Buying a House in NSW: Contracts, Conveyancing and Settlement
Buying a home involves a series of decisions that become more difficult to change once you exchange contracts. Understanding the sequence, from the first contract review to settlement, helps you know what to organise, what to ask and when to act.
1. Review the contract before committing
The contract is more than a record of the price. It sets out the property being purchased, the parties' obligations, settlement arrangements and any special conditions. The legal review should identify matters that need clarification or negotiation, including title issues, easements, inclusions, adjustments and any unusual terms. Depending on the property, strata records, building and pest inspections and other searches may also be important.
A contract prepared for the seller is not a substitute for advice to the buyer. The right time to raise concerns is generally before exchange, when there may still be an opportunity to negotiate.
2. Arrange finance and understand your full costs
The price is only one part of a property budget. Buyers should allow for transfer duty if applicable, inspection fees, registration and legal costs, loan fees and any necessary adjustments. A lender's pre-approval is not always the same as final approval for a specific property. Confirm timing with your broker or lender, especially if you are under pressure to exchange quickly.
3. Exchange contracts
Exchange is the point at which the parties enter the contract. The purchaser typically pays a deposit. For many residential private-treaty purchases in NSW, a five-business-day cooling-off period applies, but there are important exceptions. It may be waived by the purchaser using the required solicitor or conveyancer certificate, or altered by agreement. It does not apply to purchases at auction. Off-the-plan residential purchases generally have a different period.
You should not assume you can change your mind without cost. A purchaser who rescinds during an applicable cooling-off period generally forfeits 0.25% of the purchase price.
4. Complete enquiries before settlement
After exchange, the legal and financing work continues. This may involve verifying identity, completing property searches, reviewing mortgage documents, preparing transfer and duty arrangements and responding to requisitions or settlement requirements. The work required depends on the property and the contract. Delays can occur where finance, discharge of an existing mortgage or outstanding documents are not ready.
5. Understand settlement
Settlement is when the balance of the price is paid and ownership is transferred. In NSW, a period of around six weeks is common, but the contract controls the agreed settlement date and it may be shorter or longer. Your solicitor or conveyancer coordinates the legal steps and the electronic settlement process with the relevant parties.
What happens if something goes wrong?
A finance delay, unexpected defect or inability to settle can have serious consequences. The options are determined by the contract and the circumstances; they are not always the same for every purchase. Tell your solicitor as soon as you become aware of a problem, rather than assuming the settlement date will move automatically.
Before you sign
Ask what searches and inspections are appropriate, whether you have a cooling-off period, what deadlines apply and which costs fall due before settlement. Dawson Pouwhare can assist with contract review and the conveyancing process from exchange through to settlement.
Legal disclaimer: This article contains general information about Australian and NSW law and is not legal advice. It may not reflect changes in the law or your individual circumstances. You should obtain advice about your situation before acting on this information.
