Buying Residential Property
Buying residential property in the ACT or NSW
You’ve found a house of your dreams, but what happens now?
Buying a home, regardless of whether it is your first, is both exciting and stressful. Engaging an experienced lawyer will assist in simplifying the conveyancing process and minimising your legal and financial risk.
A good lawyer will:
- Explain the contract
- Suggest any necessary alterations to the contract
- Explain how the deposit is to be paid
- Explain the conveyancing process
- Facilitate exchange of the contract
- Liaise with your financial institution
- Facilitate settlement of the transaction
It is a good idea to make contact with a lawyer as soon as you find a property that you’re interested in. Whether you’re intending to purchase at auction or by private treaty, it is important that you have the contract reviewed by an experienced lawyer prior to committing to the transaction.
A housing deposit will ALWAYS be 10% of the purchase price.
However, it is common for vendors to accept payment of the deposit by instalments, most commonly, 5% on exchange and 5% on settlement. Importantly, if you fail to complete the transaction, your legal liability will be the full 10%.
Conveyancing is a two-step process.
The first step is to exchange contracts (along with payment of the deposit) – this creates the binding legal relationship between the vendor and the buyer.
The second step is to settle on the transaction – simply put, this involves payment by the buyer of the balance of the price and in return, the vendor provides the title (and keys) to the buyer.
In the ACT, the “standard” period of time between exchange and settlement is 30 days. The “standard” period of time in NSW however is 42 days.
Naturally, the specific period of time can be altered by agreement between the parties.
Purchasing a home is a huge financial commitment and it is essential that you understand both the potential legal risks associated with conveyancing, and also the property itself.
An experienced solicitor will recognise whether particular clauses are prejudicial, benign or irrelevant and will be able to renegotiate the terms of the transaction if necessary. An experienced solicitor will also have regard to potential issues involving easements, zoning and approvals.