This page will summarise the Conveyancing process for selling property and should be particularly helpful for people preparing to sell.
Firstly, a property must have a Contract of Sale prepared before it can be advertised. A licensed Conveyancer or Solicitor can help prepare this and compile the necessary inclusions such as the Certificate of Title, drainage diagrams and zoning certificates that are obtained from the local council. As such, if you are considering selling a property, it is beneficial to contact a Conveyancer or Solicitor as early as possible.
In addition to preparing a Contract of Sale in advance, you may wish to consider the following:
If you are uncertain about any of these, please phone us and we can provide you guidance. While selling a property can be a stressful task, becoming familiar with the selling process (described below) and hiring a professional Conveyancer will set you up for a favourable outcome.
The Contract of Sale – must include the following:
A zoning certificate (officially named a Section 10.7 Certificate) are legal documents issued by the local council and contain information relating to how a property may be used (i.e if it can be used for commercial use), as well as information relating to the council development of that property (i.e. new apartments being built next door). It is imperative that you understand this document, so you are aware of the current and future implications that council planning may have on the property.
A drainage diagram, that highlights the location of sewerage systems from the property to the nearest main. We recommend you keep these diagrams on file, as they are often used for future excavation or plumbing works of a property.
A Certificate of Title, which is the official document proving a party is the owner of a property. This certificate will be transferred to the new owner upon settlement.
In addition to the above, if a property has easements, rights of way, restrictions or covenants, then copies of these must be attached to the Contract of Sale.
The cooling off period – This is a window of time that a buyer is able to withdraw from a property purchase. It is usually five business days in length, in which time, a buyer will usually organise pest and building inspections for the property. During this period, a buyer can withdraw from the sale for any reason, however will be required to pay 0.25% of the purchase price (i.e. $1250 if the purchase price is $500,000). Cooling off periods can be negotiated to be removed, extended or shortened. Cooling off periods only apply for private treaty sales, when buying at auction, there is no cooling off period and the parties exchange contracts immediately.
Without these documents, a buyer may be able to rescind the Contract of Sale. This is not an ideal situation, particularly if the seller has already acquired another property.
Capital Gains Tax
Capital gains or capital loss occurs when you purchase an asset (i.e. a house) and then sell it later for a different amount. The Australian Taxation Office may impose a Capital Gains Tax (CGT) when selling a property.
If you are selling a property which has been your principal place of residence and you satisfy eligibility criteria, then you will receive an exemption from this capital gains tax.
If you are selling a property that is not your principal place of residence, such as an investment or business property, then it is likely you will be required to pay capital gains tax.
There are different factors to consider when calculating capital gains tax, such as an individual’s taxable income. In this case we recommend seeking the professional advice of your Accountant.
A property valuation is when a real estate agent visits a property, evaluates it and produces a sales appraisal document. The outcome, is to identify a expected sale price for the property.
The value is calculated by many factors, such as market demand, recent sales, land size, building quality, investment opportunity and council planning for that region.
It is not a legal requirement to have a property valued prior to selling. The document is not used for legal processes, such as identifying land tax or stamp duty. It is simply an appraisal so you have a better idea of the property’s value in the current market.
Yes. If the pest and building inspection produce findings of significance, the buying party can request their Solicitor or Conveyancer to negotiate with the selling party during the cooling off period.
Should the buyer decide to not purchase the property, they are able to withdraw from the sale during this cooling off period, and will be required to forfeit 0.25% of the purchase price.
Yes they can, although this will incur a substantial cost.
The Contract of Sale includes a clause for the cooling off period, noting a date and time of expiry. If a buyer wishes to withdraw from the purchase after the cooling off period has expired, they will forfeit the full 10% deposit. Additionally, the buyer may be sued for losses by the selling party.
For a property sale, we will perform the following: