When the buyer and buyers solicitor are satisfied that all the necessary surveys and searches have been carried out satisfactorily, the contracts are signed and exchanged.
The exchange normally takes place in the office of the vendor's solicitors and from this stage on after a 'cooling off' period of five business days - both parties are legally bound, unless there are exceptional circumstances, to go through with the sale. The purchaser pays a deposit which usually amounts to 10 percent of the purchase price. This money is normally paid to the real estate agent and kept in a trust account or invested in an interest bearing account in the names of both parties, and the interest shared between them.
The purchaser is responsible for paying the stamp duty on the contract and, when it is signed the onus for insurance rests with the seller until settlement or after completion of sale. After settlement or completion the new owner is responsible.
The transaction is completed on Settlement Day - the day when the purchaser pays the balance of the purchase price. Usually the settlement meeting is attended by the vendor's and purchaser's solicitors and, if necessary, a representative of the organisation with whom the buyer has arranged a mortgage.
At this meeting the balance of the money owed is paid and the vendor's solicitor instructs the agent to disperse the moneys he has held on behalf of the vendor and purchaser.
The purchaser will also pay whatever 'adjustments' have been agreed. These normally cover the proportion of water and council rates the vendor has paid beyond the date on which the house or unit will change hands.