Buying a home in NSW

Cooling off

On a residential purchase by private treaty you have a cooling-off period of five business days from exchange, ending at 5pm on the fifth day. If you rescind within it you forfeit 0.25 per cent of the purchase price. On a $1.2 million purchase that is $3,000. There is no cooling off on a purchase at auction, or on the day of an auction if the property was passed in.

The s 66W certificate

Vendors' agents routinely ask for a certificate under s 66W of the Conveyancing Act 1919 (NSW), which waives cooling off entirely. Signing it before the contract and the strata records have been read commits the purchaser to terms that have not been checked.

What is usually checked before exchange

• The s 10.7 planning certificate, for zoning, flood, bushfire and road widening
• The sewer diagram, for building over a main
• Strata records, for the capital works fund balance, defect history, special levies and any litigation
• Building and pest, always, including on strata
• Whether the deposit is 10 per cent or negotiated to 5 per cent, and whether the balance becomes payable on rescission

Settlement

Settlement is electronic through PEXA. Adjustments are made for council and water rates and, in strata, for levies. If the vendor cannot settle on the due date you may be entitled to interest and, after a notice to complete, to terminate. If you cannot settle, the same applies to you, so do not exchange until finance is unconditional.