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Best advice on Negotiation

How should I deal with offers?
In all cases- talk to us.

Try to avoid any direct negotiation with buyers, which may become uncomfortable and also put you in position of accepting a lower price than we, with our expertise would be able to negotiate for you.

What sort of offer should I consider?
In most cases it is expected that there will be some degree of negotiation, but you should be realistic – given the market at the time and your need to sell. Remember that early offers are often the best.

What do terms and conditions mean?
The contract of sale sets out the terms and conditions of the sale, such as inclusions and exclusions, and other particulars of the property.

What are inclusions and exclusions?
Inclusions are items which you include with the sale of your property, for example- floor coverings, curtains or kitchen appliances. Exclusions are items that you are not including with the sale of your property, for example- dishwasher or gas heater.

Your guide to Gazumping

What does it mean?
Gazumping is when you have accepted an offer for your property – but before contracts are exchanged, another buyer makes a higher offer or offers better terms. It can also occur when a seller encourages competing buyers to offer increasingly higher prices. This can be frustrating, for buyers especially if they have incurred costs for inspections etc. But it is not illegal.

When is your property off the market for sale?
When you accept an offer and exchange contracts with the successful buyer.

Signing Contracts

Is your property off the market now?
No. When a buyer signs a copy of the contract, to buy your property this simply indicates their interest in buying. Until exchange of contracts has occurred, your property is still on the market and available for anyone to buy.

Under current legislation, the most sensible way to secure the sale of your property is to exchange contracts as quickly as possible. This is generally best achieved by allowing us to conduct the exchange of contracts.

Should my solicitor or conveyance review the contract?
It is not a legal requirement, and it is entirely at your discretion, but as the contract has prepared by your solicitor or conveyancer on your behalf, as your agent we will only fill in the sales price and the buyers particulars. No changes will be made without your approval or consent.

Are both contracts the same?

Yes, and once we have two identical signed contracts (one signed by you- the seller, and one signed by the buyer) we can then ‘exchange’ the contracts by firstly checking, and then dating them.

Exchanging contracts

What does exchange of contracts mean?
There are two copies of the contract - one for you and one for the buyer. You each sign your copy of the contract, they are dated, then swapped or ‘exchanged’. Only when both the seller and the buyer have signed contracts and exchanged copies do you both become legally bound by the contract.

How much deposit does a buyer have to pay and when is it paid?
Depending on who attends to the exchange of contracts. The buyer must pay the deposit prior to the exchange of contracts taking place. An Agent’s exchange- At Auction or Express Sale a buyer must pay a deposit of- 10% of the sale price. With Private Treaty sale buyer must pay a deposit of- 0.25% of the sale price and then the balance of 10% prior to the Cooling-Off-Period expiring.

With a Solicitor exchange– 10% deposit of the sale price.

What happens to the deposit afterwards?
The deposit will either, be held by us, invested in an interest bearing deposit or released to you- the seller for the purchase of another property. The contract will stipulate the deposit details, as well as the Cooling-Off period and Settlement date.

When does exchange of contacts occur?
It occurs once you have accepted the buyer’s offer and agreed to take the property off the market.

Cooling-Off Period

What is it?
It is a legal requirement that Real Estate agents in NSW exchange contracts in a Private Treaty Sale with a Cooling-Off Period.

It allows a buyer to arrange building and pest inspections and bank valuations without running the risk of being gazumped. It entitles the buyer, to withdraw from the purchase within 5 business days after the contracts are exchanged.

However, if the buyer does not continue with the purchase, they will forfeit 0.25% of the purchase price from the deposit they have paid. The good news is that around 80-90% of sales proceed following the Cooling-Off Period. And remember that with auctions there is no Cooling-Off Period.

When does the Cooling-off-Period start?
It begins the next business day after the exchange of contracts.

What happens afterwards?
Assuming the buyer doesn’t change their mind during the 5-day Cooling-Off Period, you can start to plan for settlement.

Inspections & Bank Valuations
What are they?
Inspections are done by experts to check for possible problems with the property- pests such as termites; structural problems or subsidence; rot or damp; and the general condition of the property.

Bank Valuations may be required by the buyer’s lender, to check the property’s worth as a security against their loan.

When do they occur?
They occur as soon as the buyer is sufficiently interested in your property or even following the exchange of contracts. We will advise you if and when they will take place.

What happens afterwards?
The buyer will decide whether your property is a good buy and whether they wish to proceed with the purchase. Sometimes defects and information discovered from these inspections may be used to re-negotiate the purchase price.

Can the buyer get their deposit back if the inspections show problems?
If a buyer has not exchanged contracts they can get their deposit back in full. If they have exchanged contracts they will forfeit their deposit if they do not proceed.

What if their Bank Valuation is low?
The buyer may decide to shop around. They may try to negotiate a lower purchase price or they may use the Cooling-Off Period to withdraw from the purchase. Or in most cases, they may decide that the property is still a good buy and proceed with the sale. We will keep you advised and do all we can to complete the sale for you.

Should you get your own inspections?
This is a great idea! By obtaining your own pest and building inspections before putting your property on the market, you can correct any problems and avoid being caught out later– when you could lose money in negotiations.

Section 66W Certificate

What is it?
It is an agreement that waives the buyer’s right to the usual Cooling-Off Period. Typically, it is requested by a seller when you want a quick settlement, or a buyer is eager to close the sale. The buyer’s solicitor or conveyancer must sign it.

When does it happen?
It is usually included in the contract of sale, as one of the terms & conditions, but it may come up as a negotiating tool when there are competing buyers.

What happens afterwards?
Once the buyer’s solicitor or conveyancer signs it, both buyer and seller can sign each of their contracts. Contracts are then dated and exchanged and the sale becomes unconditional.

Solicitors’ or Conveyanver’s Exchange

What is it?
When the exchange of contracts takes place through our agency, the standard Cooling-Off Period usually applies. But, when it is handled by solicitors, it usually involves a Section 66w Certificate (see above).

When does it happen?
A solicitor’s or conveyancer’s exchange occurs when all of the appropriate inspections, bank valuations, and buyer’s enquiries and searches have been satisfied and the 10% deposit is paid by the buyer and contracts have been signed by both parties (both seller and buyer).

What happens afterwards?
The buyer’s solicitor or conveyancer hands a Section 66w Certificate to your solicitor or conveyancer and the Cooling-Off-Period is waived. The sale becomes unconditional – meaning that both parties are legally bound to proceed with the sale.

Unconditional Exchange to Settlement

What is it?
Unconditional sale or unconditional exchange is the point at which the contract becomes legally binding.

When does it happen?

Private Treaty Sale- 
When the 10% deposit has been received from the buyer and the Cooling-Off-Period has expired.
When the 10% deposit has been received from the buyer and contracts.
Express Sale-
When the 10% deposit and Section 66W Certificate has been received from the     buyer and contracts have exchanged.

What happens afterwards?

We will put up a sold sign at the front of your property. Congratulations your property is SOLD! - and you can start to plan for settlement.

What is a Final Inspection?
It is an inspection that is carried out by the buyer prior to settlement occurring to ensure the property is in the same condition as when they exchanged contracts, so there is no delay to settlement occurring.

When is the Final Inspection?

Usually the day or a few days prior to settlement – it is the buyer’s final chance to confirm that the property is clean and exactly as you agreed to sell it. This is when you should provide us with keys, for us to give to the buyer on the day of settlement day.

What happens on Settlement day?
Settlement takes place when the buyer pays the balance of the purchase price. Adjustments are made for costs like water and council rates, strata levies; (if applicable) and any outstanding mortgages you may have, are paid out from the settlement monies. Once this is all ‘settled’ the buyer becomes the legal owner of the property and you must have vacated your property completely.

When can the buyer move in?
The buyer can collect the keys from us and move in that day. However, organising a move on settlement day itself can sometimes be difficult, as there may be last minute issues which delay settlement by hours or even days. So if possible we advise sellers and buyers not to plan on moving in on the day of settlement.

When do I stop receiving the rent, if I sell an investment property?
The rent ceases being yours from the date of settlement.

Our Fees & Your Money

How and when does Best Real Estate get paid?
When your property settles, we are then permitted to release monies held in our trust account once we receive a document from the purchaser’s solicitor called an ‘Order on the Agent’. This legally allows us to disperse monies held in our trust account on your behalf (originally paid by the buyer prior to exchange of contracts).

Your Money?

Our selling fee, marketing costs and all other monies paid out on your behalf will deduct from our trust account from monies held in trust on your behalf. The balance of monies that you are entitled to are dispersed to you in form of a cheque.

The balance of monies from the sale price are handled by your solicitor or conveyancer on settlement day. Any outstanding mortgages or other ‘adjustments’ are paid out and the balance of monies are paid to you by your solicitor or conveyancer.