1. Sign a sale and purchase agreement
Once you’ve got pre-approval from your bank and found the house you want to buy, it’s time to make an offer. Remember to talk to your solicitor about the offer you’re making and ask them to read over your sale and purchase agreement. You should also ask them what conditions you should include – like a Land Information Memorandum (LIM), building inspection, certificate of title check, valuation and you obtaining finance. Your solicitor will help you understand what your obligations are under the agreement and what happens if you don’t meet them. They’ll also explain what the vendor’s obligations are.
You’ll make the offer through a real estate agent or a private vendor by completing a sale and purchase agreement. This will include things like:
- The names of the buyers and the vendor
- Chattels included with the home
- Offer price
- Conditional period and unconditional date
- Deposit amount
- Possession date
The real estate agent will help you complete the sale and purchase agreement, and then present it to the vendor.
The vendor might then make a counter offer (an amendment to any terms and conditions of the sale and purchase agreement). Counter offers are commonly centred on price and conditions.
When both you and the vendor come to an agreement, both parties initial the changes to acknowledge them.
Once a final agreement has been made in regards to the purchase price, the vendor will sign the sale and purchase agreement and you will need to pay the agreed deposit (usually 5% - 10% of the purchase price) to the real estate agent. If you’re buying the house privately, make sure your deposit is paid to your solicitor (rather than directly to the vendor) so that it can be kept in a trust account until settlement.
Conditional period: This is a specified timeframe to meet the conditions in the sale and purchase agreement. In this time you’ll need to ensure you can obtain finance to fund the purchase of the property. Generally the unconditional period is 5-10 days but it’s decided between you and the vendor at the creation of the sale and purchase agreement. If the conditions aren’t met by the unconditional date, you can withdraw your offer.
Go unconditional: Once the conditions have been met, your solicitor will contact the vendor’s solicitor and the agreement will become unconditional. Being unconditional means that you are legally obligated to buy the house.
Settlement is when the balance of the funds is paid to complete the purchase of the house and ownership is transferred from the vendor to you. This day is referred to as settlement day and the date is specified in the sale and purchase agreement. The time between going unconditional and settling may feel like a waiting game but there is a lot you can get done; you can use this time to give the landlord notice on your current property (if you’re renting), pack your house, finalise your finance, organise insurance and arrange for your utility accounts to be moved to your new property.