Follow these simple steps to keep your buyer from walking away between offer and exchange. Photo: John Lomnicki.
So you’ve found the perfect buyer for your home, shaken hands on a great price and started planning out your next chapter. How exciting! Just don’t count your chickens before they hatch. Accepting an offer might feel like crossing the finish line, but your investment is still on fragile ground.
Whether they’re caused by finance issues or cold feet, property sales can and do collapse at the 11th hour. That perfect buyer could just as easily leave you frustrated, out of pocket and back on the market.
The key milestone to reach is contract exchange.
In the ACT and NSW, the deal only becomes legally binding when both parties sign and exchange copies of the same contract, subject to any cooling-off rights and contractual conditions. The exception lies at auction, where the buyer is locked in when the hammer falls.
Either party can pull the plug without penalty if exchange hasn’t been finalised. Even then, Velocity Conveyancing principal Andrew Satsias says problems can still arise.
“After exchange, problems can include delays with the buyer’s finance, the seller’s bank not being ready to discharge its mortgage, outstanding documents or title issues,” he says.
“Disputes can also occur at the final inspection over damage, missing inclusions or whether the property will be vacant as promised.
“These delays can be particularly stressful when the seller is relying on the sale to settle another purchase.”
Timing is everything here. To reduce the risk of issues after exchange, contact your lender immediately and complete any mortgage discharge requirements. Banks need time to prepare – don’t assume telling your real estate agent or solicitor will start the process.
The faster you and your solicitor can respond, the less opportunity your buyer has to walk away. A slow or incomplete contract is one of the most common reasons buyers lose confidence or pull out before exchange.
Co-principals Andrew Satsias and Peter Romano have led Velocity Conveyancing for more than two decades. Photo: Thomas Lucraft.
The second milestone to reach before you can consider your property sold is settlement. This usually happens 30 days after exchange in the ACT and 42 days after exchange in NSW, subject to the timeframe agreed un in the contract.
“At settlement, the balance of the purchase price is paid, any mortgage is discharged, and property transfer documents are lodged,” Andrew says.
“This is when the seller receives proceeds of the sale, minus any amount required to pay out the mortgage and other settlement expenses.”
Once settlement has been reached, arrange your move and make sure the property is ready for a timely handover. Then you can finally breathe that sigh of relief and celebrate.
Andrew’s most important message for people looking to sell is to choose an experienced local conveyancing lawyer and local real estate agent to support your sale.
“You are dealing with one of your most valuable assets. Choose your team for their expertise, responsiveness and knowledge of your local market,” he says.
“A small saving on fees can quickly disappear if poor advice or communication leads to a dispute or delayed settlement.
“Before you list your property or accept an offer, speak with a qualified property lawyer who can prepare your contract correctly and help you lock in your buyer to the full extent of the law.”
For more information, visit Velocity Conveyancing.
