When you’re selling your home, there’s a mixture of excitement and relief when you accept that all-important offer.
Before you pop the champagne, there are a few details that need to be sorted before you can call the removalists.
Exchange of contracts
So you’ve accepted an offer or your home has sold at auction? Congratulations! You and the buyer will now sign a contract and the property will be taken off the market. The buyer will then pay a deposit - usually around 10% of the purchase price - which at an auction will need to be paid at the fall of the hammer.
The 'cooling off' period
After the signing of the contract, buyers in South Australia have a cooling-off period of two business days. This enables the buyer to complete any searches or building inspections of the home and basically gives them the option to pull out of the sale if they have a change of heart. Once the cooling off period has ended without objection from the buyer (or you), the contract will be declared unconditional and the settlement process will begin.
Please note, that if your home sells at auction, the sale will be unconditional and the buyer won’t be entitled to a cooling off period.
What happens to your mortgage?
Most people sell their homes before the mortgage has been paid off. If that is the case with your sale, you’ll have to arrange payment on the outstanding amount on your loan before settlement can take place. This can take several weeks to arrange, so start the process with your lender as soon as possible after the contract is signed.
If you’re selling your property for more than you owe, this will be a fairly straightforward process. Where it becomes more difficult is when the sale amount won’t cover what you still owe on your mortgage. In this case, your lender will ask you to make up the shortfall out of your own funds, which can include the sale of other assets.
Let’s settle this
Settlement is when the buyer and seller complete the transaction, and the keys are handed over to the new owner. Most of the settlement process is handled by solicitors and conveyancers, checking inclusion and exclusions, zoning, planning permissions, boundaries and the like.
The settlement period is usually around six weeks, although you may negotiate a longer or shorter period with the buyer. On settlement day, you’ll receive all the money owed to you from the sale and the buyer will receive the keys and legal transfer of the property. Therefore, before this occurs you’ll need to ensure all your personal possessions have been moved into your new home or storage.
With the sale complete, now you can crack open that bottle of champagne!