What happens after we’ve accepted an offer to buy our home?
Well, first of all, Congratulations! All the hard work in presenting your home for sale is almost complete, but there are a few things left to take care of after you accept an offer on your home.
The Contract Of Sale
Contracts will be prepared by your Solicitor/Conveyancer or Estate Agent and will be sent to the buyer to sign first, generally. The buyers have a cooling-off period of 3 business days in Victoria on residential properties. Properties purchased at auction don’t apply. Buyers are free to change their mind during the cooling-off period.
If the purchaser is buying your home subject to building inspection or pest inspection, then the contract will be known as a “conditional contract“. That means until the purchaser has had their building inspector and pest inspector confirm that there are no structural or pest issues, that they can cancel the contract. Sometimes there are some issues which the buyer may require the contract price to be renegotiated.
The majority of buyers have a finance condition on purchasing a home, even though they have pre-approval on their loan – this is to allow the banks to do their due diligence and have a professional valuation completed. A professional valuation is based on market analysis of similar homes which have sold nearby. The bank employs Valuers to provide an independent assessment of the sale price.
Once all the conditions have been met, then the contract becomes unconditional, and it is at this stage that you can really celebrate and start packing up.
Contract to Settlement
The buyers may pay a holding deposit prior to the contracts being drawn up, and then the balance of the deposit on signing of the contract. These funds are held in the Estate Agents trust account until settlement. As the seller, you are unable to access these funds until settlement time unless you apply for an early release of the deposit funds (also known as a Section 27 in Victoria). The release document is prepared by your Solicitor or Conveyancer. If you are buying a new home, you may appreciate having access to this money earlier.
The buyer is entitled to inspect the property 2-3 days before settlement to make sure that it is still in the same condition as when they purchased the property. Don’t panic though, they understand that you will be packing things at that point and the house may not be clean and tidy.
On settlement day you should drop all your keys into your Estate Agents prior to settlement so that they can be provided to the purchaser once the settlement is completed.
At an agreed time Solicitors, Conveyancers and Banks via an electronic processing system called PEXA confirm that all documents and funds have been received. Neither the buyer or the seller needs to be present.
Your legal representative or conveyancer should contact you to let you know if settlement went through successfully. Sometimes settlements are delayed for various reasons. If this happens, your legal representative will reschedule and let you know.