Buying residential real estate can be a very exciting process, however it can also be a confusing time for the prospective buyer.  As you may already be aware, different agencies usually have different procedures, wo we would like to inform you of the buying process should you decide to purchase a property through Solutions in Real Estate.

Making the decision to secure or make an offer on one of our listed properties, we will ask you to confirm the following details, enabling us to help you in the best possible way.

1.  The actual purchase price you will be paying for the property

2. The method by which you choose to pay the 10% deposit.  Eg; cheque/bond/other

3. The settlement period you require.

4. The name of your chosen Solicitor or Conveyancer.

5.  Any special conditions or requests that you may have so that we can inform the vendor (property owner).

Once we have the above information, we are in a position to arrange a meeting with the vendor.

Property owners receive all type of interest - some genuine, some not.  Some people submit offers to test the possibility of sale, but do not actually stay true with their offer.  This can lead to frustration and concern for the owners as they try to assess who is actually a genuine buyer.  The best way to present a strong offer on any property is to utilise your purchasing option of the 5 day cooling off period available in all NSW property contracts of sale.

The cooling off period is only available to the purchaser and allows for an offer to be submitted to the owner in writing, on the Contract of Sale.  This clearly demonstrates to the vendor that you are serious about your offer.

Once an greement of price, settlement, conditions etc has been reached with the vendor, the sale can proceed.  An exchange of contracts is the only way to actually buy or sell a property.  The exchange of contract occurs when the purchaser & the vendor each sign an identical copy of the propsoed contract for sale of the land, that land having a title.  (The property on the land, being houses, townhouses etc., are known as improvements to the subject land).  The exchange of contracts can be made according to terms under either one of the following options.

Option One - Unconditional Exchange

This means the purchaser's solicitor has signed a 66W certificate.  This certifcate will waive any cooling-off period and automatically creates a legally binding relationship between the purchaser and vendor.  There is no turning back.  This option also applies when a purchaser is the successful bidder at auction (where contracts are unconditionally exchanged).

Option Two - Exchange of Contracts

As sales agents, we can only exchange contracts with a cooling off period.  The cooling off period lasts for 5 working days and allows the purchaser the right to rescind the Contract for Sale for any reason, ie, change their mind.  This period commences upon exchange and terminates in NSW on the fifth working day at 5pm.  Remember that Saturday and Sunday, along with bank and public holidays, are not business days.  The vendor may extend this period by a clause in the contract or by notice in writing given before the endof the period.  The cooling-off period is created to allow the purchaser time to organise inspections & reports and to allow their legal representative to check the contract.  If you are wishing to purchase a home, it is important that you understand the commitment  level required by both the vendor and purchaser.

Cooling Off - Facts & Benefits

The signing of a 5 day cool-off period is a great way to purchase.  This method provides full protection against:

• the vendor pulling out of the sale
• another purchaser paying more for the property
• any governement body wishing to purchase the property.

With the contract exchanged, the purchaser has total control and time to ensure that everything is to their liking.  However, this protective method requires commitment by the purchaser on rescission forfeits 0.25% of the purchase price ($250 in $100,000).  This money is paid directly to the vendor.  If not, the vendor has the right for recovery of the 0.25% purchase price as a debt, where either no deposit has been paid or the amount of the deposit was insufficient.  Neither party has any further claim against the other, except where the purchaser may have taken possession.

In some cases, a purchaser does not wish to sign anything without their solicitor's approval.  If this is the decision, Solutions will issue the potential buyer with what is known as a "Sales Advice". 

This contains all the relevant details of the sale.  Your solicitor will then make contact with the vendors solicitor and proceed with reports and reading of contracts with no determined time frame for exchange.

It is important to note that whilst this is taking place, the property will remain on the market, and anybody wishing to make an offer can do so.  Note: it is a legal requirement that every offer made must be presented to the vendor.  Although you may be a day or two ahead with you solicitor, any other interested party is able to sign the contract for sale with a cooling off period as specified in option two.  The property is then secured, leaving you no option to purchase.  Your solicitor is powerless to act, as contracts are exchanged and in the case of a cool off, this can be carried out be either the agent or the vendors solicitor.  Although some solicitor's may not want you to purchase under a cool-off period, it is the only way to actually secure a property (other than option one), allowing for time to conduct the necessary research.

1. General Tips

If you want to make an offer, be certain that you can follow through by having the following items confirmed

• A preapproval of finance from your bank or leading institution.
• your own property sold, or at least assessed for value and possible sale time.
• you have a solicitor or conveyancer selected.
• determine how you will be paying the 10% deposit and associated costs
• an idea of settlement times required before you take possession.

2. Building & Pest Reports

Before you purchase the property - in particular a new home - it is important that you receive a copy of a pest and building report froma qualified inspecotor.  Please note that this report is a complete list of defects of the home.  The point to remember here is that all homes at one time or another require maintenance, and that is known as a capital improvement or maintenance on the property.

3. Bank Valuations

Don't be alarmed if your bank or lending institution request a valuation by a registered property valuer.  This is normal practice of lending insitutions, and serves as confirmation of the agreed sale price.

4. Buying at Auction

If you are intenting to buy at Auction, all of the above mentioned must be in place.  Auction day is final.  If you turn up to bid and you are the highest bidder over the reserve price you are the instant owner awaiting settlement of that property.

Summary

Preperation is the key.  Understand your righs and have verything in place.  If you follow the advice in this document, along with that of your solicotr and your Solutions agent, you will be on your way to securing the right home for you.  Whether you are considering purchasing property in the near future, or are currently in the process of buying a home through another company and are in need of advice, please feel free to call any of the Solutions sales consultants with any qu3stions that you may have.  They will be happy to assist.