Buying a property can be a complex and overwhelming experience, especially for first-time buyers. In New South Wales, the process of purchasing a property is governed by the Conveyancing Act 1919, which sets out the legal requirements for the transfer of ownership of a property. One key step in the process is the offer and acceptance process, which is crucial for the buyer and the seller to understand.
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The Offer & Acceptance Process
The offer and acceptance process begins when a potential buyer makes an offer to purchase a property. This offer can be made verbally or in writing and should include the price the buyer is willing to pay for the property, as well as any conditions. For example, the buyer may have a condition that they can obtain formal finance approval, undertake pest and building reports or have an extended settlement.
Once the offer has been made, the seller can accept, reject or counter. If the seller accepts the offer, the contract is formed. If the seller rejects the offer, the buyer is free to make another offer or withdraw their interest in the property.
If the seller decides to counter the offer, they will make a new offer to the buyer, which the buyer can then accept or reject. This process can continue until both parties agree on the sale’s terms.
Once the contract has been formed, the buyer is required to pay a deposit, which is typically 10% of the purchase price. The deposit is generally held in a trust account by the selling agency and becomes security for the completion of the sale.
Steps a buyer may take at this stage will be to undertake a building and pest inspection report if one is not available, or strata report if the property is a unit or townhouse. This is to ensure the property is in good condition and there are no major defects that would affect its value.
The buyer’s solicitor or conveyancer will conduct a title search to ensure the property is free from encumbrances or liabilities. They will also prepare a contract of sale and any other necessary documentation.
Once all the necessary checks have been completed and the contract signed by both parties, the sale is considered legally binding (dependent on conditions attached). The final step is for the buyer to pay the purchase price balance and for the property transfer of ownership to be completed.
Things To Keep In Mind
Both the buyer and the seller need to be aware of the legal requirements and steps involved in the offer and acceptance process when buying a property in New South Wales. This includes understanding the significance of the contract of sale, the role of the solicitor or conveyancer and the importance of conducting necessary checks and inspections before proceeding with the sale. It’s also important:
- To consult with a solicitor or conveyancer before signing any contract of sale, as they can provide advice and guidance on the legal implications of the contract and help protect your rights and interests.
- For the buyers to be aware of the cooling-off period in NSW, which is five business days. During this period, the buyers can terminate the contract without any penalty, as long as the cooling-off period was not waived.
- For buyers to be aware of the stamp duty, which is a government tax payable on the purchase of a property.
- For buyers to be aware of the land transfer duty, which is a government tax payable on the transfer of ownership of a property.
Conclusion
In conclusion, buying a property in New South Wales is a complex process that requires a good understanding of the legal requirements and the steps involved. By following the offer and acceptance process, conducting necessary checks and inspections and having the support of a professional, buyers and sellers can navigate the process confidently. At Percival Property, we will work with you to ensure the sale or purchase of your property is completed in a timely, legal and efficient manner.