Closing The Contract
If you and your agent have assessed the market correctly and the house has been properly presented you will soon have a firm buyer.
Unless you have sold at auction (in which case the contract will already have been drawn up and signed after the successful bid) the contract will have been drawn up before your house or unit was advertised.
If a prospective buyer expresses interest in the house or unit the next step is for your agent to secure an agreement. At this stage the buyer also has the right to organise any inspections he or she may want - ie pest, building, and can go ahead with raising or confirming the necessary finance.
Your solicitor can now proceed to finalise the duplicate contracts of sale by inserting any extra conditions you have agreed with the purchaser.
The contract should specify any fittings or fixtures - blinds, light fittings, awnings, stoves, etc - which are being purchased with the property.
It should also include a specific date on which vacant possession of the house or unit will be granted.
When the buyer and buyers solicitor are satisfied that all the necessary surveys and searches have been carried out satisfactorily, the contracts are signed and exchanged.
The exchange normally takes place in the office of the vendor's solicitors and from this stage on after a 'cooling off' period of five business days - both parties are legally bound, unless there are exceptional circumstances, to go through with the sale. The purchaser pays a deposit which usually amounts to 10 percent of the purchase price. This money is normally paid to the real estate agent and kept in a trust account or invested in an interest bearing account in the names of both parties, and the interest shared between them.
The purchaser is responsible for paying the stamp duty on the contract and, when it is signed the onus for insurance rests with the seller until settlement or after completion of sale. After settlement or completion the new owner is responsible.
The transaction is completed on Settlement Day - the day when the purchaser pays the balance of the purchase price. Usually the settlement meeting is attended by the vendor's and purchaser's solicitors and, if necessary, a representative of the organisation with whom the buyer has arranged a mortgage.
At this meeting the balance of the money owed is paid and the vendor's solicitor instructs the agent to disperse the moneys he has held on behalf of the vendor and purchaser.
The purchaser will also pay whatever 'adjustments' have been agreed. These normally cover the proportion of water and council rates the vendor has paid beyond the date on which the house or unit will change hands.
The Nuts & Bolts of Conveyancing
The vendor's solicitor is responsible for drawing up the contract.
Both the vendor's and buyer's solicitors are responsible for making sure that the contract is fair and reasonable for both sides.
The vendor's solicitor will normally be involved in the conveyancing only to the extent of making certain documents available to the buyer's solicitor.
Conveyancing is basically the business of transferring the legal ownership of the property from one person to another.
It involves land title searches to ensure that the vendor is the legal owner, and searches to determine whether any other bodies have an interest in the property.
For instance, the Roads and Traffic Authority has an interest in the property (perhaps for a road widening scheme) or whether any other authorities (power, water, sewerage and the rest) might be involved.