Real Estate Jargon Explained
Contains the details of your house and the conditions of the sale. You should organise a contract through your solicitor as soon as possible. Even if your don't know which agent you're going to choose, preparing your contract as early as possible means your property will be advertised sooner, and buyers will see it earlier.
Once you've accepted an offer, a 5 day cooling-off period begins. This allows the buyer to conduct building and pest inspections, speak to the neighbours, call the council etc. If you're selling by auction, there is no cooling-off period. A 5% or 10% deposit is paid on the spot and contracts are exchanged immediately.
Occasionally a buyer will put down a good-will deposit in order to secure the property during the cooling-off period. This is generally 0.25% of the sale price. If they pull out for any reason (except death or mental disability), you keep this deposit.
At the end of the cooling-off period, the buyer must pay their deposit to secure the sale (either 5% or 10%.) The deposit cheque is held in an agency trust account.
Once the deposit is paid, your agent will get you to sign the contract. The buyer signs an identical copy, and both are sent to the solicitors. If either party backs out, they are liable for the deposit.
Once contracts are exchanged, the settlement period begins (normally 42 days). You can use this time to find another house (if you haven't already), organise your finances, and move out.
The buyer pays the balance of the purchase price and picks up the keys. Normally your bank and solicitor will take their fees out after settlement proceeds and send you a cheque for the rest. Your estate agent will probably take their commission from the deposit, and send you a cheque for the balance.