The Legal Requirements when Selling a House Privately in Australia

The laws and regulations around selling or buying property

The laws and regulations around selling or buying property differ in each state or territory, as the legal requirements are regulated by state legislation. So, when selling your house privately be sure to use either a solicitor or a conveyancer in the same state or territory that your property is in. Conveyancing is the legal process of transferring ownership of a property from one party to another. This is for any type of property whether it is land, a house, townhouse, strata title, acreage etc.
Below we have provided the links for each state and territory government for you to read:

• Victoria – https://www.consumer.vic.gov.au/housing/buying-and-selling-property/selling-property/selling-property-by-private-sale
• New South Wales & ACT – https://www.fairtrading.nsw.gov.au/housing-and-property/buying-and-selling-property/selling-a-property/selling-without-an-agent
• Queensland – https://www.qld.gov.au/law/housing-and-neighbours/buying-and-selling-a-property/selling-a-home/ways-to-sell-your-home/selling-privately
• Northern Territory – https://nt.gov.au/property/buying-and-selling-a-home/ways-to-buy-or-sell-a-home/ways-you-can-sell-your-property
• Tasmania – https://cbos.tas.gov.au/topics/housing/buying-selling-property/advice-buying-selling-property
• South Australia – https://www.sa.gov.au/topics/housing/selling-a-property-yourself
• Western Australia – https://www.commerce.wa.gov.au/consumer-protection/selling-property-2

Legal Preparation

The legal requirements in most states or territories require two key legal documents when selling a property.

1. A Vendor Statement

The Vendor Statement contains information relevant to the property and must be provided to the buyer before the contract is signed. It includes info on the vendor, title, recent building permits, mortgages, planning and zoning, outgoings, access, and services. A legal representative will be able to prepare this completely and accurately, so you don’t need to.

2. The Contract of Sale

The contract of sale contains the title details of the property, the address of the property, the names of the seller and buyer, the agreed price, the agreed deposit, the length of the settlement (settlement date), the balance owing at settlement and any special conditions such as ‘subject to finance’ or subject to the selling of another property. (Ideally the contract is unconditional). The Contract of sale should also contain any chattels included.  If you or the buyer need special conditions in your contract of sale, then ensure you advise your conveyancer or solicitor.

3. Offer & Acceptance Form – (applicable in some states)

This is a simple form detailing the two parties’ details – The Owner/Vendor and the Buyer. It will have a date for the accepted settlement, the amount offered and the amount for a deposit. This form is NOT to be signed by the owner, just the buyer, and you then take this form to your solicitor or conveyancer, and they will handle it from there.

Legal Requirements when Advertising Your Property for Sale.

You shouldn’t misrepresent the sale or rental price of a property. The advertised price must be fair and reasonable and reflect the current market value.  In addition, when advertising a much higher price than the market is reflecting may also see your property on the market for much longer.

Any changes during a marketing campaign likely to affect the selling price must be reflected in the advertised price. For example, if a higher offer is made for a property and rejected, the advertised price must be updated unless the client changes their mind. Other interested parties should also be given an opportunity to review their offers.

Properties can be advertised for sale at a single price or a price range or have no price advertised at all.

When a property has sold for more than the price it was initially advertised, this does not always mean that underquoting has taken place. Sometimes a property will sell for more than initially advertised. This can happen when you have many interested buyers competing against each other to buy a property, and in doing so push up the sale price of the property.  The best way to receive offers is via a Property Offer Form (https://www.noagentproperty.com.au/make-an-offer/?ppt=12730&title=ID%2012730 )

Some states, particularly NSW and VIC –cannot advertise the words ‘offers over’, or price +, or anything similar, as the NSW and Victorian Government have put a stop to this as agents were continuously advertising much lower prices than the property would sell for and property buyers were complaining to the government.

Who can Sell a Property? The Legal Requirements.

In order to legally sell a property all owners must agree and be signatories on the Contract of Sale and any other legal document for the sale of the property.  For example, if on the title there are two names (a husband and a wife), one party cannot not sell without consent from the other.

If the property has a mortgage with a finance institution, you cannot ‘settle’ a property until the mortgage has been paid.  This usually happens on the day of the settlement.  Your solicitor or conveyancer would have already established if there is a mortgage on the property and will deal with the relevant finance company before and during settlement.

You also cannot ‘settle’ if the property has a caveat on it.  A property caveat is a legal notice that informs a legal claim of interest for a property.  If your property has a caveat on it, you may find this disruptive and/or delay the settlement.   Again, when the solicitor or the conveyancer do a title search, any caveats will be identified and addressed at the time of settlement.

The Cooling Off Period

Once you have a contract of sale signed by all parties (sellers and buyers), there is a cooling off period until the contract becomes legally binding.   This time-frame differs in each state:

Victoria – Three (3) business days

New South Wales – Five (5) business days

South Australia – Tow (2) clear business days (this does not include the day of signing)

Queensland – Five (5) business days

ACT  – Three (3) clear business days (this does not include the day of signing)

Northern Territory – Four (4) business days

Tasmania – No cooling-off period

Western Australia – there is no cooling off period for real estate contracts made in Western Australia unless the parties agree to have one inserted into the contract.

Auction Sales – No Cooling Off Period

After the cooling off period the contract is binding, and all parties need to fullfill their obligations.  If the contract is subject to something like finance, the contract will state the length of time the buyer has to organise finance.  If they cannot, then the contract is null and void.  If the contract is subject to a building inspection and after the inspection the property is not ‘sound’ then the buyer can pull out of the contract.  Once any of the ‘subject’ to clauses are all passed the conveyancer or solicitor will ensure that all legislative requirements are met.

1. Transfer of Land/Title – This is a document that all state government and territories require as the property changes hands.
2. Stamp Duty Documents – This form is provided to the respective state or territory government that the property resides in.
3. Client Authorisation document – This document gives your Conveyancer authority to act and sign any documentation on your behalf, for example, a Transfer or Encumbrance.
4. Identity Verification – It is necessary for the Conveyancer to verify the identity of their client. This protects parties to a conveyancing transaction.
5. Statement of Adjustments – The calculation of who owes what for rates and levies as at the day of settlement. They are used in property conveyancing and prepared close to settlement.

Conveyancers or solicitors will receive a Confirmation of Registration (COR) from the Land Services Office, as long as there is no mortgage. This is evidence that the registration is now completed, and the Title is held by the Land Services in your name. If you have a mortgage, the COR is forwarded to your bank. You no longer receive a physical paper Title.

Legal Requirements – ‘Post’ Contract of Sale Signed

Buying property at Auction is very different to other property purchases. There is no cooling off period. Whether it is an on-site or on-line auction, the bidding process is public and if the hammer falls and you are the highest bidder, you must sign the contract right there and then and provide the deposit. This means you must be sure you are bidding on a property that you can buy.

Stamp Duty Requirements for Buyers

Stamp Duty is a government tax that is compulsory when purchasing a property.  The amount of stamp duty varies from state to state, as it depends on certain factors, including first home buyer benefits and concessions.  Below are the stamp duty calculators for each state and territory.

Victoria:  https://stampduty.calculatorsaustralia.com.au/stamp-duty-victoria

NSW – https://stampduty.calculatorsaustralia.com.au/stamp-duty-nsw

Queensland – https://www.qld.gov.au/housing/buying-owning-home/advice-buying-home/transfer-duty/how-much-you-will-pay/calculating-transfer-duty/estimate-transfer-duty

Tasmania – https://www.sro.tas.gov.au/resources/calculators

South Australia – https://www.revenuesa.sa.gov.au/stampduty/calculate-stamp-duty

Australian Capital Territory – https://stampdutycalc.com.au/act/

Northern Territory – https://stampdutycalc.com.au/nt/

Western Australia – https://www.wa.gov.au/service/financial-management/taxation-and-duty/calculate-your-transfer-duty

E-Conveyancing

E-Conveyancing –enables conveyancing to be done online. PEXA (Property Exchange Australia), is at the forefront of this online process and provides a digital platform for it. PEXA is regulated by the Registrar in each State where it is active. It is a world-first digital settlements has revolutionised the way property is exchanged in Australia. By providing quicker access to the proceeds of a sale and near real-time tracking on property settlements, the network of financial institutions and legal and conveyancing firms helps over 20,000 families a week safely settle their homes. At the moment it is not designed or recommended as a DIY conveyancing service but who knows what the future will bring.

Get Help and Engage the Right Experts

When Selling a property ensure to engage the right experts to handle the legal requirements when selling a home. No Agent Property have partnered with multiple conveyancers and national conveyancing firms including Lawlab. Our partnered conveyancing firms will handle all legal requirements necessary offering our customers a legal and professional service.