ONLY TRUST THE BEST

JRA Legal and Conveyancing,

Coorumbung Rd,

Broadmeadow, NSW, 2292, 

Phone 0438 879 791,   © 2018

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CONVEYANCING NEWCASTLE - SELLING  A PROPERTY

STEPS TO SELLING YOUR PROPERTY

CONVEYANCING SOLICITOR ORGANISES A CONTRACT OF SALE

The first step when selling a property or house is to contact your conveyancing solicitors and have a Contract for the Sale of Land for that property prepared. As a local conveyancing firm, give us a call, and we can take the information from you over the phone and provide a conveyancing quote. JRA legal Newcastle are lawyers who understand this is a critical time in your life, and we are here to guide you through the process from start to finish. We have the professional experience as conveyancing solicitors to ensure the procedure of selling your home is not stressful and that the conveyance process is smooth and relatively simple. We are solicitors in Newcastle who pride ourselves on providing premium client service. We act for buyers and sellers in residential conveyancing matters. The law states there must be a proposed contract prepared so that a prospective buyer can inspect the contract. A property cannot be placed on the market without the contract. There are hefty fines imposed if caught promoting the sale of a property in any way whatsoever before a contract is prepared.

A contract is a legally binding document and is required to provide specific legal information to a buyer. The Contract details ownership, title details, and the conditions of the sale, and what is included in the sale. It is prepared with all the details, leaving blank the buyers' details and the sale price. Certain specific documents must be attached to the contract; these are specified in law. These documents are called "Prescribed Documents," without these documents attached, a buyer has 14 days from the date of exchange of contracts wherein they can pull out of the contract with no penalty.

The required documents are, A full Title search obtained from the Land Title Office

A zoning certificate Section 149 certificate from your local council

A Sewer mains diagram showing the location of the authorities sewer main

Dealings registered of the property such as covenants (new estates often have these, they set out the building code for the estate).

JRA legal and conveyancing make any required conveyancing searches on your behalf with bodies such as the Newcastle council, Cessnock Council, Maitland Council Lake Macquarie Council, and Port Stephens Council. JRA Legal and conveyancing does not add any additional costs to the fees charged by the relevant authorities. For an estimate of the costs of these searches as set by the Newcastle or Lake Macquarie Council, Hunter Water and the land titles offices.

 

JRA legal and conveyancing make any required conveyancing searches on your behalf with bodies such as the Newcastle council, Cessnock Council, Maitland Council Lake Macquarie Council, and Port Stephens Council. JRA Legal and conveyancing does not add any additional costs to the fees charged by the relevant authorities. For an estimate of the costs of these searches as set by the Newcastle or Lake Macquarie Council, Hunter Water and the land titles offices.

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CONVEYANCING FOR SELLERS, PRESCRIBED WARRANTIES

There are certain warranties that the seller must give as prescribed in law. These “Prescribed Warranties,” and they are, that as the date of the contract: The land is not subject to any adverse affectation, and The land does not contain any part of a sewer main, and the zoning certificate attached to the contract specifies the true status of the land, and there is no matter concerning any building that would justify upgrading or demolition order unless defined otherwise in the contract. There must also be attached to the contract evidence of owner builder warranty insurance, if any building work has been done in the previous six years, the value of which exceeded $12,000.00 up until 1 February 2012 and $20,000.00 from 1 February 2012. Discuss the building works with your conveyancer before putting the property on the market for sale. For more information, please read: the certificates declare information we place in the contract. By law, specific certificates MUST be there, or else it’s an invalid contract. Once the certificates are ordered, a contract will take between 2 - 3 days to prepare, depending on what council area the property is located. The Contract is Emailed To The Real Estate Agent By Us. 

When a potential purchaser decides they are interested in a property, they may make an offer to purchase it. The vendor may accept this offer, or the purchaser and vendor may enter into negotiations over the price and conditions of the sale. These may include what exclusions/inclusions are not included with the sale, such as washer dryer.

ACCEPTING AN OFFER

A Purchaser makes an acceptable offer to purchase the property the Agent issues a sales advice. As your solicitors for selling the property, we will update and complete the contract. The contract is sent to both you and the Purchaser’s Solicitor or licensed Conveyancer for signing. The purchaser prepares for exchange by undertaking inspections, obtaining formal finance approval, and paying the deposit. This process can take up to 14 days.

EXCHANGING OF CONTRACTS

Contracts are signed by all parties involved in the transaction when the seller and buyer have agreed on a price and conditions of sale. The contracts are exchanged and dated, and the deposit paid by the buyer.

 

Contracts are drawn up in duplicate, and the seller signs one copy, and the buyer signs one copy. The exchange of contracts is the exchanging of copies so that each party ends up holding the copy signed by the other party.

The contract will include a significant amount of information, namely:

• The agreed price;

• Settlement date;

• Inclusions (chattels such as oven, dishwashers and any other movable object that the vendor has agreed to leave behind, etc.);

• Zoning restrictions;

• Caveats;

• Easements – such as utility plans;

• Sewer and drainage diagram; and

• Any special considerations (e.g., purchase subject to finance approval).

 

The contract can be exchanged in one of two ways:

Exchange of contract by the real estate agents. In this case, the contracts are signed and exchanged after the sale price has been agreed to. The agents will send the appropriate copy of the contract to the parties conveyancers, and the buyer will have a five working day cooling-off period in which to get any reports, finance approval and have the contract explained by their conveyancer. The seller does not have the benefit of the cooling-off period. It is usual practice for the buyer to waive the cooling-off rights, so the contract is binding on both parties as and from the date of the exchange taking place.

 

Until the contracts are exchanged, either party can withdraw from the transaction. When contracts are exchanged, both parties are bound to proceed. In the case of the buyer having a cooling-off period, the buyer is not bound until the cooling-off period expires.

COOLING-OFF PERIOD

Every contract for the sale of residential property (less than 2.5 hectares) has a cooling-off period of five working days. The cooling-off period ends at 5.00 pm on the fifth working day. The purchaser has five working days in which to “cool off”. The seller is locked into the contract and cannot withdraw from the sale. If the purchaser finds that for any reason they do not want to proceed with the purchase, they can rescind the contract within the five days. If they do rescind the contract they forfeit to the vendor, 0.25% of the sale price. The contract is then at an end, and neither party has any further claim against the other.

 

The purchaser can waive the cooling-off period by having the contract explained by a conveyancer or solicitor and a certificate signed by that conveyancer or solicitor and the certificate handed to the seller’s conveyancer. The certificate is drawn under Section 66W of the Conveyancing Act and is commonly called a “Section 66W certificate”. The cooling-off period can be shortened by the use of the S66W certificate whereby the purchaser has agreed to do so.

 

There is no cooling-off period if the property sells at public auction, or on the same day, it's listed for auction sale. Most of the time, contracts are exchanged after the purchaser has completed their inspections and have finance approved. There are times when a purchaser will sign a contract then undertake finance approval and inspections. The contract may be subject to a Cooling-off Period after exchange which is usually five business days. During the Cooling-off period, the purchaser has the right to change their mind about purchasing the property. They may withdraw/pull out/rescind from the contract. If they do, they forfeit/lose the deposit of 0.25% of the purchase price which you receive as compensation.

The second option is for the purchaser to waive their cooling-off period. Delays in exchanging the contract may occur as the purchaser will carry out pre-exchange inspections and obtain unconditional finance. They will then submit their signed contract for exchange. Vendors/Sellers are NOT entitled to a Cooling-off Period. Once Contracts are exchanged, a Vendor is bound by the contract to sell the property to the purchaser.

DISCHARGE OF MORTGAGE

If you owe money to a lender who has a registered mortgage, then you will need to have the mortgage discharged at settlement. Your conveyancer will communicate with the mortgagee requesting they have the discharge of mortgage prepared in readiness for settlement. Most lenders will not do anything until they have your written authority to prepare the discharge. This authority gives the lender permission to communicate with your conveyancer, in regards to the amount required to pay out your loan.

 

Your conveyancer will try and organise for the lender to send the authority form to you. Sometimes this can hold up the final settlement, and you are advised to contact your lender to organise this yourself. The fixed payout figure will be given to your conveyancer and the loan will be paid out from the proceeds of your sale.

BUILDING INSURANCE

All buildings on the property are at the sellers' risk until settlement. It is therefore essential that all building insurances be maintained right up until settlement. If the buildings are damaged by fire, flood other catastrophes, the buyer is not bound by the contract to proceed with the purchase. Depending on the damage, a buyer may proceed with the purchase after negotiating the price down to cover the repairs. Still, it is in the sellers' best interest to keep the buildings insured. If your policy is due before settlement, it is advisable to renew the policy and then claim a rebate when possible after settlement. It is better to be sure than sorry.

SOLD WITH VACANT POSSESSION, TENANT IN POSSESSION

Tenants are not bound to move out of the property until the lease has expired. A notice to vacate must be served to the tenants. If selling a property that is tenanted, you must confirm that the term of the lease has or will expire before the settlement date. You must give 30 days' notice to vacate to the tenant. As the settlement date usually is 28-42 days after exchange of contracts, you must arrange with your conveyancer and your managing agent to give the notice immediately contract are exchanged. It is either you as the landlord or your managing estate agent who must give the notice to the tenant. Your conveyancer cannot provide the notice. They will check to see the notice has been served.

CONVEYANCING FOR SELLERS

COUNCIL RATES, WATER RATES, AND STRATA LEVIES

Council Rates

Council rates get adjusted between the vendor and purchaser as at the settlement date. Council rates are levied for the financial year. They will be adjusted so that the vendor pays the rates up until the day of settlement and the purchaser will be liable from then until the end of the rating period, which may be the 30 June or the end of the current quarter. They are adjusted as if the rates are paid in full, whether they are or not. Any outstanding rates are paid from the sale proceeds (being the vendor’s money).

 

The rates are a charge on the land, and any outstanding rates become the liability of the purchaser, so they must be paid up to date at settlement. One of the certificates the purchaser’s conveyancer obtains is from the council and sets out the amount of the annual rates. It shows what payments have been made, and what is outstanding.

 

Water Rates

In some country areas, the water rates are paid to the council and may be included with the council rates. In other areas where a separate water authority supplies the water and sewer, the adjustment of these rates is made at settlement.

Water rates are usually quarterly rates and the adjustment made will only be for the current quarter. The same principals apply to water rates as they do for council rates. A water usage charge may have to be paid by the vendor. To asses, whether a fee is payable or not can be done in one of two ways. A meter reading can be arranged if needed, or an estimate can be done, by using the last quarter’s water usage charge. It is usual to use the estimate system to calculate the usage charge because quite often the cost of having the meter read is more than the charge itself. The seller will make an allowance to the purchaser for the usage charge so that when the actual bill for water usage is received, the whole bill becomes the purchaser’s responsibility.

 

Strata Levies – Unit, Townhouse, Villa

If you are purchasing a lot in a strata scheme, the quarterly strata levy will need to be adjusted. This levy is adjusted in the same manner as council rates except that they get adjusted on the quarterly, not the annual rate. The quarter for strata levies may begin at any time. They are not necessarily the quarters of the calendar year. Because the levies commenced on a date determined at the first annual general meeting held by the Owners Corporation, the quarterly levies can begin at any date. For convenience, it is usually but not necessarily from the beginning of a month. There may also be special levies to take into consideration. A special levy is struck when there are not enough funds held by the owners' corporation. These are to cover either the ordinary running expenses, or a specific job that has to be carried out, and there are not enough funds held to cover the cost of that job. 

A special levy struck before the date of the contract has to be paid in full by the seller. Some times the special levy may be paid by instalments, if this is the case, all the instalments must are paid by the seller. If a special levy is struck after the date of the contract, then the levy is adjusted between seller and buyer.

CONVEYANCING  FOR SELLERS - PROPERTY SETTLEMENT

If the property is sold with vacant possession, then you need to make arrangements to vacate the premises before or by the time of settlement. The property should be in a clean and tidy condition, and all possessions moved from the property. It is not always easy to arrange for removalists etc. to have you moved out before the settlement time. Still, you should be advised that the buyer does not have to settle if you have not left the property vacant by the settlement time. If need be, and you are able, you might consider moving out the day before settlement but remember that you are still liable for insurance and the safety of the premises until settlement takes place.

 

If you are selling and buying simultaneously, you may have to arrange to have left the sale property and to be en-route to the property you are buying while the settlement takes place. If this is the case, make sure you are available in case something goes wrong, or there is a hold up in the settlement.

SOLD WITH AN EXISTING TENANT

If there is a tenant who is staying after settlement, an adjustment of the rents will be made at settlement. If the rent is paid in advance, then you will make an allowance in the settlement figures to credit the new owner with that part of the rent that applies after the settlement date. If the rents are in arrears no adjustment in your favour is made as the new owner is not expected to take over a debt that is owed to you. Quite often the managing agent may be holding rent in trust as they may collect rent weekly but account to the owner monthly. If this is the case, the adjustment of rent will be made by the managing agent. Your conveyancer will determine how and what adjustments are to be made.

AFTER SETTLEMENT

When settlement has been completed your conveyancer will account for the proceeds. They will make all adjustments, repay loans and transfer the balance to you. The change of ownership details is sent to Council, Water Authority and the Valuer-General. Documents are lodged for registration with the Land Titles Office following settlement. This may not happen for a couple of weeks if you receive either the council or water assessments for the property you should redirect them back to the new owners or your conveyancer. Please do not throw them away as the new owner may then have the interest to pay on late payments of rates they never received.

 

JRA are experienced specialists in property law, we provide premium conveyancing services. Thinking about our clients' needs are first and foremost, we cover all aspects that may arise in a sale. We act quickly and smoothly, communicating with you through the whole transferring process. We aim to make this a stress free process, so you can plan what to do today.

SUMMARY CONVEYANCING FOR SELLERS

In summary, the conveyancing process of selling a property can be simplified into the following steps.

Marketing Contract is prepared by JRA Legal & Conveyancing and sent to the agent so that marketing of the property can commence.

The vendor accepts an offer and JRA Legal & Conveyancing receive sales advice from the agent.

JRA Legal negotiate terms of contract, issue the contract to the Purchasers solicitor and arrange for the Vendor to sign the contract.

The purchaser pays the deposit to the agent and exchange of Contracts takes place.

JRA Legal & Conveyancing will reply to purchaser’s requisitions, contact Vendor’s bank to arrange a discharge of mortgage, arrange for Vendor to sign a Transfer. JRA Legal & Conveyancing receive and check settlement figures, advise the purchaser of cheques required for settlement, book settlement time with Purchaser and Vendor’s bank.

JRA Legal & Conveyancing attend settlement – receive settlement money and account to Vendor sale proceeds, payout mortgage, authorise the agent to release the deposit to the Vendor, settlement correspondence issued to Vendor.

 

Congratulate our clients on their sales.