There are different ways to buy property in NSW. Knowing the difference between these and the different conditions will make the process easier.
A standard residential property transaction is known as a Private Treaty sale. This is when the vendor, or home owner, sets the price they would like to sell their property for and their real estate agent negotiates individually with prospective buyers to achieve a sale as close to this price as possible. All offers and counter offers must be made in writing and signed by you. The agent is legally obliged to pass on all offers to the vendor as soon as possible. The seller then decides whether or not to accept or reject the offer. In many cases, the sale price is negotiated until both parties agree to a final price. If your offer is accepted you have a five day cooling off period during which you can withdraw from the sale.
Buying at Auction
An auction is a public sale conducted by a licenced auctioneer and is governed by strict rules. There is a reserve price, which is essentially the minimum the home will sell for – if bids surpass the reserve and you are the highest bidder, you have to sign the contract right there and then.
To participate in a NSW auction, you must register with the vendor’s agent and you will be given a bidders number. The auctioneer oversees the process and all bids from potential buyers are recorded. Before the auction commences the seller will normally nominate a reserve price and if the bidding continues beyond the reserve the property is sold at the fall of the hammer.
The seller is also permitted to make one bid called a vendor bid which the auctioneer will announce. If you are the highest bidder, you have to sign the contract of sale right there and then and pay your deposit (normally 5 or 10 per cent). There is no cooling off period.
Buying property off the plan
When you buy property off the plan, you are paying for something that hasn’t been built yet. The home can end up slightly different from what you were told. However, it does offer you a lower price point than many other properties.