Conveyancing is the transferring of legal ownership of land from one party to another.
This is the document that sets out the terms and procedures for selling and buying land in NSW. The most common contract is based on a copyright document prepared jointly by the Law Society of NSW and the Real Estate Institute of NSW. Most contracts will also have “special conditions” added by the conveyancer who drafts the contract.
Special Conditions are also sometimes called “additional provisions”. They are extra clauses added to the standard Law Society and Real Estate Institute Contract for Sale and Purchase of Land to cover specific matters relating to the particular transaction, or matters which the conveyancer drafting the contract thinks are not adequately covered by the standard contract.
The deposit is a portion of the purchase price (usually 10% but often 5%) which is paid to the agent (or the vendor’s conveyancer if there is no agent) on the date of exchange.
In conveyancing practice in NSW, the person selling and the person buying each sign separate identical copies of the contract. These copies are called “counterparts”. “Exchange” means the buyer gives their signed counterpart to the seller. The seller then dates both copies and gives the buyer the seller’s signed counterpart in exchange. The purchaser must pay the deposit when contracts are exchanged.
The date of exchange is the date the seller dates the contract and gives the buyer the seller’s signed counterpart.
This is when the real estate agent handling the sale does the physical exchange of contracts on behalf of the buyer and seller. Contracts exchanged this way will be subject to a cooling off period.
A cooling off period is a period of time in which the buyer is allowed to change their mind without being in breach of the contract. The buyer may pull out of the purchase by giving the seller written notice. If the buyer does so, they must forfeit to the seller 0.25% of the agreed purchase price to compensate the seller for their trouble. Under the Conveyancing Act the cooling off period is 5 business days but this may be extended by agreement.
66W refers to a section of the Conveyancing Act. In respect of a conveyancing transaction it refers to a certificate given by the buyer’s conveyancer to waive any cooling off period. If there is no certificate, under the Conveyancing Act the cooling off period is 5 business days. A s66W certificate provides that there is no cooling off period.
Stamp duty is a State Government tax payable on most land transactions in New South Wales and calculated in most cases on the price the purchaser is paying for the land. It is payable by the purchaser and must be paid within three months of the date of exchange, or at or before completion if the buyer is borrowing the purchase money. You can find out the stamp duty for a given purchase price here.
If you own property as tenants in common and one of you dies, the deceased owner’s share forms part of their estate and is dealt with according to their Will. Tenants in common can specify the exact shares they hold, and can deal with their own share independently of the other tenant/s in common.
If you own property as joint tenants and one of you dies, ownership of the property automatically passes to the surviving joint tenant/s. A joint tenant cannot deal with their interest in the land independently of the other joint tenant/s.
Completion (also known as settlement) is when both the buyer and seller do everything required to “complete” the transaction. The buyer pays all the money required and in return the seller transfers ownership of the land to the buyer. Completion should occur on the date provided for in the contract, which is usually between 4 and 6 weeks after the date of exchange.
Some things, like council rates, are paid for a fixed period, whether it might be quarterly, yearly or some other period. If your completion date falls in the middle of a period, there needs to be an “adjustment” of the payment between the buyer and the seller, so the seller only pays up to the completion date, and the buyer only pays from the completion date onwards. The adjustment is made by adding the buyer’s share to the purchase price of the property if the rates are paid up, or deducting the seller’s share from the purchase price if the rates are being left for the purchaser to pay later. The usual practice is to make the adjustment as though the rates are paid, and then draw a cheque for payment at completion, so that everyone knows the rates are actually paid. You should keep in mind when budgeting for settlement that there will probably be some extra funds needed for these adjustments.
This is a new system for completing land transactions in New South Wales. Instead of all the parties involved (buyer’s conveyancer, buyer’s bank, seller’s conveyancer, seller’s bank) gathering together in one place at a specified time, the settlement occurs online electronically. Electronic settlement can only occur if all parties to the transaction agree and have the capacity to settle electronically through PEXA.
PEXA is Property Exchange Australia. It co-ordinates online settlements, including transfer of funds and registration of transfers of ownership of land. Australia is the first country in the world to have this system available.
VOI is Verification of Identity. It is a stringent system for verifying your identity before you conduct any transactions involving land, and is designed to prevent fraud. You need to take your identification documents to a qualified agent to have your identification verified and complete a Client Authorisation.
This is the document which you sign which authorises us to complete your sale or purchase electronically on your behalf. It allows us to sign (electronically) any documents required and allows us to direct your bank how to pay any money on your behalf.
Fixed price means you pay us a fixed fee which we tell you in writing in advance, before you hire us. Our fixed price will include actual fees we pay to other parties on your behalf, like fees for certificates or for registering your ownership of the land, so there will be no surprises. We do not add extras for things like photocopies, faxing or file storage.
Yes, just fill out the information form and leave the space for the agent blank. We will prepare your documents and email them directly to you.
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