What is a cooling-off period?
The cooling-off period starts from the date of exchange of contracts and ends at 5.00 pm on the fifth business day after the date of exchange of contracts.
The purchaser may rescind (“cancel”) the contract any time during the cooling-off period by giving notice in writing to the seller/seller's conveyancer. The purchaser must then forfeit (“pay to”) the seller an amount equal to 0.25% of the purchase price.
The seller does not have a cooling-off period – it is a benefit available only to the purchaser.
The cooling-off period was introduced to allow the purchaser to obtain commitment under a contract from the seller and then spend money on inspection reports, finance approval etc. knowing that the seller could not accept another offer for the property.
How long does the whole purchase/sale take?
The usual completion time under a contract is 4-6 weeks from the date of exchange.
When do I get the keys for the property?
The keys for the property are available for you to collect on the day of settlement immediately settlement has happened. The keys are usually available at the selling agent's office. The agent will be notified that settlement has taken place and will be authorised to release the keys to you.
If the purchase has been negotiated without an agent ie directly with the seller, then usually you will collect the keys directly from the seller or alternatively we will collect the keys at settlement from the seller's conveyancer for you.
Does the seller have to have the property professionally cleaned?
The seller must maintain the property during the period of exchange of contracts and settlement – subject to fair wear and tear of the property; and usually the purchaser is entitled to “vacant possession” of the property (unless there is a tenant in the property). This means that all the seller's belongings (including any rubbish) should be removed from the property prior to settlement.
Just prior to settlement, the purchaser should carry out a final inspection of the property to make sure that it has been maintained and that vacant possession of the property is available. If there is any issue in this regard the purchaser should immediately contact their conveyancer so that the appropriate steps can be taken to resolve the matter prior to settlement taking place.
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When is the deposit paid?
The deposit for purchase of property must be paid on exchange of contracts and is usually in the amount equal to 10% of the purchase price unless the seller has agreed to accept a lesser amount.
If there is a cooling-off period, then the deposit must be paid before the cooling-off period expires.
When is stamp duty paid?
Stamp duty must be paid within three months of exchange of contracts otherwise penalty interest for late payment of stamp duty will be incurred.
However, stamp duty must be paid on or prior to settlement of your contract so that the transfer can be registered. So if your settlement period under the contract for purchase is less then three months ie is the usual 4-6 week settlement period, then stamp duty must be paid on or before settlement of the contract.
When do I have to insure the property?
The seller of the property is responsible for the risk of damage to the property until settlement of the contract has taken place – unless the purchaser has taken possession of the property prior to settlement.
So the seller should keep the property insured until completion and the purchaser is not required to have insurance in place until the completion date.
However, if the purchaser is borrowing money then the purchaser's bank will require evidence of insurance prior to the bank being in a position to settle.
If the seller has agreed to allow the purchaser to take possession of the property prior to settlement, then the risk of damage to the property becomes the risk of the purchaser and the purchaser must have insurance at the time of taking possession of the property.
How do I pay for the property?
The seller of the property is entitled to receive the settlement moneys in the form of bank cheques. If you are borrowing money, we will provide the purchaser's bank with a list of the cheques required for settlement.
If the purchaser is not borrowing money there are two ways that the settlement moneys can be paid:
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We will request the purchaser to transfer the settlement moneys – including stamp duty and conveyancing fees – to the credit of Key2 Conveyancing Pty Ltd trust account and we can then arrange for the required settlement cheques; or
We will give the purchaser a list of the cheques required and the purchaser can obtain bank cheques from their bank and deliver/post the cheques to our office in readiness for settlement.