What you need to know before you exchange contracts in NSW

Home buying & selling, Investing, Sydney
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Australia is a country of eight States and Territories, which each have their own, sometimes unique, laws.

The laws around real estate differ substantially across these regions, and there can be quite a few differences depending on which part of the country you are buying or selling in. 300x250-first-home-buyers-ad

What’s required in Victoria may not be necessary in New South Wales or Queensland.

That’s why it’s so important that buyers and sellers access professional advice and assistance, to ensure that they’re fully aware of the legal requirements in each location.

We’ve outlined the principal differences in each State or Territory previously. In this article, we’ll delve deeper into what you need to know before exchanging sales contracts in New South Wales specifically.

The peculiarities of contract exchange in NSW

When buying or selling real estate in New South Wales, the Contract of Sale must come with a series of Schedule 1 Prescribed Documents.

These may include copies of all deeds and restrictions on the use of land, details of any mortgage over the property and of any outgoings such as any rates, body corporate fees or other charges.

Details about all Schedule 1 Prescribed Documents can be found in the Conveyancing (Sale of Land) Regulation 2010 (NSW).

These documents are prepared by the vendor’s conveyancer/solicitor to inform the potential buyer of relevant information about the property.

A principal difference with Victoria is that the Section 32 document – which is a compulsory vendor statement – is prepared to enable the selling agent to market the property. Once the property sells, the Contract of Sale is attached to the Section 32 to complete the exchange.

In NSW, on the other hand, a lawyer or solicitor will prepare the Contract of Sale to enable the selling agent to market the property. Then, once the property sells, they insert the purchaser’s details and price considerations into the contract.

According to the NSW Office of Fair Trading, the Contract of Sale must include a copy of the title documents, drainage diagram and a current zoning certificate (s149) issued by the local council.

Also, if the property has a swimming pool or a spa, then various certification forms must also be attached. Exemptions may apply to this, for example if the property is a lot in a strata or community titles scheme, or has been purchased off-the-plan.

The NSW sales process

Sales ProcessOne of the more interesting elements of the buying and selling of property in New South Wales is that there are two copies of the sales contract – one for the vendor and one for the buyer.

Regardless of whether the property is being sold by private treaty or auction, the physical exchange of sale contracts in NSW is the critical legal part of the sales process.

Each party to the transaction signs one copy before the two are swapped or “exchanged”. This process is usually facilitated by legal representatives of both parties.

In NSW, this exchange of contracts is subject to a number of legal considerations. For example:

  • Neither party is legally bound until the signed copies of the contract have been exchanged, which means that either party can simply walk away from negotiations before that point in time.
  • Buyers of a property sold by private treaty generally have a five working day cooling-off period after exchanging contracts.
  • However, this cooling-off period does not apply to sellers, which means they are usually bound to complete the transaction.
  • When it comes to cooling-off periods, these can be waived, rescued or extended by negotiation before contracts are exchanged.
  • There is no cooling-off period when purchasing at auction.

Preparing and exchanging contracts as a seller

Seller ContractBuying or selling real estate requires adherence to a number of laws. This is why legal representatives rightly play a vital role in the process.

In New South Wales, if selling property, you need to start the process by appointing a lawyer or solicitor to act on your behalf.

Once you have done that, you would instruct your representative to prepare a Contract of Sale for your property. By NSW law, a residential property can’t be offered for sale unless your sales agent also holds the proposed sales contract.

Your lawyer or conveyancer will also proceed with a number of other legal steps, which include:

  • Ordering any searches legally required to be included in the Contract of Sale.
  • Answering queries about the proposed sale of your property from prospective buyers or their legal representatives.
  • During the negotiation process, they will also make any agreed amendments between the seller and the buyer to the contract before it is exchanged.

Once negotiations are completed, contracts are then exchanged between the seller and buyer.

The formal contract exchange is managed by legal representatives, and involves each party signing the final contract.

The seller then notifies their lender about the sale, and provides their bank with a signed discharge authority.

Preparing and exchanging contracts as a buyer

Buying property in New South Wales still requires the ability to negotiate, as well as an understanding of what you can afford to pay for a property.

To begin the process, therefore, you should speak to a professional mortgage broker to understand your borrowing capacity, and to ensure that you’re not trying to buy a property that you literally can’t afford.First Home Buyer Ad

Once you’ve done that, as well as thoroughly researched the market, it’s time to begin the search for your ideal property – whether it’s going to be a home or an investment.

In NSW, once you find a property, as a buyer you would then instruct the seller’s agent to send a copy of the contract to your lawyer or conveyancer for review.

Your legal representative will also act on your behalf during any negotiations, such as on price, or other conditions like the settlement date.

Once negotiations are successfully completed, you then organise to pay the agreed deposit.

The contract will be prepared by your lawyer for you to sign, and then sent to the seller’s solicitor.

Once the cooling-off period has passed, it’s time for the final legal and financial requirements to be fulfilled before the property is all yours!


Buying and selling property involves a number of legalities, which can and do differ in each State and Territory.

But that shouldn’t stop you from investing in property, wherever suits you the best financially.

The world of banking and finance brokers can be a pretty daunting one for both novice and sophisticated investors, and since our establishment in 2002 we’ve focused on providing outstanding service and business standards.

This approach was vindicated when we were named Victoria’s favourite mortgage broker at the Investors Choice Awards.

So, if you’re considering buying or selling property in New South Wales, why not contact Intuitive Finance today to ensure you have the right information and expert support on your side from the very beginning.

Discuss your specific needs & formulate the right strategy for you. Get in touch to organise your complimentary 60min session today!

The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.

Andrew Mirams

12 Comments. Leave new

  • Karen Millward
    January 30, 2019 12:19 pm

    Hi, once contracts are signed and cooling period over, who should the buyer contact regarding any questions about the property, the real estate agent or their solicitor. Can the buyer make contact to the sellers solicitor.

    • Hi Karen,

      This is a really good question and can be answered in 2 parts. Firstly, if it just general information about the property then I think the real estate agent is your best contact. However, if it is specific information about the property (which you really should have done your due diligence on beforehand) then I’d suggest that you speak with your solicitor to seek that advice. They should be able to advise who is the best contact.

      I hope this helps?

  • Hello,
    I have two questions I hope you can help with.
    Once contracts have been exchanged and deposits paid. Is there any possible way for the vendor to withdraw from the sale?
    Also in the case of a off market purchase where contracts have been exchanged but settlement hasn’t taken place. Can the agent market the sale prior to settlement?
    Any help would be greatly appreciated.


    • Andrew Mirams
      December 4, 2019 7:17 am

      Hi Owen,
      A couple of great questions here. Firstly, they are both quite technical questions, we aren’t lawyers and if you want further confirmation, I’d recommend you seek further advice.
      In saying that, our understanding is that once contracts have been exchanged, and the cooling off period is over, there is no way a vendor can withdraw from the sale.
      Your 2nd question is a little unclear, do you mean “market it” in terms of re-selling it? Or market it in terms of renting it?
      I believe that both are possible but with clarification we could confirm.

  • Hi, I signed a sales advice of $2000 refundable which I later decided not to proceed. Now the agent says my deposit cannot be refunded. No contract was signed, no soliciting involved. Can he do that? Thanks

  • Hi
    What time frame can exchange of contracts happen after aceptance of offer?
    I wouldnt believe it would take days.

    • Andrew Mirams
      November 6, 2020 7:24 am

      Hi Nick,
      Good question. Normally once you have a verbal agreement and acceptance, this happens within days.
      Obviously, the key is to get them signed and exchanged asap to confirm the sale.
      I hope this helps?

  • Hi,

    I signed a contract and paid 5% deposit for land and my solicitor sent it to vendor for exchange 21 days ago which we are still waiting for exchange. Paid 5% for tender contract too with builder. It’s taking a long time for land exchange for some reason. Now as December end is last date for build contract in order to claim 25000$ gov build grant. Shall I do build contract before land exchange contract? Please advise.

    • Hi Naresh,
      Your question is quite specific to your purchase and really difficult to answer and probably a question more for your solicitor/conveyancer.
      My observation though would be that you can’t enter into a building contract on land that you either don’t own or haven’t got a contract on as yet as the government departments would rule this ineligible in our opinion.
      I’d be following up the vendor and getting the exchange resolved as a priority.

  • Hi There, I have a question about the sales deposit – if it required to be invested and it is a 5% deposit with all interest earned going to the Vendor, does it need to be invested in both the Vendor and Purchaser’s names or just the Vendor’s name/s?

    • Andrew Mirams
      June 23, 2021 2:12 pm

      Hi Lee,
      Normally the sales deposit would go into the Real Estate agents trust account and then released upon settlement.
      If, however, it’s a private sale, often then the deposit is paid into a solicitors trust account but failing that, then it should be deposited into an account in joint names with the authority to withdraw on that as only “both to sign” in order to protect both parties at time of releasing.
      I hope this helps.


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