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Frequently Asked Questions

1.A Guide to Sale Essentials

This article was extracted in part on 8.10.2016 from http://www.propertyfocusinsydney.com.au/resources/selling-guide/
and provided for your information to ensure impartiality. NOTE this is applicable in NSW only.
Where applicable, I have included my comments as #..# below but they are not legal opinions just my observations.

In New South Wales, agents must be licensed by the NSW Office of Fair Trading under the Property, Stock and Business Agents Act 2002. You can also visit http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Selling_property/The_sale_process.page

A. The roles of agent and seller

When a seller signs an agreement with an agent, the agent undertakes to try to sell the property for the highest price possible within a specified time frame, and to act as the seller’s representative in managing all aspects of the sale. This commences with the initial appraisal of the property, including advice on possible sale price and marketing and promotional strategies.

As the seller, you are represented by the agent, who co-ordinates the marketing and promotion of your property, generates interest from prospective buyers and handles negotiations, which at times can be sensitive.

The agent is the intermediary, who can relieve some of the stress that you may otherwise feel. They have experience in facilitating the sale process from the start through to inspections, price agreement, exchanging of contracts and settlement.

#Ozrealestates.com is NOT an agent. It is a platform for owners or vendors to offer their properties for sale by way of online auction system or fixed price. This website was developed and operated by KHAI KWAN which is a legal firm in Sydney. We provide a free platform service and do not get involve in your auction, negotiations and dealings. We do monitor this platform and maintain an absolute right to terminate any process without notice that is considered to be against the public interest. It is up to the individual owners, vendors, agents and buyers to interact to reach a determinative agreement. This is not notwithstanding that Legal practitioners are exempted from the Property, Stock and Business Agents Act 2002 at Section 5 (2). See

"5(2) This Act does not prevent any person for the time being entitled to practise as an Australian legal practitioner from exercising any function that, had this Act not been enacted, the person might lawfully have exercised as an Australian legal practitioner".


B. How to Sell – Private Treaty or Public Auction?

i. Sale by private treaty

When you sell your home by private treaty, you set a price and the property is listed for sale at that price. In general however, the price is negotiable, with the seller often asking a higher amount than they expect to sell the property for and the buyer making an initial offer lower than the asking price. This is normal practice, with the agreed price usually being somewhere between the two.

The process of a sale by private treaty offers the following benefits:

  • Greater control over the sale;
  • Time to consider offers by potential purchasers;
  • The easy ability to extend the time for which your home is for sale; and
  • The fact that potential purchasers must make offers for your property ‘blind’, without knowing what other buyers think it is worth.

Selling by private treaty can be just as intense as selling by auction, and you will be faced with important decisions if you are presented with offers lower than you hoped for.

There are risks with selling by private treaty which also should be considered:

  • If the price you set is too high, your property may not sell; and
  • If the price you set is too low, you may miss out on maximising the selling price.

You should also be aware that when a property is sold by private treaty, the buyer has a five day cooling-off period during which they may withdraw from the sale.

#You can also provide a BUY OUT ITEM OR BUY OUT PRICE in your listing in Ozrealestates.com. This means the buyer can buy without the need to bid any further. BUT there is a cooling off period of 5 days..#

ii. Sale by auction

To sell through an auction process, the amount you want for the property is generally not revealed to potential buyers who are encouraged to attend the auction and bid for the property against other potential buyers.

#This is where Ozrealestates.com can assist by its online auction platform. Under the Property, Stock and Business Agents Act 2002 - Sect 3, "real estate agent" means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), carries on business as an auctioneer of land or as an agent: etc. There are strictly two elements being for "reward" and "carries on a business" then by law one has to be licensed as a "real estate agent" to do auction. A homeowner does not seek reward nor carries on a business of auctioning. There is nothing that says he or she cannot auction their own property in the Act 2002. There is no requirement in law for homeowners to hire an auctioneer to sell their properties just like in private treating sale, an auction is merely a method of selling like negotiation. There is also no cooling off periods in Auction though. #

Auctions offer the following benefits:

  • You do not have to disclose the selling price upfront;
  • You have a set timetable, with an auction-day deadline to plan by;
  • You can dictate the terms of sale;
  • Bidders are cash buyers—they must enter into a contract upon the fall of the hammer and there is no cooling-off period;
  • Auctions create buyer competition and can thereby achieve the highest possible price;
  • They are highly suitable for genuinely different or special properties, especially those of high worth; and
  • You can sell beforehand, on the day or afterwards—the choice is up to you, guided by the expert advice of the agent.
#By using Ozrealestates.com you can practically do all the above using our control panel in member areas when you list your property but without using an agent#

Setting a reserve price

The reserve price is the lowest amount you are willing to accept for your property, and it is normally set, after consultation between agent and vendor (seller) just before the auction. The reserve price is not revealed to prospective buyers before the auction (and possibly not after it).

#Ozrealestates.com requires you to include this reserve price. This price is not reveal but our system provides an indication when the reserve price has been reached. #

If the highest bid is below the reserve price, you, the vendor, have the option to accept it or not. If you do not accept this highest bid (and there is no obligation to do so), the property will be ‘passed in’. You can then either try and negotiate a price with interested bidders or put the property back on the market, at a specified price.

If the bidding continues beyond the reserve price, the property is sold at the fall of the auctioneer’s hammer to the highest bidder.

Successful bids

The successful bidder must sign the sale contract and pay you a deposit on the spot (usually 10%). There is no cooling-off period for anyone who buys a property at auction. Note too that if the property is passed in at auction but contracts are exchanged afterwards on that same day, the cooling-off period still does not apply.

#In Ozrealestates.com, by default this signing of sale contract is done by KHAI KWAN under a power of attorney for both parties as agreed by both parties (seller and buyer) at the close of auction to seal the contract. #

C. Contract exchange

Exchanging sale contracts is the legal part of selling a home and happens regardless of whether you sell your property by private treaty or auction.

There will be two copies of the sale contract: one for you and one for the buyer. You each sign one copy before they are swapped or ‘exchanged’. This can be done by hand or post and is usually arranged by your solicitor, conveyancer or the agent. At the time of the exchange, the buyer will be required to pay a deposit, usually 10% of the purchase price.

# We used electronic exchange where vendors and buyers are required to click agreed online to complete this#

The contract exchange is a critical point in the sale process:

The buyer or seller is not legally bound until signed copies of the contract are exchanged;
If the agent arranges exchange of contacts, the agent must give copies of the signed contract to each party or their solicitor or conveyancer within two business days;
Buyers of residential property in NSW through private treaty usually have a cooling-off period of five working days following the exchange of contracts, during which they can withdraw from the sale;
The cooling-off period can be waived, reduced or extended by negotiation;
There is no cooling-off period for sellers. Once contracts have been exchanged, sellers are generally bound to complete the agreement; and
There is no cooling-off period when purchasing at auction.

D. Settlement

Settlement is the conclusion of the sale transaction and usually takes place about six weeks after contracts are exchanged.
2. Verifying Identities

This is a legal requirement. It is mandatory for KHAI KWAN to verify your identities. You must agree to provide documents such as passport or medicare card or driver's license to verify who you are when you are asked to do so. In most cases, we will task this to AUSTPOST (there is a fee involved about AUD 39) and they will respond back to us directly. You can download AUSPOST form here. In some cases such as overseas buyers, we will also need your banking details (last banking statement and address) to prove your identity or to do a Skype interview with you to satisfy our KYC requirements. This applies to both Vendors and Buyers. Our terms and conditions have this clause incorporated and must be agreed.
3. What are the special conditions to contract ?

Due to the nature of an auction, there is no cooling off period and once the hammer is knocked down, both parties are contracted to complete the transaction. To do this, you (vendor) has to authorise us to exchange contract with the buyer and the buyer must appoint us as its attorney to accept the exchange in order to bind both parties. This special condition is whereby we KHAI KWAN (being a legal practice) is empowered to act on behalf of both parties is necessary otherwise the contract may not be consummated. To avoid delays, the deposit (10% usually) must be banked in immediately unless otherwise agree by both parties . Note there is generally a cooling period of 5 working days for non-auction arrangements (private sale or buy out in Violater.com).
4. Electronic Settlement and Contract Exchange

We subscribe to pexa.com.au for its e-conveyancing system. Funds deposited into our Trust Account and will be transferred to PEXA for settlement and the registration of titles will be completed. PEXA charges about AUD 110 for financial settlement. For more details about PEXA please go to their website. We also subscribed to infotrack.com.au which also has its own digital signatory requirement together with docusign.com We aimed to work with digital partners to make conveyancing as painless as possible so you can have your new home or cash faster as the case may be.
5.What will happen when the other side fail to perform ?

Firstly this is not legal advice and is a dialog. Generally, the party that failed to perform will be blacklisted by Violater.com. Remember member in violater.com has passed through a verification of indentity process performed by AustPost before they can even participate in the system. Secondly, any deposit paid will be forfeited in its entirety and thirdly the vendor is free to re-offer (if he had not contributed to the buyer's fault) to the second highest bidder. In practise, we will notify the 1st and 2nd winners. We will ask the 2nd winner to be on standby to accept its offer should the 1st winner failed to complete and where the vendor has consented. Obviously, each parties is at liberty to pursue their own claims against the wronged party but I made this clear in our Terms and Conditions that we cannot guarantee success or indemnified any losses or damages caused by our system or by the other side which may or may not be at fault. This is a condition for using this services which are free and without warranty. This is a platform for parties to match their expectations for an underlying property, this is not a system that can guarantee a risk free conveyancing. Obviously Khai Kwan will be happy to take up any request on your behalf to claim what is rightfully a breach in contract and due to you. The process (when the other party defaults) will be firstly to demand payment and if no payments were made to pursue this in Court.
6. Withholding & Stamp Duties requirements (essential reading for non-citizens of Australia)

The Australian Tax-Office requires property valued at AUD 2 mio or above to be liable to a withholding tax of 10%. Broadly, where a foreign resident disposes of certain taxable Australian property, the purchaser will be required to withhold 10% of the purchase price*and pay that amount to the Australian Taxation Office (ATO). Different States will also have their own requirements as to duties. For example, in NSW there is a sur-charge for foreigners of 4 % on top of the normal duties. However the definition of foreigner includes someone who has not stay in NSW in the last 200 days within 12 months immediately preceding the purchase but excludes Australian Citizens (but not Permanent Resident) (See http://www.osr.nsw.gov.au/taxes/spd). For general stamp duty use this calculator (https://www.apps08.osr.nsw.gov.au/erevenue/calculators/landsalesimple.php)

7. On-Line Auction

A. The auction will commence with the nominated starting price which is usually lower than the reserve price. Vendors including co-owners are NOT allowed to bid and do so at their own risks whereby their bids shall be void upon discovery. The auction will be conducted over a period of time as nominated.

Step by Step Auction Process

A property auction will start at the specified date and time

Any bid:

  • must first meet the opening bid call; or
  • must at least meet the minimum next bid nominated (if the opening bid call has already been met).
  • A bid is binding while the timer counts down.
  • During this countdown such a bid may be outbid.

If a bid is not outbid;

  • the bid will lapse and unbind the Bidder if it is less than the reserve; or
  • bind the Bidder to purchase the property if the bid is equal to or greater than the reserve.

B. At the final auction time the highest bid will determine the purchaser and the property will be "knocked down" to that party providing the bid reaches or exceeds the reserve price. The final auction time, as shown by the timer provided on Violater.com, is conclusive as to when the auction ends and the property is "knocked down". (Note there is no cooling off period for auction)

C. We have discretion to close a property auction at any time including, without limitation, where:

  • there is or we suspect there may be, fraudulent or dummy bidding;
  • there is a processing error;
  • there is a technological error or site failure; or
  • there are issues with the property.

When an auction in which you have bid closes and you are the Winning Bidder, we intend to notify you by e-mail and SMS. This notice will include:

  • notification that you are the Winning Bidder and of the amount of the Winning Bid Amount; and
  • an instruction to contact your solicitor (if any) so exchange can be conducted.

D. If during the period of the auction:

  • the vendor dies or becomes mentally ill or incapable of managing their own affairs; or
  • the property is destroyed or substantially damaged to render it unfit for sale,
  • For any other reason determined by us,
the auction will be terminated and all registered bidders will be notified by Violater.com.

8. How much and the conveyancing ?

Free on Violater.com. Note additional features such as bold, highlight or feature property will be extra on Violater.com where users can opt for. The conveyance legal fee levied by KHAI KWAN will start at AUD 1000 (plus GST) plus disbursement. These can include:

  • a title search
  • certificate fees charged by authorities with responsibility for water, electricity, roads, schools etc.
  • photocopying
  • registering the mortgage
  • registering the transfer.

Conveyancing costs other than legal fees and disbursements may include:

  • building and pest inspections
  • survey report
  • establishment of mortgage
  • home building insurance
  • valuation fees
  • mortgage insurance
  • stamp duty and mortgage duty
  • levies, if the property is in a strata or community scheme
  • council and water rates.

The conveyancing itself may consist of the following steps which is arranged by KHAI KWAN (in NSW)

  • examining the contract for sale
  • arranging building and pest inspections
  • examining a strata inspection report (if the property is in a strata scheme)
  • arranging finance if necessary
  • exchanging the contract of sale
  • paying the deposit
  • arranging payment of stamp duties
  • preparing and examining the mortgage agreement
  • checking if there are outstanding arrears or land tax obligations
  • checking if swimming pool compliance documentation is needed
  • finding out if any government authority (eg. local council, Sydney Water, NSW Roads and Maritime Services) has a vested interest in the land or if any planned development could affect the property
  • finding out any information that may not have been previously disclosed such as a fence dispute or illegal building work
  • calculating adjustments for council and water rates for the property settlement
  • overseeing the change of title with Land and Property Information NSW
  • completing any final checks prior to settlement
  • attending settlement.

Extra costs will be levied for non-Australian Citizens because of the various requirements such as withholding tax and so on where applicable. All billable items are listed for easy reference. Please contact us for a copy of cost and disclosure agreement from KHAI KWAN.