Steps Before Exchanging Contracts
We strongly advise clients to get legal advice before signing any Contract.
If your offer is accepted the Real Estate Agent sends us the sales instructions detailing the property, seller, buyer and solicitors acting for the seller.
We get the Contract from the Lawyers for the seller, which includes various legal searches, pre sale building reports and the EER. They may also supply the draft Transfer.
We meet with you to sign the Contract for Sale and Transfer. You provide a cheque (personal cheque is acceptable) payable to the Stakeholder or details of a deposit bond (if acceptable to the buyer) to us prior to exchange.
We confirm with you that finance is in place and we can exchange. Often banks send loan and mortgage document direct to you. If they send the documents to us and we meet with you to explain and sign the documents we will charge our usual rate.
We exchange the Contract for Sale with the solicitors for the seller and provide the deposit cheque. The solicitors for the seller give the deposit cheque to the stakeholder (often the Real Estate Agent) to hold until settlement.
Exchange & Cooling Off Period
Exchange creates legally binding obligations. Under the Act Agents can exchange Contracts but we suggest having the Lawyers exchange the Contracts following your instructions.
The Contracts have a five day cooling off period where the Buyer can rescind or change their mind. If you do you must pay 0.25% of the purchase price ($250 per $100,000). You can waive the cooling off period if we sign a certificate as your Lawyer confirming your instructions to waive the benefit.
Reports
The Building, Pest and Compliance Reports are vitally important. You should read thought the Reports and have us check them closely. The Reports should not be more than three months old.
Sellers can pass on the cost of the Building, Pest and Compliance Reports as an adjustment at settlement. The Section 119 Certificate giving details about a Body Corporate (if applicable) can also be passed on.
Insurance
You have an insurable interest in the property at exchange and should arrange for a building insurance cover note or policy to take effect at exchange. For unit title such as townhouses the Body Corporate arranges the building insurance.
Auctions
Auctions are a little different with no cooling off period for registered bidders that bought at auction or after the auction but on the same day as the auction.
Buying at auction as a registered bidder or after but on the day of the auction results in a binding exchange on that day.
Stamp Duty and the First Home Owners' Grant
There are limited ACT stamp duty concessions available for new property (or substantially renovated) purchases. These are available to first home buyers, people that haven't owned property for two years and those who transferred property due to Family Law Orders.
The concession depends on the price of the property and is means tested. We can provide information about making the application.
Your Bank or Mortgage Broker usually assists with the First Home Owners' Grant.
After Exchange
We advise you of the stamp duty payable and you provide a bank cheque (can not be a personal cheque) payable to the AT Revenue Office. We have the Transfer stamped at ACT Revenue.
The solicitors for the seller provide settlement figures adjusting the general rates, land tax (for investment properties) and water and sewerage rates. They also include their cheque directions regarding what cheques they require to pay out their bank etc.
We advise the incoming mortgagee (your bank) of the purchase details and tell them.
Settlement
We attend to settlement and collect cheques from your bank, provide them to the solicitors for the seller, provide the solicitors for the seller with an order on the agent to release the deposit, receive the Certificate of Title and Transfer and provide these to your bank and receive the keys to the property.
If the property is sold subject to a tenancy we receive a letter transferring the bond to you.
Your bank registers the Transfer and their Mortgage over the property at the Land Titles Office. The Agent provides the keys to you or we pass them over after settlement.
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