The rules of buying and selling are largely set out in the standard form contract as well as convention. The clauses in the contract govern what each party can require of the other in making their preparations to completion, including the time to be allowed. Many of the clauses operate to prevent trouble or to give protection if something unexpected occurs. A typical sale process is as follows:


After a period of marketing and through the seller's agent, the buyer and the seller reach agreement on the price of the house. Typically, the deposit is 10% of the sale price and is paid to the agent to hold as stakeholder pending completion. The deposit can be more or less than 10% of the sale price if the parties agree.

Sometimes it is reduced by the agreement if the sale is going to take a long time. If there is no agent (a private sale) the deposit is generally paid to the seller's solicitor. Upon receipt of the deposit the agent or solicitor will lodge the money into a trust account.

There are risks in paying it to the seller personally. Sometimes the parties agree to the deposit being invested until completion. In that case, agreement is also reached on who is to have the interest on it or in what way interest is to be shared.

A deposit bond can also be provided by at least one insurance company. The buyer pays a premium to the insurance company and a deposit bond is provided to take the place of cash. Generally speaking, the deposit bond guarantees that if the buyer defaults (see later), the insurance company will pay the amount of the deposit to the seller. Of course, the insurance company would then move to recover from the buyer the deposit it has paid. The real estate agent sends details of this to the solicitors acting for both parties on a form known as a sale listing.


The solicitors to give effect to the agreement on settlement (completion). The seller arranges for existing mortgages to be discharged and the execution of the transfer. The buyer makes all necessary searches, enquiries about the title, pays stamp duty and arranges for any future mortgage. Exchange then takes place.

A title search can be made at the LTO or electronically by your solicitor/conveyancer. A title search reveals the precise details of the property, the names of the owners, the use to which the property may be put and whether there are any encumbrances, restrictive covenants or caveats on the title.

The search should show whether any recorded easements such for the supply of electricity, right of way, water or sewerage are registered. An easement is the right of one landowner to use of the land of another for a certain purpose. To avoid any interference with such easements there are restrictions on building on the site of an easement.

An identification survey report shows where the house is in relation to the boundaries of the land. Sometimes a survey report is required by a lender. At an early stage of construction by a private builder, a survey must be lodged with the controlling authority to show that the building will be on the correct block and within the required distance of the boundary. Fences, garages, carports, retaining walls and the like are gen­erally not built at this stage. If you wish to be completely satisfied that there are no improvements which encroach from your neighbour's land onto yours or vice versa, you should ask your solicitor to have a sur­vey made before completion.

In NSW local councils control building construc­tion in various ways. The ACT is the only place in Australia where the control goes as far as the actual title to own the land. It is a term of the Crown Lease that there be no unapproved buildings on the land.

Many buyers have the house inspected by a building inspector to report on the quality of its construction and a pest exterminator to report on any evidence of pests such as white ants. If the agreement provides that the seller will build or complete the building of a new house, apart from any maintenance provisions, there is implied in the agreement a warranty by the seller that he/she has used proper materials and good workmanship. The effect of this warranty is that even after the time specified in any maintenance clause, you can still sue the seller for a breach of warranty if a defect can be shown due to bad materials or workmanship. You would need expert evidence to prove this.

If you are buying an established house, you buy it in its actual state of repair at the time agreements are exchanged. If the seller or his agent make any promises as to the quality of the improvements, you should ensure these are written into the agreement. You cannot later complain if you have failed to notice defects or if you thought the condition of the house or the goods (if any) to be better than they are. Prior to completion, you should satisfy yourself that the condition of the house has not deteriorated since you agreed to buy. The standard agreement gives you this right of inspection.

If, after exchange or completion you find defects of quality, others can be held responsible only if they wrongfully caused it or if they misrepresented the truth of the matter, even if innocently. If you believe you have such a claim, you should see your solicitor first.

The legal costs are cheaper in borrowing from a bank because banks prepare their own mortgages and in many cases, building societies do so as well. Most other lenders use solicitors and those solicitors' costs must be paid before the loan is made available.


Where there is no agent in the sale, the deposit is generally paid to the seller's solicitor. Also, often there is a clause included in the agreement to protect the seller from a claim by an agent for commission. If the seller did engage an agent but that agent did not introduce you as buyer to the sale then it is important to the seller that a statement to this effect is included in the agreement. The typical clause provides that the buyer confirms he did not see any agent in connection with the sale so that if it proves to be false, the buyer pays the commission.


After exchange the contract is certain. There is a need for parties to bind each other to sell and to buy so that they may act with certainty in making their preparations to complete the sale. The standard agreement contains a number of clauses to govern the situation between exchange and completion. The length of time for each stage will vary according to the complexity of the contract.

Settlement is the same as completion.

settlement – standard contract
standard contract for the sale of land
requisitions on title
adjustment for rates and taxes


Usually the agreement provides a date for completion. If a date is stated and for some reason completion does not take place exactly on that date, the seller cannot immediately terminate the agreement and claim a forfeit of the deposit and claim damages. However, if the agreement states that the date is "of the essence" then it can probably be enforced. It is seldom in the interests of a buyer to sign an agreement which makes the date for completion "of the essence". If completion does not take place on the (non essential) day originally agreed, you have two choices:
Where there is a fixed date for completion, the standard agreement fixes the period to run in a notice to complete. Where there is no fixed period for a notice to complete it must be for a reasonable time. What is a reasonable time is depends on the circumstances of each case.


A typical conveyancing practice is for completion to take place at the Land Titles Office. Some few mortgagees insist it take place at their own office. On settlement, the title travels one way and the money the reverse way. The lenders pass their money to the borrower.

The borrower puts that with any other money (and an au­thority to the agent to pay out the deposit) and gives it to the seller. In turn, the seller pays out the existing mortgagees (keeping the differ­ence). The title deeds and mortgages then come from the seller's mortgagees who hand each mortgage with a discharge to the seller who, in turn, gives the buyer the Certificate of Title and all the discharged mortgages together with the transfer. (The transfer is the authority to the Registrar of Titles to register the buyer as the new owner). In turn, the buyer passes his title deeds to the new mortgagee to register and to keep as security.

Generally, the money is paid by way of a bank cheque. If a bank is lending, it mostly pays over the whole of the balance of the purchase money on completion including the loan money. In other cases, the buyer's solicitor will have obtained the balance of purchase money from the buyer a day or so before completion.

Where a separate debt from the seller to you is to be paid on completion, it is clearer if you pay the whole of the agreed purchase price and then receive back a cheque for the debt, rather than taking the shortcut of paying only the difference. Keys to the house are handed over on completion unless the buyer has made other arrangements to obtain them from the seller or the seller's agent.


Where the seller gives you as buyer a notice to complete and you fail on to meet that notice, the seller may keep your deposit (up to 10% of the purchase price) and either: See:


Your solicitor will usually phone you to state that completion has taken place. That is followed by a letter setting out full details including the money paid over on completion and how it was calculated. Notices of the sale are then sent to the government. In the case of a unit, the buyer's solicitors notify the Body Corporate.


Generally, because of the Trade Practices Act (Cth) 1974, there is no fixed scale of charges for solicitors in a conveyancing matter. In practice, costs do vary from one solicitor to another. You should ask your solicitor about his fees before you engage him/her. As a buyer you should remember that under most, lending terms, you will be liable for the legal costs of your mortgagee's solicitors. You should ask about this. Those costs and your own solicitor's costs are generally expected to be paid before completion.


The buyer's solicitor's job is to ensure the buyer gets a good title to the land in accordance with the agreement. It is up to the buyer (and not the buyer's solicitor) to attend to all other matters incidental to buying a house including transfer of the telephone service, connection of electricity and gas, redirecting mail from the post office, complying with the Electoral Act, etc.

The power authority is responsible for bringing the supply up to the connection with the house. You should engage an electrician if you wish to check the condition of the wiring, the location of the meter box, loading capacity, etc. To connect the electricity you will need to sign a supply agreement.


The title deeds are entitled to be kept by the first mortgagee. If there is no mortgage some buyers put the deeds in a safe custody packet at their bank and others leave them in safe custody in their solicitor's strongroom. Most solicitors make no charge for doing this. All banks have a scale of charges in relation to keeping documents in safe custody and opening the safe custody packet. The amount of the charges in different circumstances differs from bank to bank so you should enquire from your own bank what it charges to keep your title deeds in safe custody for you.


Having bought a house, you may wish to improve it. Any improvement or alteration needs the prior approval of the controlling authority such as the local council. Generally, mortgagees re quire their approval to be given as well. After any work is completed, it is a good idea to send the certificate of completion and fitness for occupancy to your first mortgagee and ask it to attach the certificate to the Crown Lease. That way, it will be where it is needed when you come to sell.


Income Tax Assessment Act 1963 Part IIIA relates to capital gains generally. The broad effect of s160ZZQ is that a tax payer's sole or principal residence is exempt.


The time when you change your property holding is generally a convenient one to review your will to ensure it properly covers your new circumstances.

See commission