on the settlement date you hand the property to the buyer and they pay the amount owning to you, including all taxes, fees and rates/levies. If you have a mortgage on the property, your solicitor will arrange for the buyer to pay your bank the appropriate amount to release it from your lender. The buyer then becomes the new homeowner.
If the buyer wishes to occupy the property before the settlement date, you can create a license agreement that runs until this date. An occupation fee is payable by the buyer, and they will need to take out homeowner insurance on the property to cover them. You can also change to an earlier settlement date – something our solicitors can help you with.
The Fred Kalouche & Associates team is here to help guide you through the sometimes-daunting process of selling your home. Contact us on (02) 8062 6300 for an obligation free discussion.