What Happens During the Exchange of Contracts?

The exchange of property contracts is a crucial step in the process of buying and selling real estate. Here’s what typically happens:

1. Preparation of Contracts: The vendor (seller) prepares a vendor’s statement (Section 32), which includes important information about the property, such as title details, zoning, and any encumbrances.
2. Offer and Acceptance: The buyer makes an offer to purchase the property. If the vendor accepts the offer, both parties sign the contract of sale.
3. Exchange of Contracts: The signed contracts are exchanged, usually through the buyer and seller’s respective conveyancers. This formalises the agreement between both parties.
4. Deposit Payment: At the time of exchange, the buyer typically pays a deposit, which is held in trust by the vendor’s agent or solicitors.
5. Cooling-Off Period: The buyer may have a cooling-off period (usually three business days) during which they can withdraw from the contract, subject to certain conditions.
6. Final Checks: After the exchange, both parties complete due diligence, including property inspections, obtaining finance approvals, and any other necessary checks.
7. Settlement Preparation: As the settlement date approaches, both parties prepare for the final settlement, where the balance of the purchase price is paid, and ownership is transferred.

This process is guided by the Sale of Land Act 1962 and various regulations to ensure fair practices and protection for both buyers and sellers. It’s advisable for both parties to seek legal or professional advice throughout the process.

If you are looking for reliable and professional conveyancers in Victoria, don’t hesitate to contact Red Door Conveyancing on 03 8456 6797 for more details.