Purchasing residential real estate can be a very exciting process; however it can also be a confusing time for the prospective buyer. As you may already be aware, different agencies usually have different sets of rules and standards, so we would like to inform you of the buying process should you decide to purchase a property through Davidson Cameron & Co.
Should you decide to secure or make an offer on one of our listed properties, we will ask you to confirm the following details, enabling us to help you in the best possible way.
- The actual purchase price you will be paying for the property.
- The method by which you choose to pay the 10% deposit. e.g.cheque/ bond /other.
- The settlement period that you require.
- The name of your chosen Solicitor or Conveyancer.
- The name of your bank or financial lending institution.
- Any special conditions or requests that you may have so that we can inform the vendor (property owner).
Once we have the above information, we are in a position to arrange a meeting with the vendor. You will also be asked to submit your offer in writing. It should be noted that this is in no way binding, we simply find this useful when meeting with the vendor.
Property owners receive all types of interest – some genuine, some not.
Some people submit offers to test the possibility of sale, but do not actually stay true to their offer. This can lead to frustration and concern for the owners as they try to assess who is actually a genuine buyer. The best way to present a strong offer on any property is to utilise your purchasing option of the 5-day Cooling Off Period available in all NSW property Contracts Of Sale.
The cooling-off period is only available to the purchaser and allows for an offer to be submitted to the owner in writing, on the Contract Of Sale. This clearly demonstrates to the vendor that you are serious about your offer.
Once an agreement on price and settlement conditions has been reached with the vendor, the sale can proceed. An exchange of contracts is the only way to actually buy or sell a property. The exchange of contracts occurs when the purchaser and vendor each sign an identical copy of the proposed contract for the sale of land that land having a title. (The property on the land, being houses, townhouses etc., are known as improvements to the subject land.) The exchange of contracts can be made according to terms under either one of the following options.
Option One Unconditional Exchange
This means the purchaser’s solicitor has signed a 66W certificate. This certificate will waive any cooling-off period and makes both parties committed to an instant, legally binding relationship. There is no turning back. This option also applies when a purchaser is the successful bidder at auction (where contracts are unconditionally exchanged).
Option Two Exchange of Contracts
Subject to a 5 day cooling-off period.
As sales agents, we can only exchange contracts with a cooling-off period. The period for withdrawal lasts for 5 working days and allows the purchaser the right to rescind the Contract of Sale for any reason. This period commences upon exchange and terminates in New South Wales on the fifth working day at 5pm E.S.T. Remember that Saturday and Sunday, along with public and bank holidays, are not business days. The vendor may extend this period by a clause in the contract or by notice in writing given before the end of the period. The cooling-off period is created to allow the purchaser time to organise inspections and reports, and to allow their legal representative to check the contract.
If you are wishing to seal a deal, it is important that you understand the commitment level required by both the purchaser and vendor.
Waiving the cooling off period
The signing of a 66W is a great way to purchase. This method provides full protection against:
- the vendor pulling out of the sale
- another purchaser paying more for the property
- any government body wishing to purchase the property.
Exchanging with a cooling off
With this contract exchanged, the purchaser has total control and time to ensure that everything is to their liking. However, this protective method requires commitment by the purchaser. For example, if a rescission takes place, a financial penalty is incurred. The purchaser on rescission forfeits 0.25% of the purchase price ($250 in $100,000, $500 in $200,000; note that no minimum amount is specified). This money is payable directly to the vendor. If not, the vendor has the right for recovery of the 0.25% purchase price as a debt, where either no deposit has been paid or the amount of the deposit was insufficient. Neither party has any further claim against the other, except where the purchaser may have obtained possession (that is take ownership of the property). In some cases, a purchaser does not wish to sign anything without their solicitor’s approval. If this is the decision, Davidson Cameron & Co will issue the potential buyer with what is known as a Sales Advice. This contains all the relevant details of the sale. Your solicitor will then make contact with the vendors solicitor and proceed with reports and reading of contracts with no determined time-frame for exchange. However, it is important to note that whilst this is taking place, the property will remain on the market, and anybody wishing to make an offer can do so.
Note: It is a legal requirement that every offer put forward must be presented to the vendor. Although you may be a day or two ahead with your solicitor, any other interested party is able to sign the Contract of Sale under a cooling-off period as specified above in option (2). The property is then secured, leaving you no option but to purchase. Your solicitor is powerless to act, as contracts are exchanged and in the case of a cool-off, this can be carried out by either the agent or the vendor’s solicitor.
If you want to make an offer, be certain that you are prepared by having the following items organised:
- A pre-approval of finance from your bank or lending institution.
- The sale of your current property completed, or at least assessed for value and possible sale time.
- A solicitor or conveyancer selected.
- An arrangement for paying the 10% deposit or deposit bond and associated costs.
- An idea of settlement times required before you take possession, this may assist with your negotiation.
Building & Pest Reports recommended for residential properties
Before you purchase any property – in particular a new home – it is important that you receive a copy of a Pest and Building Report from a qualified inspector.
Please note that this report is a complete list of defects of the home, and is very different from the feature brochure that you receive from Davidson Cameron & Co. Most people are surprised by the Pest and building report on the home, and can misinterpret the report, e.g. The home is 24 years old and …is in need of new roof tiles. All homes at one time or another will require maintenance which then becomes capital improvement on the property. We would recommend reports be carried out on septic tanks on small acreage and lifestyle blocks.
Don’t be alarmed if your bank or lending institution requests a valuation by a registered property valuer.
This is normal practice of lending institutions, and serves as confirmation of the agreed sale price.
Buying at Auction
If you are intending to buy at auction, all the above-mentioned must be in place. Auction day is final.
If you turn up to bid and are the highest bidder past the reserved price (on-the-market price) you become the instant owner awaiting settlement of that property.
Preparation is the key. Understand your rights and have everything in place. If you follow this advice, together with that of your solicitor and your Davidson Cameron & Co agent, you will be on your way to securing the home that is right for you. If you are considering purchasing property in the future, or are currently in the process of buying a home through another company, please feel free to call any of the Davidson Cameron & Co sales team with any advice or questions you may have. Our experienced property managers are also able to conduct rental estimates on your behalf. They will be happy to assist you.
Seek advice from your financial lender, determine what your limitations are and exactly how much you can afford to borrow.
Pre-approvals are best arranged before you inspect. This saves disappointment if you see something you like but can t afford.
Research and Requirements
Contact one of our professional sales executives and let them know what you are looking for. Brief them on any special requirements. Always be aware that the seller appoints the agent and as such, agents must act in the seller’s interests.
Do some searching on our website and obtain a comprehensive list of all property currently listed with Davidson Cameron and Co and join our buyer alert system – be the first to know when a property that meets your needs comes onto the market!
Take the time to research the area that you intend purchasing in. Investigate access to facilities such as schools, transport, day care, medical and others. Attend open for inspections to gauge properties available in your price range and the type of property you are seeking.
Talk to our Agents
Contact our office to make an appointment with an agent to have a friendly chat with Davidson and Cameron property agents who will guide you through your search for the property you are seeking. We also offer to keep you up to date with all new listings: to ensure we have all your details simply register on our buyer’s alert (link under Buying on this website).
When it comes time to inspect properties of interest, take notes as it’s easy to forget important details after looking at a number of properties.
When you look at properties, ask lots of questions about things you are uncertain about. Purchasing a property is a big investment and you need to be confident you’re making the right decision.
Obtain a Copy of the Contract
Once you have found your house or property and you are ready for the next step in the purchase process, ask us to provide a copy of the Contract to you or your Solicitor/Conveyancer. This will provide you with an insight into any legal issues which may arise.
Pest Inspection and Building Report
Some financial institutions and most Solicitors/Conveyancers require you to have a Pest Inspection and Building Report carried out on the home you are interested in purchasing. This will give you an indication of any pest issues or structural defects.
Now that you have the information required you are in a position to negotiate to purchase. Any offers should be submitted through the Vendor’s (Seller’s) Agent.
Contract for the sale of land
Once you have negotiated a sale you will need to sign the Contract for the sale of land and pay the deposit, usually 10% of the purchase price. This is held in the Agent’s Trust Account as stakeholder for the Vendor. Sometimes purchasers elect to utilise a Deposit Bond which is available form most financial lending institutions.
The Vendor (Seller) will sign their Contract for the sale of land and the Solicitors/Conveyancers will then exchange the Contracts.
In a purchase at Auction the Agent will exchange the Contract for the sale of land.
Most settlement periods are 6 weeks or 42 days from the date of exchange unless an alternative period of time is arranged.
Prior to you settling on your purchase your Solicitor/Conveyancer may suggest a pre-settlement inspection, usually on the day of settlement. This enables you to ensure that the house or property is in the same condition as when you inspected it and that the inclusions are as per the Contract for the sale of land.
On settlement you will be handed the keys to your property.
This is an important time for you and we invite you to call us for any assistance and help.
Remember, for more comprehensive information on buying your home, you may choose to download the guide to purchasing your home developed by Housing NSW. For your copy please access the links below or log onto www.housing.nsw.gov.au