Selling a house - top 10 questions
1. What are the legal steps in a normal conveyance?
There are a number of steps in a standard conveyance, although they vary from State to State:
- Prepare contract and other disclosure documents (depends on your State)
- Exchange contracts
- Tell mortgagee about the sale
- Answer Requisitions on Title
- Receive and sign Transfer of Land
- Arrange mortgage discharge Settlement
2. Who does conveyancing?
Mainly solicitors. In some states there are also licenced conveyancers. There are also do-it-yourself kits produced for some States.
When you are deciding which to use, some of the issues you should think about are:
- What's the cost?
- What protection is there if they make a mistake?
- Is there indemnity insurance which covers faulty work?
- Are there other issues that you may need advice about?
- Does the conveyancing looks straight forward (are there caveats, covenants, has the house been owner-built)?
- Do you have the time and energy to do-it-yourself?
3. What if there is a caveat on the title?
A caveat is a sign that someone else claims a financial interest in the property.
If there are any caveats on the title, the buyer will probably ask you why it is there and what will be done about it. The buyer may make the withdrawal of the caveat by settlement a condition of the contract.
4. What if the buyer wants to settle early?
All the better – as long as you can move out in time it gives you the cash earlier.
5. Should I let the buyer move in before settlement?
Beware! You certainly don't have to do this. If you're happy for this to happen, get advice to make sure you don't compromise any rights in relation to the settlement.
You would also need to clarify the legal basis on which they are living in your property, i.e. are they tenants or living there under a licence? Check how it affects your insurance.
6. What happens if the buyer can't settle by the due date?
You may be able to claim compensation – the interest rate should be written in the contract.
7. Does capital gains tax apply to the sale of houses?
Not if is it your home i.e. your principle place of residence or your bought the property before 20 September 1985. To check your specific situation, you must get professional advice (e.g. your accountant).
8. Can I negotiate the commission with the agent?
Yes – and you should, or else get a friend/relative who understands these issues to help you negotiate the best rate. For instance, the agent may get a discount for news classifieds - you may be able to negotiate to get part of this. Go shopping for an agent, but be careful to compare "apples with apples".
9. What if my lawyer makes a mistake?
Good question. All legal practitioners in Australia are covered by indemnity insurance, that protects you against losses. You must satisfy yourself that a licensed conveyancer is covered if they make a mistake.
10. Can I put extra conditions in the contract?
Yes. Your advisor will usually know what conditions to add. They could include, a change to the completion date, early release of deposit, penalty payments if the sale is delayed etc.
Last Updated – April 2010
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This fact sheet is intended to be general information about the law in Australia. It is not a substitute for legal or other professional advice. Lawscape Communications Pty Ltd and Fairfax Digital Ltd do not accept responsibility for loss to any person, who either acts or does not act because of this fact sheet. Last Updated - October 2005