Conveyancing: What is “exchange of contracts”?
Following an agreement by a Vendor (seller) and Purchaser (buyer) for the sale and purchase of a property, the agreement will be reduced to writing in the form of a Contract.
In fact, the Contract will be available to the Purchaser when the property is inspected. This is a requirement under the law.
The Contract will contain all relevant information and documentation pertaining to the property. It will include things such as the purchase price, Council zoning documents, a water sewerage diagram, a Land Titles Office certificate together with any declarations concerning any known proposed use or interference with the property.
Once the agreement has been reached as between the Vendor and Purchaser, a Contract will be executed by each party, and the Contract as executed by one party will be exchanged with the Contract executed by the other party.
The exchange of contracts evidences the agreement that has been reached with respect to the purchase of the property but also instils in the Vendor or an equitable interest in that property, such that the Vendor does have available to them a level of protection from any decision by the Purchaser to either agree to sell the property to another party or indeed, withdraw the property from sale altogether.
Following the exchange of Contracts, further work is undertaken for the purpose of effecting the sale. This will include the administration of particulars on title and the commissioning of any further inspections or reports that may be required. Usually, 4-6 weeks following the exchange of contracts, the settlement of the sale will take place.
Brydens Lawyers has over 50 years’ experience acting in relation to the conveyance of properties, on behalf of both the Vendor and Purchaser. For all your conveyancing needs, contact Brydens Lawyers on 1800 848 848 or at brydens.com.au. At Brydens Lawyers – #WE DO conveyancing.