How to Exchange Contracts when Buying a HouseJun 29, 2018 11:31:36 AM
You may have found the perfect home or the best real estate investment, but you still have to go through the actual exchange of ownership without any problems before becoming the official owner. Your solicitor or conveyancer can ensure this process is completed seamlessly.
When you need a solicitor or conveyancer
Conveyancers and solicitors handle the legal process of transferring ownership from one party to another. You should seek professional advice as soon as you're interested in a property to make sure you know exactly what you're buying.
Traditionally only solicitors handled conveyancing matters. However, now trained conveyancers also understand this complex market and have the experience to deal with the most complicated issues.
Why you exchange contracts
In simple terms, you exchange contracts to make a binding agreement to buy or sell the property to the other party. Until the exchange takes place, either party can back out of the sale without penalty. Once contracts are exchanged, either party can enforce rights against the other.
In New South Wales, buyers are entitled to a cooling-off period of 5 days (if the vendor agrees longer periods may be negotiated), and only forfeit a small percentage (0.25%) of the purchase price to the seller if they back out.
When you exchange contracts
You exchange contracts once you:
- Have everything in order, such as financing for the deposit and a mortgage lender
- You fully understand the contract
- Your conveyancer has completed all relevant investigations on the property's title, such as ownership issues, and you're happy that you understand what you're purchasing
- Your conveyancer has negotiated all inclusions and exclusions e.g. window furnishings, lights and white goods.
- You've agreed on the completion date.
The unconditional exchange generally takes place between 7 and 10 days after receiving the sales advice, but you can arrange to exchange earlier or later than this.
How you complete the conveyancing process
Once you exchange contracts, you should attend to a few final tasks:
- Visit the property with your agent (by appointment) to make sure it's in the same condition you agreed to
- Make sure all the relevant documents are in place
- Notify banks, doctors, utilities companies, etc. that you've moved home
For more detailed information on conveyancing and a step-by-step downloadable guide covering the exchange process in more detail, get your copy of our free eBook now.Return to Blog