In the ACT, a seller of a residential property must provide certain documents and reports before the property is offered for sale. The availability of this information to prospective buyers is to minimise the delay between a prospective buyer inspecting a property and then making an offer on the property. Of this documentation, the contract for the sale of residential property (marketing contract) sets out the rights and obligations of the buyer(s) and the seller(s).
A typical process in purchasing a residential property in the ACT would be:
- Finance approval: Ensure you have your finance approval in order so you know how much you can afford when looking at properties to purchase.
- View properties: Visit open houses or make an appointment to view a property where an open house is not advertised. Try to view a number of properties to assist you in learning the types of properties available within your budget and to help you get a feel for the prices that properties in your preferred area(s) are selling for.
- Request a copy of the contract for sale: If a property is of interest to you, request a copy of the marketing contract to review. You can also engage a solicitor to review the contract documentation on your behalf if you wish.
- Making an offer: When you have found a property you would like to buy, make an offer to the real estate agent representing the seller(s), or directly to the property owner in the case of a private sale. The agent will discuss your offer with the property seller(s) who may either accept your offer; decline your offer outright; or make a ‘counter-offer’ to you for a revised sale amount that they would be willing to accept (this is known as negotiation). It is important to note that your offer is not legally binding on you or the seller(s) of the property until an exchange of contracts has taken place.
- Exchanging contracts: An exchange of contracts occurs when a contract signed by a buyer(s) is handed over in exchange for a contract signed by the seller(s). This process is usually conducted between solicitors/conveyancers representing each party. It is at this stage that a deposit (usually 10% of the purchase price) must have been paid and that legally binding contractual obligations are made on each party.
- Insurance: Once the sale contract is exchanged, it is the responsibility of the buyer(s) to insure the property (both building and contents insurance). It is advisable to check on your insurance situation with your solicitor.
- Pre-settlement Inspection: You are entitled to inspect the property you are purchasing about one week prior to settlement, or at reasonable other times with reasonable notice. These inspections should be organised with the selling agent and are conducted to ensure that the property is in substantially the same condition as it was when the offer was made initially and that any goods/items intended to be sold with the property remain at the property.
- Settlement: The finalisation of the sale/purchase usually occurs at settlement once all the relevant checks have been made, the property title and transfer documents exchanged, and the balance of the purchase price has been paid. Once settlement is completed you can obtain the keys and take possession of the property.
If buying at auction, the typical process would be:
- Finance approval: Ensure you have your finance approval in order - as should you be the successful bidder at an auction you will be required to sign a contract and pay a deposit immediately following the auction.
- Registering to bid at auction: Buying a property by auction requires all potential bidders to register prior to making a bid. Registration at an auction requires you to provide certain information about yourself, as well as a proof of identity (usually a drivers’ licence or passport). Once you are registered for the auction you will be given a bidder number. If you are intending to buy the property jointly with another person (such as your spouse or partner) only one of you needs to register. Registering and obtaining a bidder number does not obligate you to make a bid, it simply gives you the right to do so.
- Bidding at auction: when making a bid at an auction make sure the auctioneer is able to see you clearly. Show your bidder number so that your bid is recorded correctly against you. Remember that there are strict legal obligations around making a bid at auction and that if you are the highest bidder that the property may be sold to you.
- Signing the contract and paying a deposit: If you are the successful bidder at an auction, you will be required to sign a contract and pay a deposit immediately. Contracts are then exchanged at that time. Please note that no cooling-off period applies when buying at auction.
Information contained within and/or provided by this site is purely general real estate information in nature and is not intended to be – nor should be taken to be – legal advice or accounting/financial advice of any kind. You should always seek appropriate legal and accounting/financial advice from a qualified practitioner. Any reliance on the information provided by this site is solely at your own risk.