Buying & Selling A House
BUYING AND SELLING A HOUSE
There are many different aspects to consider when buying and/or selling a property. The process will be slightly different depending on the type of property you are buying or selling.
Buying
There are two ways to purchase a property. The first is through a Real Estate Agency or Firm and the second is by private sale.
In both situations, the buyer and the seller will need to enter into an Agreement for Sale and Purchase (“Agreement”). This can be prepared by either the Real Estate Agent, or the buyer's Solicitor (or seller's Solicitor in some situations).
Before entering into an Agreement, the buyer should carefully consider the following matters:
- Location - Is the property in the right location for you (i.e. in terms of employment, lifestyle and family commitments)?
- Finance - Will you have enough funds to purchase the property? Will you need to borrow funds from a bank?
- Building Inspection - Have you completed an inspection of the property? Will you need to obtain a Building Inspection Report? Are the seller and/or agent aware of any problems with the property?
It is important to prepare the Agreement carefully to ensure the needs of both the buyer and the seller are met. Engaging the services of a Solicitor before the Agreement is signed is recommended to both parties to avoid any problems arising with the Agreement going forward.
There are many conditions that both the seller and the buyer can include in the Further Terms of Sale contained in the Agreement. Common conditions include finance, builders report, valuation, Land Information Memorandum (prepared by local council) and due diligence. Once again, it is important to include conditions that satisfy your needs and requirements.
Should all conditions (if any) in the Agreement be satisfied by the buyer, the Agreement will proceed to settlement which is the date set out in the Agreement. There is a separate settlement process that you will work through with your Solicitor.
Selling
The process for selling a property is similar to buying a property however the seller will need to complete different tasks than a buyer.
Before selling a property, the following matters should be considered:
- Listing the property with a Real Estate Agent or selling by private sale;
- Purchase price;
- Repayment of a mortgage or other borrowed funds;
- Work to be completed before the property is listed and sold;
- Where to next?
If the property is a unit, then the seller will need to provide a Pre-Contract Disclosure Statement (“PCDS”) to all prospective purchasers. The PCDS is usually prepared by the seller's Solicitor and includes all relevant information regarding the legal title of the unit, the levies of the body corporate and insurance, any outstanding money due by the seller to the body corporate, details of funds held in accounts, works to be completed by the body corporate and any proceeding in which the body corporate is involved.
Once again, it is always advisable to obtain legal advice before entering into an Agreement to ensure the Agreement satisfies the seller’s needs.
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