Buying your home
You will not usually pay for the services of an agent, unless you use a buyer’s agent (or advocate). During all your dealings with an agent remember that they are being paid a commission to get the best price for the seller.
Research market prices
Research what properties are worth by finding out the sale prices of other, similar properties in the same area. It is against the law for an agent to falsely underestimate the selling price of a property. This can be a dishonest way to keep you interested in a property.
Building and pest inspections
Consider getting experts to inspect the condition of any property you would like to buy as it can save you time and money later on. A building inspection should tell you about any significant problems and a pest inspection should tell you if there are termites or other pests present on the property.
Before making an offer
Ensure your licensed conveyancer or solicitor examines the sale contract before you make an offer.
Making an offer
If you make an offer and are asked to pay a fee as an ‘expression of interest’, under the law, the agent must tell you if another offer is received and give you the chance to increase your offer. If you don’t end up buying the property, the agent must refund the fee.
Paying a deposit
When you exchange contracts, you must pay a deposit, (usually 10% of the sale price) by bank cheque or a deposit bond. This is held by the agent in a trust account until the sale is finalised, so it makes sense to be certain that the agent is properly licensed.
Changing your mind?
After you exchange contracts on a property bought by private treaty, there is a 5-day cooling-off period if you change your mind. If you exercise your cooling-off rights and withdraw from the contract, you will have to pay the seller 0.25% of the purchase price. This works out to be $250 for every $100,000. However, if you buy at an auction, or exchange contracts on the same day as the auction after the property is passed in, there is no cooling-off period.
Buying at auction
The agent must give you information from Fair Trading about the auction process. If they don’t give you a fact sheet called Bidders guide you can download one from the Fair Trading website. At an auction, ‘dummy bidding’ is against the law. This means that the auctioneer and/or agent can’t invent bids to push the price up. The seller of the property is entitled to make one bid, or have one bid made on their behalf. The auctioneer must announce when the seller’s bid is made.
Settlement, or completion of the sale process, usually takes place 6 weeks after exchange. You then become the legal owner of the property. The balance of the purchase price and other adjustments are paid on this date.
Information provided courtesy of NSW Fair Trading