Property Purchase Process

For information about how much deposit you need and things you can do to get ready to buy a home – please refer to our Home Loan Process Fact Sheet.


Whether you’re a First Home Buyer whose head is pretty much spinning with all the information and considerations you need to take into account – or you’ve purchased property before – the reality is that very few of us regularly buy property. 

Given that there may have been changes in processes, the law, or the credit environment – it makes sense to slow down a little and educate (or refresh) yourself with information that can smooth the journey and avoid the pitfalls.

We hope this Fact Sheet will allow you to do just that.

In order to keep this Fact Sheet relatively short and (hopefully) easy to read – we are presenting what we believe are the standard processes and considerations for purchasing a property by ‘private treaty’ in NSW. 

Most other States and Territories follow similar processes – with the notable exception of Qld where there is no exchange of contracts and, unless the contract is conditional (see below), the contract is binding from the moment you execute it (sign it).

In all cases please ensure you obtain legal advice specific to the State or Territory where you are purchasing.

Please also refer to the following Fact Sheets if you are:

This Fact Sheet does not seek to provide any guidance on what you should buy, where you should buy, or how best to negotiate a price.  There is plenty of good information available on these topics and in any event most of these decisions, especially for owner-occupied property, will come down to personal preference and lifestyle choices.

So – let’s fast forward and assume you’ve found your home and have negotiated the price.

The Contract of Sale - Conditional Contracts

One of the significant advantages of buying your home via private treaty (i.e. negotiating directly with the Vendor or their Real Estate Agent) is that you not only get the chance to negotiate the price but also the terms of the Agreement.

In this regard it is generally wise to make any Contract ‘conditional’ on certain things such as:

  • Pest Inspection

  • Building Inspection

  • Finance – don’t be fooled that your home loan “pre-approval” is enough to ignore this condition.  Refer to our Pre-Approval Fact Sheet for more information

And don’t be persuaded by the Real Estate Agent that a pre-approval or the cooling-off period is enough to protect you.  The Real Estate Agent works solely for the Vendor.  They are not your friend.

Here is what the Law Society of NSW has to say about inspections:

Because you are expected to take the property “as you find it”, that means you will also sign up to any structural problems, pest infestations or other defects that might not be obvious to the naked eye. That is why it is always best to have someone who knows what they are doing look over the property. After all, you may be paying a few hundred dollars up front to save yourself thousands, or even tens of thousands of dollars down the track.

The real estate agent may be able to tell you if any inspection reports have already been prepared in respect of the property. But you should be aware of who they were provided for and any other limitations or disclaimers which may reduce your ability to rely on such a report.

Your solicitor should also check whether the contract includes:

  • A survey

  • A building certificate

  • A home owner’s warranty insurance certificate for any renovations done on the property

Exchange of Contracts (Excludes Qld Property)

A contract to sell a property becomes binding when the buyer and seller each sign a copy of the contract for sale and exchange them. At exchange, the buyer also usually hands over a deposit (often 10 per cent).

If the Contract was ‘conditional’ then it becomes binding once the condition/s have been met.

For private treaty sales, exchange usually means you will deliver your signed contract to the seller’s agent and pick up the seller’s signed copy.  Sometimes a seller will be happy to exchange contracts by mail, in which case the seller’s signed contract will be delivered to your solicitor.  In all cases, a formal exchange of the contracts is done by either the seller’s agent or the seller’s solicitor.

Get your finances in order

Please refer to our Home Loan Process Fact Sheet for greater detail on the loan application process.

As soon as you have a copy of the Contract signed by at least one party (either you or the Vendor) you need to provide that to your Mortgage Broker to get your Formal Loan Approval underway.

Hopefully you already have an Approval in Principle in place - or you’ve had an experienced mortgage broker undertake a rigorous assessment of your borrowing capacity – but either way the protection of a finance clause is a good idea as outlined above.

At this stage you should also be double-checking that you have sufficient ‘funds to complete’ the purchase – including Stamp Duty, other government charges, any balance of the purchase price that you won’t be borrowing, legal fees, inspection costs etc.

A quality mortgage broker will also ‘crunch the numbers’ in this regard and should alert you if they believe you’ll have a shortfall of funds.

Behind the Scenes

After many hectic weeks, or months, spending every weekend looking at properties – negotiating - dealing with the contract - and then pulling your loan application together – it might appear to you that everything has gone way too quiet.

Here’s what is happening behind the scenes:

  • Your solicitor or conveyancer will be working so that everything proceeds smoothly to settlement. To make sure the seller has not left something out of the contract, they will be carrying out enquires about the property with the local council and government departments.

  • Your mortgage broker will be liaising with the Lender to move your loan application to an Approval.  There are multiple steps in the process and your mortgage broker will almost certainly need to contact you a few times to clarify questions from the Lender or satisfy requests for more information or documentation.  Regardless, your mortgage broker should be regularly updating you as each major milestone occurs.

  • Your solicitor & mortgage broker should begin liaising with each other once a Formal Loan Approval is to hand and the settlement date draws near.

  • Once Formal Loan Approval has been obtained and you have signed and returned the loan contracts please note that your mortgage broker is largely ‘out of the loop’ as your file is handed from the credit department of the Lender to their Settlements Team – often an external legal firm.  Your solicitor or conveyancer now becomes your primary contact to finalise settlement of your home.


When you sign the contract, you will usually agree to a settlement day.  Most commonly this will be six weeks after the date of exchange – but can be negotiated as a shorter or longer period.  (Be very careful about accepting a shorter settlement period if your finance application is not already well advanced.)

At settlement, you will need to pay the seller everything you owe them to settle the purchase of your home. This amount will take into account any ‘adjustments’ for utility bills, strata levies, council rates and tax calculations that your solicitor makes.

You do not usually need to attend settlement in person.

Instead, your solicitor and the seller’s solicitor will meet to make sure they have everything they need for the sale to go ahead.

If you are taking out a mortgage to pay for the property, a representative of your bank (as well as the seller’s bank – if applicable) will also attend settlement.  In many cases, settlement may occur electronically rather than a physical settlement.

Once settlement happens, your solicitor will call you to let you know you are the proud owner of a new home.


We hope this Fact Sheet has given you a basic understanding of the process of buying a home by private treaty.

Please remember to refer to our other Fact Sheets if you’re buying at Auction or Off the Plan – and with regards to the Home Loan Process.

Please feel free to Contact Us if you need any assistance.


If you have been directed to this Fact Sheet by your Independent Mortgage Planner it is in order to allow you to review some relatively detailed considerations in your own time and at your own pace. Only any specific advice subsequently, or previously, provided by your Independent Mortgage Planner constitutes personal advice. In all other circumstances, the information provided in this Fact Sheet is general in nature only and does not constitute personal advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information in this Fact Sheet you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. Before making any decision, it is important for you to consider these matters and to speak to an Independent Mortgage Planner. We provide Credit Advice only. You may also wish to seek appropriate legal, tax, and other professional advice.


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