What to check for when exchanging contracts.

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What to check for when exchanging contracts.

While both the buyer and seller may be happy with an offer, the deal is not sealed until both parties each sign copies of the contract for sale and exchange them.

Have you reviewed the contract?

This step should be done before making or accepting an offer; however, as the document has legal implications, it’s essential to do a final review before signing on the dotted line. Check over the finer details and make any necessary amendments for your agent to raise with the other party. Once all revisions are accepted and finalised, it’s time for the exchange.

Are the contracts ready to be exchanged?

Exchanging contracts is the legal part of selling and buying. Each party must sign their acceptance of the contract. At auction, exchange happens immediately after the winning bid is accepted. For private treaty sales, each party signs separately. The buyer and seller are legally bound once the contracts are exchanged.

Do you have the deposit ready?

At the time of the exchange, the buyer must be prepared to pay a deposit. Deposits are usually calculated between 5% to 10% of the purchase price, typically made by electronic funds transfer, and within 5-10 business days of the contract exchange.

Have you got your conditions in order?

If applicable, you should immediately contact your finance broker to start the finance approval process. Do you need to engage building and pest inspection services? Ensure all other conditions on the contract are completed by their due date.

Are you prepared for settlement?

A sale contract will typically outline a settlement day. Settlement is the conclusion of the sale transaction and usually takes place three to four weeks after all conditions have been completed. At settlement, the buyer will need to pay the seller all outstanding costs to ‘settle’ the property purchase.

Buyers and sellers don’t typically need to attend settlement in person; instead, solicitors, conveyancers/ settlement agents and bank representatives meet to exchange the necessary payments and documents. The amount owed takes into account the outstanding purchase amount (minus the deposit) as well as some bill and tax calculations.

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