HELPING YOU UNDERSTAND THE PROCESS OF SELLING
I want to sell my property what do I have to do?
Prior to any agent showing your property to prospective purchasers, or advertising it online and/or by any other means, the Law requires that they hold a valid contract for sale.
How long does it take for Meehans to prepare a contract for sale?
In most cases Meehans can prepare a contract for sale within forty-eight (48) hours of receiving instructions. The turnaround time is dependent on a variety of factors including the local council that the property is located in, and the improvements at the property including the inclusion of a swimming pool and/or spa.
We recommend you provide us with instructions to prepare the contract for sale as soon as possible to avoid any delays.
What needs to go into the contract of sale?
A Contract consists of a number of searches and certificates which show the owner, the boundaries, the zoning and any easements or restrictions on title.
Other things required to go into the Contract include:
- Home Owners Warranty Insurance for any building work done on the property after May 1997 values at more that $5,000.00 up until 30th June 2002 and any work carried out above $12,000.00 after 1 July 2002;
- A copy of the Residential Tenancy Agreement if you have a tenant;
- Special conditions drafted specifically to protect your interests.
What happens once a purchaser is found?
Once a purchaser is found there are two ways that the matter can proceed:-
- We exchange Contracts (also known as a solicitor exchange): The agent provides us with the details of the purchaser, and we arrange for contract for sale to be issued to the purchaser’s solicitor. Once the purchaser is in a position to unconditionally exchange contracts and make payment of the agreed deposit (usually 10%) we too arrange for you to sign a copy of the contract for sale, and we then facilitate the exchange of contracts. The property remains on the market until the exchange of contracts.
- Agent exchanges Contracts on a cooling off period: You and the purchaser both agree on an offer and sign the contract with the agent, the purchaser pays a deposit equivalent to 0.25% of the purchase price, and the agent exchanges contracts on a cooling off period. By law the purchaser must receive a minimum five-day cooling off period which is for their benefit only. You are committed to the sale from the time of exchange, and do not have the option to pull out. The property is off the market from the time of signing the contract notwithstanding that the purchaser may elect to rescind the contract at any time during the cooling off period.
A purchaser will usually use the cooling off period to obtain their unconditional loan approval, and ob tain pest and building reports. If there is a problem with the proerty or with the loan approval, or if the purchaser simply gets 'cold feet', they can elect to rescind the contract for anyt reason during this time in which case they forfeit their 0.25% deposit to you.
Once contracts are exchanged by the agent, you as the vendor are bound by the terms and conditions of the contract as drafted unless changes are agreed to by the purchaser.
What should I do before allowing an agent to exchange contracts on my sale?
You should ring Meehans on our Helpline on 0418 37 32 37 for advice prior to signing the contract for sale.
As a general rule you should ensure the following:-
- The inclusions and exclusions marked on the contract for sale are correct;
- If you have a mortgage, you must ensure that the purchase price covers your mortgage payout and associated discharge costs in addition to your agent’s commission.
- That you have arrangements in place for your accommodation upon vacation of the property within the time frame for settlement as outlined in the contract for sale. A usual settlement period is six weeks from the date of exchange. Please note that the days included in the cooling off period are also counted in the settlement term, so you may in fact have only five weeks to source alternative accommodation if contracts are exchanged on a six week settlement with a five day cooling off period.
- If the property is being sold with a tenant that is under a current Residential Tenancy Agreement then the property will need to be sold subject to existing tenancies. If you have tenants that are holding over under a Residential Tenancy Agreement (i.e. their Residential Tenancy Agreement has expired), and the purchaser elects vacant possession, we need to ensure that you have sufficient time to give the tenant the required notice to vacate prior to the completion date.
- That any additions/alterations to the property that may have been carried out without council approvals are disclosed in the contract.
- That if you are wishing to purchase another property simultaneously that you have made the agent aware of this and the terms of that purchase (i.e. deposit requirements, settlement term etc).
What happens after the contracts are exchanged and the cooling off period expires?
Both you and the purchaser must remain committed to the terms of the contract for sale, and you must maintain the property in the same condition it was in as at the date of exchange until the matter is booked for settlement.
What happens on settlement?
Settlement is the day that you have to vacate the property, hand the keys to the agent, and the balance of the purchase price is paid to you by the purchaser.
We co-ordinate settlement for you, and if you have a mortgage we will deal with your mortgagee in relation to arranging the payout of your mortgage.
We will arrange for the balance of the purchase monies to be payable as directed by you.
The purchaser will usually carry out a final inspection of the property a day or so before settlement. This is normally arranged by the agent.