When you sign a contract of sale for a property, it is an exciting moment as it marks the start of the journey towards homeownership. However, it is essential to understand what happens after signing the contract to ensure a smooth transition and avoid any surprises.
1. Deposit
After signing the contract, the buyer is required to pay the deposit, which is usually 10% of the purchase price. The deposit is held by the seller`s solicitor or conveyancer in a trust account until settlement. If the buyer fails to settle, they may lose their deposit unless otherwise specified in the contract.
2. Cooling-off period
In some states, buyers are entitled to a cooling-off period, which allows them to withdraw from the contract within a specified period, usually five to ten business days. During this period, the buyer can terminate the contract without any penalty, although they may still be liable for certain costs.
However, the cooling-off period does not apply to auctions or where the buyer has waived their right to it. It is essential to verify the cooling-off period`s terms and conditions with your solicitor or conveyancer before signing the contract.
3. Conveyancing
After signing the contract, both the buyer and seller engage the services of a solicitor or conveyancer to handle the transfer of the property`s ownership. The conveyancer prepares the necessary legal documents, conducts searches, and liaises with the relevant parties to ensure a smooth transaction.
4. Settlement
Settlement is the day when the property ownership is transferred from the seller to the buyer. The settlement date is usually specified in the contract and can range from 30 to 90 days from the contract`s signing.
On the day of settlement, the buyer pays the remaining balance of the purchase price, and the seller delivers the property`s keys and legal documents to the buyer. Once settlement has taken place, the buyer becomes the legal owner of the property.
In conclusion, purchasing a property can be an exciting experience, but it is essential to understand what happens after signing the contract of sale. From paying the deposit to settling the property`s ownership, the process can be complex, and it is crucial to work with an experienced conveyancer or solicitor to ensure a smooth transition.