Guide to Buying a Home in New South Wales, Australia

Buying a home is one of the biggest financial decisions you will ever make. Making an offer and entering into the process of buying a property can seem daunting. However, your solicitor can help guide you each step of the way.

This guide outlines the process for buying a home and how your solicitor can help you. It also highlights some of your legal rights so you can buy with confidence.

What happens before I buy the property?

Buying a property by private treaty

The most common way to buy property in NSW is by private treaty. Private treaty is where a seller will advertise how much they would like to be paid for the property and then enters into negotiation with prospective buyers.

Under a private treaty the contract is not binding until contracts have been exchanged between buyer and seller. When this happens you will also have to pay the full deposit on the property – usually 10 per cent of the price minus any holding fee you may have paid.
There will usually be a 'cooling off' period in the contract. This gives you time to change your mind about the sale.

Buying at auction

At an auction there is usually no cooling off period. This means that if you are the highest bidder, you are usually bound to go through with the purchase.

Therefore, it is important that you have a solicitor read over the contract for sale before making a bid. Your solicitor will be able to identify any terms in the contract that may not be in your favour and may be able to negotiate with the seller's solicitor to change them.

They can also advise you as to whether what you are buying is what you are expecting.

Buying under strata title

Click to read our quick guide to strata title.

The Contract for Sale

When you purchase a property in NSW, much of your rights will depend on the contract.

There are also however certain things that the contract must do. For example: properly identifying the property, outlining the terms on which it is being sold and have attached a number of documents. The most common of these documents are:

• a zoning certificate
• a diagram of drainage showing any sewer lines
• a copy of the property certificate
• a copy of the plan for the land
• copies of any documents relating to easements, rights of way, or any restrictions or covenants

Where the property is subject to strata title, the contract should also have attached:

• a copy of the property certificate and strata plan
• a copy of by-laws concerning the use of common property

Negotiation of Contract Terms

Many of the terms in your contract for sale will be 'standard' contract terms – this means they have been used for a long time and are generally fair to both the buyer and the seller.

However, you do not have to buy on these terms. You could ask your solicitor to negotiate some of these terms to be in your favour. Your solicitor will also check that not only is the contract legal, but also that is terms are most favourable to you.

What's included in the sale?

Unless the contract specifically states otherwise, the property is sold 'in the state you find it'. This means that any fixtures of the property are also included in the sale. A fixture is anything that cannot easily be taken down without causing some kind of damage to the property. Where there is any area of doubt, your solicitor will ensure this is expressly provided for in the contract of sale.

What does it mean to buy a property?

When you own a property, you have what is known as 'title' to it. This means that after you purchase the property your name will appear on the Certificate of Title or deed.

Most land in NSW operates under Torrens Title, this mean that your solicitor will have to register this certificate at the Lands Title Office so the world at large know you to be the owner.

When you purchase a house or apartment in NSW you get one of the following:

• Freehold – This gives you ownership over the land and the buildings on that land.
• Leasehold – This means you have ownership of the land and the buildings on it for a certain period of time (often 99 years).
• Strata title – This will usually apply to apartments or town houses and also gives you the rights to the airspace in your unit.
• Company title – This is a less common method of apartment ownership. You essentially buy 'shares' in a company and this, in turn, entitles you to the use of an apartment.
• Community title – This will often work in combination with strata title on large developments. This will gives you and the other owner's rights to common land.

What happens at settlement?

When you sign the contract for sale you will usually agree on a settlement date. Often this is around six weeks after the date of exchange.

On the settlement date, you are required to pay the seller everything that is owed to them – this 'settles' the purchase of your home.

The amount owed will take into account Council rates, water rates, strata levies (if a strata property) and land tax (if any).

If you are for any reason unable to settle on the date that is stated in the contract for sale, it is likely that you will be charged interest. In certain circumstances, the seller may even cancel the sale and retain your deposit.

If it seems like it may be a possibility that you will be unable to make the settlement date, you should let your solicitor know as soon as possible and they may be able to come to an arrangement with the seller's solicitor.

Contact Us

If you are thinking about buying a property or for any other matters relating to property transactions or property disputes, contact Szabo & Associates Solicitors today. At Szabo & Associates Solicitors we can advise on all aspects of property law. Call us on (02) 9281-5088 or fill in the contact form to the right of this page.