Practical Guide – Selling a Property
In a previous post, we outlined the process of purchasing a property. In today’s post, we will look at the same conveyancing process but from the perspective of the vendor.
There’s more to selling your house than simply putting it out on the market! The sales process can be a stressful time, which is why it is important you are aware of what is going on “behind-the-scenes” in the conveyancing process and that you have good professionals assisting you along the way.
Stage 1 – Pre-sale matters
You’ve now found a prospective purchaser. To prepare for the sale, your solicitor will prepare you a draft contract for your property, as well as what is known as a Section 32 statement. This statement provides to the purchaser specific information in relation to the property.
A number of factors will need to be confirmed as part of this stage. These include things such as:
- That there are no charges on the property which many affect the sale.
- That the title deeds for the property are in order.
- That the rates and charges have been paid up to date.
- That there are no negative restrictions on the property.
Once the contract is ready, this will be sent directly from your solicitor to the prospective purchaser / their solicitor, and never via the real estate agent.
Stage 2 – Exchange of contracts
The next stage of the legal process is exchange. It is at this stage that the contract for sale becomes legally binding on both parties. Under this stage, the contract is literally “exchanged” by the parties, whereby in a meeting between the parties the purchaser gives a signed copy of the contract (the offer) to the vendor, in exchange for a copy of the contract that has been signed by the vendor (acceptance of the offer). Prior to swapping the contracts, the lawyers for each party will ensure that each of the copies of the contract are identical and date them. A deposit on the property (usually 10% of the purchase price) is paid.
It is important that exchange always takes part via the parties’ lawyers. A simple real estate agent or licensed conveyancer will not have the legal training or expertise to be able to identify potential legal issues that may arise, except in the most basic of cases.
It is a legal requirement that all contracts for the sale of land include a cooling off period. This will allow the purchaser to rescind the contract for any reason before 5 pm on the fifth business day after the contracts have been exchanged. If the buyer does decide to option this clause, they will be required to forfeit 0.25% of the purchase price. Many vendor’s solicitors will request a section 66W certificate, which will allow for the parties to expedite the exchange and settlement process by shortening or waiving altogether the cooling off period.
Stage 3 – Settlement
This is the final stage of the conveyancing process. After the settlement, the purchaser will gain possession of the property and the transaction will be completed.
As part of this stage, the formal documents for transfer of title will be executed, settlement figures finalised and cheque details arranged. The purchaser will pay the balance of the purchase price, and the legal teams will arrange for any existing mortgages and caveats to be removed.
On the day of settlement, your lawyer will attend a meeting with the representatives from the other parties (the banks and legal representatives for each party) to exchange documents and cheques and to complete the matter, which will occur after settlement. Immediately after settlement, keys and other access devices (such as security codes or garage remotes) will be handed over to the purchaser. After the settlement, the transaction will have been finalised.
If you are considering selling your property, feel free to get in touch with our experienced property team to further discuss the process and ways we can add value