Plain English Guide to Buying Residential Real Estate

There are few more important transactions than buying real estate. You are making a major financial investment and the purchase is likely to result in changes to your personal life. Buying real estate is usually an emotional process and it is important to make sure that you are not “blinded” by this emotion.

The team at Coleman Greig will help you through the process and make the purchase more objective. This will reduce the risk of you making a mistake or a poor decision. This guide outlines some of the more important steps but remember, your lawyer or conveyancer is only ever a telephone call away if you need further help.

Now that I have found the property, how do I make sure that I don’t lose it?

Holding Deposit

Once you have found a property and agreed on the price, the real estate agent might ask you to pay a holding deposit. This is an indication of your good faith and will not normally bind you or the vendor to the deal. Until the contract is binding the holding deposit will be fully refundable. Usually, if a holding deposit is paid, the vendor and the real estate agent will agree to take the property off the market for a few days before contracts are exchanged. However, it is important to understand that neither party is bound unless and until contracts are signed and exchanged.

Check It Out!

The law requires that you receive a certain amount of information about the property you are interested in but the general rule is “let the buyer beware”. It is your job to make sure that the property physically is what you expect it to be. Most buyers do not have the qualification or experience to properly assess the structural condition of the property or whether it complies with relevant standards. For this reason, we usually advise that you have professionals inspect the property on your behalf. There are a number of services available and these include:

Pest and Building Inspections

These advise you of the structural soundness of the property and the presence of any pests (such as termites) and show any maintenance or treatment that may be needed.

Survey Report

Shows exactly where the boundaries are in relation to any buildings or other improvements and identifies the physical location of the land.  The reasons you may require a Survey Report include:  to identify the property, to determine whether the building on the property and upon adjoining properties encroach across boundaries, or to determine whether walls and roofs of structures comply with council requirements regarding distances from boundaries.

Building Information Certificate

This is a Certificate issued by the Local Council to show that they are satisfied the the buildings on the property comply with approvals and/or regulations.  To obtain one of these, you must complete an application form and pay the fee.  Usually a current survey report will be required to accompany the application.  Council may then take up to 4 weeks to arrange an inspection of the property.  Then 3 things may happen:

Council may issue the certificate – which means the building either complies in all respects or does not comply but council is happy to accept it in its current format; OR

The certificate is conditional on some works being carried out or some information or certifications being provided; OR

Council may require rectification or demolition of improvements which have been erected without approval or in breach of council regulations.

Purchasing a property without a building information certificate may result in serious issues if the property does not comply with council requirements. But obtaining a certificate after exchange can have its own consequences – depending on what problems are identified by Council, you may have a right to cancel the contract but in other circumstances you may be bound to complete and the costs of compliance may become yours.  You should discuss with us the pros and cons of getting (or not getting) a building information certificate now, so you can make an informed commercial decision as to the risks involved.

Inspection of Records

Where you are buying a Strata Title property we strongly recommend inspection of the records of the Owners’ Corporation. This report should be carried out before exchange of contracts but sometimes can be completed after contracts are exchanged. We will give you further information about these services when we discuss the contract.  You can also have a look at the NSW government information resources here

In addition there are a number of checks that you should perform yourself. Depending on the location and type of property you are buying, you may want to review council online records, or telephone or visit the local council before exchange.  It is important that you should try to satisfy yourself that you have all relevant information about any proposed developments or changes in the area around your property. For example a nearby road may be about to be widened or closed, or a major shopping centre or other development might be planned for the area. The Local Council should be able to help you with these enquiries, as well as whether a Building Information Certificate (or equivalent) or Occupation Certificate for the property has previously been issued by the council, and whether any additions or renovations have been approved.

If you have any special plans for the property, it is vital that you discuss these with us, the Local Council and any other relevant authorities before committing yourself to the purchase. It is also vital that you ensure that all of the services you need are available to the property.

What does exchange of contracts actually mean?

Exchange of contracts means that each party hands to the other a signed copy of the contract and the purchaser will usually pay the deposit. The parties are legally committed when contracts are exchanged. Exchange of contracts occurs in one of two ways.

In some cases the real estate agent will ask you to sign a contract.

Purchasers of residential property can have a “cooling off period” of 5 business days after contracts are signed and exchanged. This means that if you change your mind during the cooling off period you can cancel the contract and recover your deposit (less an amount of 0.25% of the purchase price). You do not have to give a reason for cancelling the contract during the cooling off period. The vendor is fully committed and does not have any cooling off rights. If you sign a Contract with a cooling off period, it is vital that you contact us immediately so that we can do everything that needs to be done before the cooling off period expires. If you are not confident that your finance approval and all necessary inspections can be completed within 5 business days, you may be able to negotiate an extension to the cooling off period. If you are uncertain about any aspect of the purchase, please contact us before signing any documents. It is important to understand that Cooling Off rights apply only to residential property.

The agent cannot ask you to sign the contract with a cooling off period where the property is not residential.

In other cases the real estate agent will not ask you to sign the contract

In these circumstances the agent will arrange to have the contract sent to us for checking and we will discuss the purchase with you in detail and arrange any inspections before signing the contract. There may not be a cooling off period in these circumstances.

What happens if I want to buy at auction?

If you are buying at auction you are fully committed as soon as you sign the contract at the auction. If you intend to buy at auction, please contact us well before you attend the auction so we can go through the contract and advise you of any issues that need to be resolved.

What happens after contracts are exchanged?


After contracts are exchanged, we check with various government departments to make sure that the property is not affected by any proposals and to make sure that all rates and taxes are paid. We will also send a list of questions about the property to the Vendor’s solicitors. The contract gives you adequate protection if these searches disclose any problems.

Finance Documents

You will need to follow up your lender to draw up the Mortgage documents which will need to be signed by you.  Generally in the case of a residential purchase you will not need specific legal advice on these documents however we are happy to go through them with you if required.


The property is usually insured by the vendor until settlement. If the vendor allows you to move into the property before settlement, the risk will pass to you at that time as if you were already the owner, so you must insure the property from when you move in. When you are arranging your insurance before settlement you must show your full names as owners and the full name of the lender as mortgagee. The insurance policy must comply with any requirements of your lender.

In respect of a strata title unit, villa or townhouse, the building and common areas are normally insured by the Owners’ Corporation. We check that this insurance is current and that the Owners’ Corporation has complied with its obligations in respect of insurance. We strongly recommend that contents and public liability insurance should still be taken out by you.

Stamp duty

The contract will need to be stamped between the earlier of settlement and the date being 3 months after the date of the Contract.  Certain forms need to be signed by you and we will also need to undertake a verification of your identity at that time (if not already done).  Note these verifications of identity expire after 2 years. Note some first home buyers may have the benefit of exemptions or concessions from paying stamp duty.  It is imperative that you advise us if you are not a citizen or permanent resident so that we can discuss your options, as an 8% surcharge duty applies on the purchase of residential real estate by foreigners.

Settlement Arrangements

We will make arrangements for settlement, which usually occurs 6 weeks after contracts have been exchanged, but that date will depend on the terms of the contract. We will try to give you as much notice of the settlement date as possible. Shortly before settlement, you will be asked to provide the balance of purchase monies together with funds to meet any unpaid costs or expenses (including stamp duty).

What happens at settlement?

It all happens!

When you are notified of the settlement date you should attend to the following to make sure that everything runs smoothly:

  • Arrange for the connection of telephone, gas and electricity services in your name from the settlement date. The authorities will arrange for the meters to be read and the vendor will pay their bills up to the settlement date. You will then be responsible for those services from that day onward.
  • You should arrange with the real estate agent to make a final inspection of the property on the morning of settlement or a day or two before. This is to make sure that the vendor has moved out and has left the property in good order and not damaged, and that they have not taken any items included in the sale. If you have any concerns about the final inspection, you should contact us immediately. It may be necessary to delay settlement until any problems have been rectified.

On the day of settlement a virtual electronic settlement with the vendor’s solicitors and your bank or financier will pass payment of the purchase price and the transfer of the title to you. As soon as this takes place we will notify the real estate agent so that they can release the keys to you so that you or a future tenant can move in.

You should book your removalists well before the settlement date.  Usually you can give them an approximate settlement date based on the terms of the contract, which can be confirmed closer to the actual date.  We strongly recommend that you do not book removalists for the day of settlement unless you absolutely have to – conveyancing settlements are notoriously unreliable as they require all parties to the transaction to have done everything on time and the settlement may have to be rescheduled at the last moment, which could be when your truck is sitting outside the property waiting to unload.

After settlement the council, the water supply authority and the Valuer General’s Department are informed that the property has been transferred into your name. We will arrange at settlement for council and water rates and any strata or community title levies to be adjusted between you and the vendor and ensure that all arrears are paid.

Once settlement has taken place the Land Titles Office will register the property into your name as owner.

For more information on how our residential conveyancing lawyers can help you buy a house or apartment, please contact our team.

Disclaimer: The information provided in the document is a general summary and is not intended to be nor should it be relied upon as a substitute for legal or other professional advice.


Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230