Let’s face it. We as agents use a lot of jargon. To simplify the process of selling a house I’ve put together this list of terminology used in the sale and buying process. I hope that it helps. If there is something that you are still not sure about please reach out with an email, text or phone call. Or better yet, post your question in the comments below. You can be sure that you’re not the only one, and that way your question will help others.
The legal process of selling a house in NSW
- An agency agreement is signed between yourself and your agent of choice. You have a 24- hour cooling off period once you have signed this document. This means that if you change your mind within 24 hours you can terminate the agreement and are no longer bound to the agent or their agency. Do not confuse this with signing the contract for sale. Once you have signed a contract for the sale of your home you do not have a cooling off period.
Reasons for terminating an agency agreement are usually because you’ve had a change of heart. This may be due to a) you’ve decided that now isn’t the ideal time for you to sell or b) you are having second thoughts about the agent you chose.
If you terminate the agreement, any marketing that you may have signed up for will also be waived as you are within your rights to terminate the agency within that 24 hour period of signing.
- Your solicitor or conveyancer will prepare a contract of sale. This is the document that you and the buyer will sign once you agree on a sale price. You will not sign this document until such time as a buyer is found. Your legal representative will ask you a series of questions including any renovations or improvements that you may have done over the years. They will ask about inclusions and exclusions – basically what is staying with the property and what you may be taking with you. This includes things like, dishwasher, curtains, light fittings, spa and spa equipment etc.
Solicitor and conveyancers vary in costs, I plan to post an update of their fees and charges in a future article.
There is no set order in which these events need to occur. Some people meet with an agent first and then arrange for a contract. Others do it the other way around. The majority of agents will be able to recommend you to a reputable solicitor or conveyancer.
In NSW it is illegal for a real estate agent to show your property or give the address out to buyers until they have both of these documents in their possession. If an agent offers to show your home without either a contract or an agency agreement they are effectively breaking the law. These laws are in place to protect sellers and buyers so if you are considering engaging an agent without a contract and an agency agreement I’d proceed with extreme caution. And be confident in knowing that the ethical agents won’t do it anyway.
Basically once the above two documents have been prepared the agent will be able to start marketing and promoting your property.
Once a buyer in found you should be guided by your agent and legal representative as to what should happen next.
Who’s who & what’s what
In the process of selling a house
|Vendor||the seller/owner or their legal representative such as power of
attorney, executor, guardian etc
|an agreement between the seller and the agent. It outlines the
real estate agents commission & marketing costs, the agents
expectation of sale price and the period of the agreement. A
standard agreement is 12 weeks but you can request any period
that you like. The document is legally binding so be 100% sure that
you are happy with your choice of agent. If in any doubt don’t sign,
or give them a trial period of your choosing.Note: It is illegal for an agent to show your home without an
agency agreement & a Contract of Sale – the reputable agents won’t
|prepared by the sellers solicitor or conveyancer. Legally required
before the agent can show your property to potential buyers or
even give out the address
|a) once you accept an offer you (and the buyer) will need to sign
the contact. This is usually done with the agent although it can
also happen in your solicitors office depending on the circumstances.b) on the signing of the contract the purchaser pays .25%
(one quarter of a percent) deposit and enters into a 5 or 10 day
cooling off period. For example on a $700,000 sale this would
equate to $1750. Both parties ie seller and buyer sign the
contract (separate copies).c) the contracts are dated, the deposit has been paid.
The contracts are now deemed to be ‘exchanged’.Note: as the seller if the buyer pulls out for any reason at all you are
legally entitled to keep their .25% deposit if you choose.CAUTION: Sellers do not get a cooling off period. Once you sign
the contract you are legally bound
|On exchange the buyer will proceed to get their pest and building
inspections arranged. They will ensure that their finance is in place.
During this time the buyers lender may require access for a valuation.
Any changes to terms and conditions are usually arranged during the
cooling off period
|66W||A 66w effectively waives the purchasers cooling off rights. A 66W
is a certificate signed by the buyer’s solicitor or conveyancer that
waives all the buyers cooling off rights. This usually happens once
the buyer has completed all their checks.
|10% deposit||at the end of the cooling off period the balance of the 10%
is payable (unless a 5% has been agreed to). This is 10% of the purchase price less the .25% deposit that has already been paid at exchange.
|this is the term given to a sale once the cooling off period
has expired and the full deposit has been paid
(ie the 10 or 5%). This is the point where the SOLD sticker
is put up 🙂 Congratulations!
|the buyer has a legal right to inspect the property one last
time before settlement and before handing over the bulk of
their (soon to be yours) money. This is usually done on the day
of settlement or a day or two before depending on individual
circumstances. Your agent will arrange this after consultation
This list might look overwhelming but you don’t need to know what to do and when.
Find an experienced, caring and local real estate agent and a reputable conveyancer or solicitor. Together they will navigate the process for you so that you have a smooth transition from your existing home into your new one.
Your choice of agent and legal representative will make all the difference to your selling and/or buying experience.