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Selling Residential Property

This article discussed selling residential property, including whether you need a lawyer, the process involved and what happens if the contract is breached.

Do I need a lawyer when selling a residential property?

You are not required to use a lawyer when selling a residential property. However, using a conveyancing lawyer to conduct the sale of a residential property is very helpful. A property and conveyancing lawyer will draft an effective contract of sale, negotiate with potential purchasers, resolve disputes between the parties, conduct the necessary investigations, exchange contracts and conduct the settlement. Using a lawyer helps alleviate the stress that is often associated with selling a property, by keeping you well informed, obtaining the necessary documents in a timely fashion, averting problems through negotiation with the other party and ensuring that the process runs smoothly.

The Process of Selling a Residential Property

The process of selling a residential property typically takes 6 weeks to complete, but this length can be shortened or extended if both parties agree. There are four main stages of the conveyancing process.

Drafting a Contract of Sale

If you intend to sell a residential property in NSW, a contract of sale must be available to prospective buyers of the property.  This means that you will need to have a contract of sale prior to advertising the property. A property and conveyancing lawyer can assist you in drafting an effective contract of sale that is tailored to your circumstances and instructions.

Your contract of sale must include certain information such as a title search which confirms ownership of the property, a zoning certificate obtained from the local council and evidence of any easements or covenants on the property.  There may be other documents required in the drafting of the contract of sale. An experienced property lawyer will advise you and obtain these documents for you.

When drafting the contract, you can also instruct your lawyer to include special conditions in the contract, such as a longer than usual period of time to settlement.

Marketing the Residential Property

Once you have prepared a contract of sale you will have the choice as to whether you intend to sell your residential property by negotiation or by auction. Once this decision is made the property will be marketed and will become available to prospective purchasers.

A purchaser may want to inspect the property for building defects or pests or negotiate the terms of the contract.  A property and conveyancing lawyer can assist you with these negotiations.

Exchange of Contracts

Once you have found a buyer for the residential property, the parties to the transaction will need to sign and date the relevant contracts for the sale of the property. At this point the deposit will also become payable and each party will hold copies of the contract. The deposit that must be paid on a residential property is typically 10% of the purchase price.  This price may be reduced if both parties agree.

It is important to note that once you sign the contract both you and the buyer will be bound to the contract’s terms and conditions. The purchaser of the property will have certain temporary rights during what is known as a cooling off period which is 5 working days. During this period the purchaser can withdraw from the contract without penalty.

After the exchange of contracts, a purchaser prepares to pay the full purchase price on the settlement date.  Most purchasers make a final inspection of the property just prior to settlement to ensure that it has not been damaged or changed.

Settlement

Settlement is the final step in the conveyancing process.  Upon settlement you will transfer the ownership of the residential property to the purchaser.  It is now common for settlements to be completed electronically. A conveyancing lawyer can organise a simultaneous settlement, where the sale and purchase of property occur at the same time.

The lawyer then lodges the relevant documentation relating to the transfer of property in the NSW Land Registry Services.

Selling a Residential Property at Auction

Selling a residential property at auction is different to selling a residential property by private treaty.  An auction allows for potential buyers to bid on the property and allows the property to be sold to the highest bidder.  When a residential property is sold at auction, there is no cooling off period for the purchaser and no changes to the contract of sale can be made after the property is sold.

What can I do if the contract has been breached?

Brander Smith McKnight’s expert property lawyers can provide you with assistance in relation to circumstances where a party has breached a contract for the sale of property prior to settlement.

Our lawyers can assist you with resolving a dispute and enforcing the contract through alternative dispute resolution. Resolving a dispute arising from a breach of contract outside of court can save both parties money and time.

Alternatively, our lawyers can commence legal proceedings against a party who has breached a contract and seek either compensation for the breach or seek to have the contract performed.

Why BSM Lawyers?

We have highly experienced property and conveyancing lawyers who provide you with an efficient and inexpensive service.  Our property and conveyancing lawyers understand the anxiety and stress that is associated with selling residential property and work hard to alleviate this stress by keeping you well informed throughout your property matter and explaining each stage of your property matter in clear and simple english.

Our lawyers are experienced with various kinds of title including Torrens and Old System title.

We provide a fixed fee professional conveyancing service provided by lawyers. We do not use conveyancers at any stage of the conveyance.

FAQs

chevronWhy should I have a lawyer draft the contract of sale for a residential property?

If you intend to sell a residential property in NSW, a contract of sale must be available to prospective buyers of the property. Having this contract of sale drafted by a property and conveyancing lawyer ensures that it complies with legal requirements and minimises the chances of problems arising in the future. A conveyancing lawyer will also draft a contract that is tailored to your specific circumstances and instructions.

chevronShould I use a conveyancer or a lawyer when selling a residential property?

Lawyers and conveyancers are not the same.

A property lawyer not only conducts the entire conveyancing, they are also able to identify and assist with other legal issues. For example, a property lawyers can also provide you with commercial and contract law advice and assistance.  A lawyer can identify other legal issues outside of the area of property law if they arise in your matter and provide you with advice and assistance accordingly. Knowing that a property lawyer can handle potentially complex legal issues provides a level of confidence not found in a conveyancer.

A conveyancer is only permitted to practice and assist people with conveyancing. As such, conveyancers only specialise in the sale, purchase, transfer and leasing of property. They are unable to provide advice regarding legal issues outside of conveyancing.

At Brander Smith McKnight we do not use conveyancers. We suggest that you consider using a lawyer to assist you in selling a residential property.

chevronWhat if the residential property I am selling has been substantially damaged after the contracts are signed?

Prior to settlement a purchaser may make a final inspection of the residential property. If during this inspection the purchaser finds the property to be substantially damaged they can withdraw from the contract without penalty. Alternatively, where there has been minor damage to the property, the purchaser may negotiate the adjustment of the purchase price of the property.  The experienced lawyers at BSM Law can assist you with this.

chevronCan I sell my residential property myself?

Yes, you are not required to use a lawyer or conveyancer when selling a residential property. However, using a conveyancing lawyer to sell a residential property has many benefits. An experienced lawyer will draft an effective contract of sale, negotiate with potential purchasers and help you organise the settlement.

chevronHow much will it cost to have a lawyer help me sell a residential property?

Brander Smith McKnight’s conveyancing lawyers provide a very competitive fixed fee professional conveyancing service.  Our lawyers are committed to providing our clients with clear descriptions regarding the cost of our services.

chevronWhat is a cooling off period?

In NSW, a cooling off period is the period of time that commences after the exchange of contracts during which the purchaser can rescind their contract for the purchase of a property.  That is, change their mind and not be financially penalised. This period is 5 working days.

chevronWhat if either of the parties cannot settle on time?

If either party cannot settle on time, they will request an extension of time.  No party is guaranteed an extension of time.  It is best to avoid not settling on time by setting an appropriate date of settlement in your contract.  BSM Lawyers can assist with this negotiation.

chevronCan I sell a residential property that has not been built yet?

Yes, where a property is sold to a purchaser prior to being built it is a known as ‘buying off-the-plan’.  Where a property is sold off-the-plan prospective buyers can review the properties plans, schedules and perhaps visit developments that have been completed by the same developer.

chevronIf I have a dispute with the purchaser, do I need to go to court?

If a property dispute arises during the process of conveyancing, BSM’s experienced lawyers can assist you in resolving the dispute.  Our expert conveyancing lawyers resolve the vast majority of property disputes without the need for expensive and time-consuming litigation.  We have the expertise to achieve excellent results using alternative dispute resolution.

chevronDoes the residential property need to be vacant upon settlement?

Yes, the residential property will need to be vacant upon settlement.

Brander Smith McKnight has offices conveniently located in Sutherland, Parramatta, Wollongong and Sydney CBD.

 

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