Buying your new home FAQs
A quick guide for what you need to know about buying your new home.
What is a cooling off period?
A cooling-off period allows a purchaser to exchange on a property with a holding deposit of 0.25% of the purchase price and allows them time to carry out any necessary due diligence such as loan approval, strata report or pest and building inspection. It is typically 5 business days and is a period in which the purchaser can cancel the contract. Should the purchaser decide not to proceed with the purchase, they will forfeit their 0.25% deposit.
How much deposit do I need to bring along to secure a property by Auction?
Prior to attending an Auction, your solicitor should have reviewed the contract and requested any necessary amendments. The standard Contract provides for 10% deposit to be paid if you are the successful purchaser. However your solicitor can vary this by requesting a 5% deposit instead. If approved by the vendor, you simply write a cheque for 5% of the purchase price once you have secured the property.
What's the best strategy for being a successful bidder at Auction?
There are any different strategies for bidding at Auction and it's best to choose the one you feel most comfortable with. Regardless of which strategy you use, you should always set yourself an absolute walk away figure so you don't overpay. Then, make a strong, confident opening bid to get the Auction rolling - no point delaying the inevitable! The secret is ... do not hesitate between bids. Each counter bid should be made quickly and without hesitation. This will give the impression of deep pockets and make the competition uneasy. If the property is to pass in, you should always hold the highest bid so you have first option to negotiate afterwards
What is the difference between exchange and settlement?
Exchange is the first stage of securing the property. Both vendor and purchaser both sign identical copies of the contract and the purchaser provides a deposit cheque. The actual exchange is when both documents are checked to be identical in the hands of either the agent or solicitor, and both copies are then dated. Settlement is usually 6 weeks after exchange and is when the purchaser pays the balance of the purchase price to the vendor and is able to collect the keys.
What happens if I can't settle on the purchase?
In NSW, in the event that the purchaser cannot settle on the settlement date, the vendor can charge penalty interest for each day that settlement is delayed and also issue what is commonly known as a Notice to Complete. This gives the purchaser an additional period of time (usually 14 days) to settle. If the purchaser is still not able to settle by that date, the vendor may terminate the contract and the purchaser's deposit of 5% or 10% is forfeited. The vendor may also exercise their right to sue for damages.