When purchasing a property, the most critical step occurs before you sign anything at all.

Reviewing the contract. Under New South Wales law, a vendor must have a contract for sale prepared before a property is offered for sale. That contract sets out the terms of sale, the inclusions, and the prescribed documents, including the title, the planning certificate and any drainage diagram. It will also contain special conditions, that is, additional clauses that amend or supplement the standard contract terms to suit the particular sale. These may vary the deposit or settlement period, impose obligations on either party, allocate the cost of repairs or compliance, or make the sale conditional on certain events. Special conditions are where risk most commonly arises, precisely because they depart from the standard terms. A poorly drafted or overlooked condition can leave you bound to obligations you did not anticipate, liable for costs you expected the other party to bear or exposed if a condition you were relying on is not satisfied. Their effect is not always obvious on a plain reading, which is why each one should be examined closely before you commit. We review the contract on your behalf before you commit to the purchase, advise you on its effect, and negotiate amendments where this is necessary.

Cooling-off rights. Where you purchase a residential property by private treaty, you are generally entitled to a statutory cooling-off period of five business days following exchange of contracts. Should you elect to withdraw within that period, you will forfeit 0.25% of the purchase price. As such it is important to carefully consider your position before signing any contract document. No cooling-off period applies where a property is purchased at auction, or where you have signed a section 66W certificate waiving that right. We advise you on the operation of these rights before you bid or sign, to avoid any unexpected cost.

Searches and enquiries. We conduct the searches necessary to confirm precisely what you are purchasing, including additional information recorded by council, whether any registered interests affect your use of the land and whether there is any anticipated upcoming development applications which might affect the property that you are not aware of.

Exchange and deposit. Once both parties have signed and contracts have been exchanged, you are contractually bound and the deposit, usually ten percent of the purchase price, becomes payable. The full ten percent is the default position, but the amount and timing can be negotiated as a special condition. A vendor may, for example, agree to accept a reduced deposit of five percent on exchange, or allow the deposit to be paid in instalments or released early to fund the vendor's own onward purchase. Any such arrangement should be documented in the contract before exchange so that both parties are clear on what is payable and when. The matter then proceeds toward settlement.