When thinking about Property the two most common circumstances are either Buying or Selling.
Selling a property is an important milestone in anyone’s life and could be a more stressful than necessary for those who aren’t familiar with the process.
To avoid unnecessary stress of the ‘unknown’ we’re prepared an overview and explanation of the typical Sale process to keep you navigate this journey with ease.
1. Engage a selling real estate agent Who can provide you with advice on marketing strategies. Before you engage a selling agent, we recommend that you consider the following:
- Commission and fees (including marketing and advertising costs);
- Exclusivity of agent and period of sale authority;
- If they have the property licensing and authority;
- Ask for their sales history and knowledge of the local area, ideally the agent should have a thorough knowledge of the area to effectively market the property to prospective purchasers;
- Ask for comparable sales of similar properties in the area;
- Type of sale method they recommend (i.e. private sale, auction or a combination of both);
- Their predicted vale of the sale price value (sometimes this is provided as a range); and
- The estimated time frame of the campaign to sell the Property.
2. Engage a Solicitor to prepare the Contract of Sale and Vendor’s Statement (Section 32). Click here to read about what disclosures should be included in the Vendor’s Statement and consequences of a defective Vendor’s Statement.
3. Complete a Vendor’s Questionnaire. This provides information in relation to the property for your legal partner to review and consider the legal requirements in order to draft the Contract of Sale and Vendor’s Statement.
4. Collate all required information which you are required to disclose on the property. This includes but is not limited to any permits, notices, orders, material facts, owner builder information about the Property.
5. Marketing and Open Inspections. Your selling agent will begin their marketing campaign and listing of the property on the market for sale and arrange prospective purchasers to attend the property for inspection.
6. Sign the sale documents. Consider all offers you receive. It’s a big decision so don’t feel you have to rush. A formal offer is usually provided by way of a signed Contract of Sale. You should check the particulars of sale and any special conditions incorporated as part of the offer from a prospective purchaser. If the offer is acceptable, you then sign the Contract of Sale as your formal acceptance of the offer. If you are not happy with the offer (whether the particulars of sale or other terms), you can reject the offer and/or submit a counter-offer.
*Important note: the settlement date is the day you will need to hand over the property, ensure you allow yourself sufficient time to vacate the property and/or provide notice to tenants to vacate the property if vacant possession is provided. In the case of tenants ensure you build in time for a final clean and fix of any minor repairs that may be necessary.
7. Inform your solicitor immediately post contract. This is crucial as your solicitor needs ensure all terms and conditions of the Contract are satisfied and prepare for settlement and every sale is different.
8. Organise Discharge of Mortgage (if the title is encumbered by a mortgage). You will need to complete a discharge authority form and provide this to your solicitor. Your solicitor will then inform the discharging Mortgagee and liaise with them all the way up to settlement (including obtaining a payout figure).
9. Early Release of Deposit. If required, you can also request an early release of deposit. NB: There will be certain requirements to be met prior to the release of deposit and you should be aware that there is no guarantee that it will be released.
10. Foreign Resident Capital Gains Withholding (FRCGW) certificate – If the Property sells for $750,000 and above, you will need to apply for a FRCGW certificate to confirm withholding tax is not required for Australian residents. If you are a foreign Vendor (or fail to provide the relevant certificate), then 12.5% of the sale price will be withheld at settlement for payment to the ATO.
11. Sign the digital duties form which provides information of the transaction and allows the State Revenue Office to assess stamp duty prior to settlement.
12. Insurance. As you carry the risk of the property until settlement, to protect yourself you should ensure that the property continues to be insured for its full replacement value until settlement has been completed.
13. Statement of Adjustments. Normally the purchaser’s solicitor is responsible for preparing a Statement of Adjustments, which your solicitor would review prior to settlement. A Statement of Adjustments is where outgoings for the property are apportioned (such as council rates, water rates, land tax and owners corporation fees) and rent (if applicable) between the parties. It will also include a Settlement Statement that will include the sale proceeds to be paid to you and any additional payment directions (such as to the relevant authorities in payment of outstanding outgoings).
Prior to Settlement
14. Vacant Possession. Ensure all items (other than fixtures & fittings and other ‘goods’ listed in the Contract of Sale) are removed prior to settlement, including rubbish. Give yourself plenty of time to arrange and complete this as if you rely on third parties to complete the timing can vary.
15. Disconnection of utilities. You need to arrange to disconnect the utilities at the property after settlement. The purchaser can then elect to establish their own service provider and re-connect the utilities, once settle is complete.
16. Final inspection. The purchaser is entitled to a final inspection of the property, usually within the seven days leading up to settlement. You MUST ensure that the property is in the same condition as it was on the day of sale (the date on which both parties signed the Contract of Sale).
17. You’ve made it to the end, congratulations! It’s time to pop the champagne and celebrate the sale of your Property.
18. Your solicitor will now send the Notice of Disposition to various authorities notifying them of the change of ownership.
19. You should also advise your accountant of the sale, particularly if the property is an investment property.
20. A settlement report is usually provided by your solicitor that details the settlement of the property transaction.
If you are looking to sell your home, please contact us or complete the Vendor’s questionnaire here and one of our team will be in contact with you.
Alternatively, if you are looking to purchase a property, you may complete our Purchaser’s questionnaire here.
Burke & Associates Property Division
At Burke & Associates Lawyers, we have a depth of experience in working with and assisting both vendors and purchasers in the conveyance of their property, whether vacant land, residential or commercial real estate. We assist owner-occupiers, investors and property developers in the legal process. Our experienced Property lawyers provide support from start to finish and guide you through the conveyancing process.
Please contact our Property Division’s legal team for further information or to take advantage of our complimentary 15 minute consultation to discuss how we can assist you by phoning us on +61 3 9822 8588.
Insight written by Wendy Toura