BUYER'S GUIDE

TJS Agency easy step-by-step guide to the buying process.

How do you make an offer?
Talk to us and we’ll discuss your offer with the seller

What sort of offer should you make?
In most cases it is expected that there will be some negotiation, but your offer should be realistic – given the market at the time. Remember that you will be competing with other buyers, so your best chance of securing the property you want is to make an offer that’s as close as possible to the asking price.

What do the Terms and Conditions mean?
The contract of sale sets out the terms and conditions of the sale, such as inclusions and exclusions, term of settlement, deposit due and other particulars of the property.

What are Inclusions and Exclusions?
Inclusions are items that come with the purchase of the property when you buy it. For example… fixed floor coverings, blinds or light fittings.Exclusions are items that don’t come with the purchase of the property. At times may be things like…. a dishwasher or gas heater.

Signing Contracts

Is it off the market now?
No, when you sign your copy of the contract to buy the property you have chosen this simply indicates your interest in buying. Until the actual exchange of contracts has occurred, the property you have chosen is still on the market and available for anyone to buy.

Under current legislation, the most sensible way to secure the property of your choice is to exchange contracts as quickly as possible. This is generally best achieved by allowing our agency to conduct the exchange of contracts.

Should your solicitor or conveyancer review the contract?
It’s not a legal requirement, but many buyers find it helpful.

Are both contracts the same?
Yes, and once we have two identical signed contracts, one signed by you- the buyer, and one signed by the seller; we can then exchange the contracts by firstly checking and dating them.

Exchanging Contracts

What does it mean?
There are two identical copies of the contract – one for you and one for the seller. You each sign your copy of the contract. Once you have paid your deposit, the contracts are then dated and ‘exchanged’ or swapped. Only when both the seller and the buyer have signed the contracts and exchanged copies do you both become legally bound by the contract.

What does exchanging contracts mean?
An agreed price is negotiated between buyer and seller. It means that both of you agree on the sale price and what’s in the contract.

Both sign identical copies of the contract. Contracts are then dated, and then simply swapped or ‘exchanged’ and each party’s solicitor or conveyancer is given a copy of the signed contract. (Vendor’s solicitor receives the purchaser’s copy and purchaser’s solicitor receives the vendor’s copy)

When does it happen?
It happens once the seller has accepted your offer, and you and the seller have signed contracts, and the seller has agreed to take the property off the market.

Cooling-Off Period

What is it?
With the exception of Auctions, is a legal requirement that Real Estate agents in NSW can exchange contracts with a Cooling-Off Period. It entitles you, the buyer, to withdraw from a purchase within 5 business days after the contracts are exchanged.

However, if you do not wish to continue with the purchase, you must provide a written notice called a ‘Rescission Notice’, and you will forfeit 0.25% of the purchase price from the deposit you have paid that goes to the seller.

When does it happen?
It comes into effect straight after the exchange of contracts, with the 5 days beginning on the next business day after the date of exchange. (Excludes public holidays and weekends)

What happens afterwards?
Assuming you do not change your mind during the 5-day Cooling-Off Period, you can start to plan for the settlement.

With Auctions…
Because there is no Cooling-Off Period, the sale becomes unconditional as soon as you exchange contracts on Auction day.

Section 66w Certificate- Exchange

What is it?
It is a certificate which is signed by the buyer’s solicitor or conveyancer, which waives your right to the usual Cooling-Off period. Typically, it is requested by the seller when they want a quick settlement or a firm sale.

When does it happen?
Usually it is whenever the exchange of contracts is conducted by a solicitor or conveyancer– rather than a real estate agent.

What happens afterwards?
Once your solicitor or conveyancer has signed it and contracts have exchanged, the sale becomes unconditional.

Solicitors’ Exchange

What is it?
When the exchange of contracts takes place through our agency the standard Cooling-Off Period usually applies. When it is handled by solicitors or conveyancers, it usually involves a Section 66w Certificate (see above).

What happens then?
The buyer’s solicitor or conveyancer hands over a Section 66w Certificate and the 10% deposit to the seller’s solicitor or conveyancer and the Cooling-Off Period is effectively waived. Then the sale becomes unconditional – meaning that both parties are legally bound to proceed with the sale.

From Unconditional Exchange to Settlement

What is an Unconditional Exchange?
The point at which the contract becomes legally binding for both parties- the buyer and the seller.If it is an real estate agent’s exchange, it’s when the Cooling-Off period has expired.

When does it happen?
Usualy after 5pm on the last day of the Cooling-Off Period– which is also when the you- the buyer pays the balance of your deposit. (If it’s an Auction or Express Sale, it automatically becomes unconditional as soon as the exchange of contracts occurs.)

Property Inspections & Bank Valuations

What are they?

Inspections are done by experts to check for possible problems with the property; pests such as termites; structural problems such as, subsidence; rot or damp; and the general condition of the property.

Bank Valuations may be required by your lender, to check the property’s worth as a security against your loan.

When do the Inspections happen?
As soon as possible when you have found a property you like, and contracts have exchanged your solicitor or conveyancer will order them for you, unless you request for them to be carried out first, prior to exchange of contracts.

What happens afterwards?
Once you’re happy there are no problems the purchase can proceed. But if anything does concern you, let us know straight away.

Can I get my deposit back if the Inspections show major problems?
No, not after you’ve exchanged contracts. So it’s wise to get them done as soon as possible.

What if the Bank Valuation is too low?
If you have time, you can approach another finance lender to obtain finance. You can use the Cooling-Off Period to withdraw from the purchase, or you may decide that the property is still a good buy. Either way, you can discuss it with us and we’ll see if we can help.

What happens next?
Not a lot will happen until a few weeks before settlement. You should arrange building insurance and start to plan for the final inspection and settlement.

When and what is Settlement?
Settlement is the completion of the sale, when the buyer pays the balance of the purchase price – usually (but not always) six weeks after the exchange of contracts. Adjustments are made for water and council rates and strata levies if applicable (for units, villas, townhouses or duplexes), and the seller pays out any outstanding mortgage. The Buyer then become the legal owner and takes possession of the property.

What is a Final Inspection?
This is an inspection that a buyer carries out on a property they are buying to confirm that the property is exactly as they agreed to buy it.

When is the Final Inspection?
It is usually a few days or the day before settlement, but can be earlier if the seller agrees. This should be booked in with us, at least 7 days in advance to give the seller enough time to prepare.

When can I move in?
You can collect the keys from us and move in the day that settlement has occurred.However, organising the move into a property on settlement day itself can sometimes be difficult, as there may be last minute issues which delay settlement by hours or even days.The best plan if possible is not to move in on the day that settlement occurs.

When do I start getting the rent, if I buy an investment property?
If the property is currently leased, the rent becomes yours from the date of settlement.

What happens to the deposit you pay?
The deposit will either be held by our real estate agency in our trust account at the bank, in the seller’s solicitor’s trust account or if agreed released to the seller for payment for a deposit when buying another property.

Does my deposit earn interest in the Trust Account?
If the deposit is to remain in our trust account until settlement an real estate agent’s trust account is not allowed to earn any interest. Sometimes solicitors or conveyancers instruct us to pay the deposit into an interest bearing account until settlement takes place.

How much deposit do you pay when you exchange contracts with a Cooling off Period?
The deposit is usually paid in two parts. The initial deposit 0.25% of the purchase price and the balance of usually 10% deposit of the purchase price (less the initial deposit already paid) payable prior to 5pm when the Cooling off Period finishes.

How much deposit do you pay when you exchange contract with a Section 66w Certificate?
Usually 10% paid unless otherwise negotiated with the seller for a lesser amount.The full deposit must be paid prior to contracts exchanging.

Gazumping what does it mean?
Gazumping is when you have negotiated a price for a property that is accepted by the seller – but before contracts are exchanged, another buyer makes a higher offer or offers better terms, which the seller accepts. It can also occur when a seller has competing buyers and raises the price.Being ‘gazumped’ can be disappointing, especially if you have incurred costs for inspections etc. But it is not illegal.

Finance

We can you save thousands of dollars on your next mortgage?
Banks change their interest rates so frequently, and there are so many terms, conditions and extra costs, that it’s hard to know who’s offering the best value. Although you can change lenders, it’s not that easy to move your loan once you’ve signed up.

This is why we recommend talking to Patrick from Mortgage World first. Using specialised computer software, he will look at home loans from over 100 banks and other lending institutions and see what’s the best value straight away.

Even better, there’s no cost to you because he receives his fee from the selected lender. You have nothing to lose and everything to gain, so give us a call to arrange an obligation-free consultation before you start looking for your dream property.