From offer to exchange.
In NSW, nothing is binding until contracts are exchanged. Here's how an offer gets there, step by step, and what to get right before you sign.
Get the contract first, then talk to the agent
In NSW the contract has to be complete before a home is advertised, so you can ask the agent for it straight away. After that, most offers move in two stages.
Make your offer in writing
Put the price and terms you have in mind to the agent in writing, by email or text. The agent must pass genuine offers on to the vendor, and tell you if someone else makes an offer.
The agent may ask for a small holding deposit to show you're serious. It's fully refundable, but note that it does not take the property off the market.
An accepted offer isn't binding on you or the vendor. Either side can still change their mind, and the vendor can still take a higher offer.
Exchange contracts
Once a price is agreed, the agent lets both lawyers know. Your lawyer checks the contract and negotiates any changes. You sign your copy and pay the deposit, the vendor signs theirs, and the signed copies are swapped and dated. That swap is the exchange.
When it's competitive, the agent may ask you to sign the contract and have your deposit ready up front, so the vendor can exchange on the spot. If this is requested be sure to have the contract reviewed by a lawyer prior to signing.
The contract binds you both from exchange. Your 5 business day cooling-off period, if it applies, starts then too.
Neither stage is the wrong way to do it. What matters is that the contract and your terms are right before you exchange. Not sure you're ready to exchange?
Offers, then exchange
On a private sale, most deals move in two stages. Knowing which one you're in tells you how committed you are.
Offers come in
Your agent must pass genuine offers on to you until contracts are exchanged, unless you tell them otherwise in writing. Look past the price at the deposit, the settlement date, any conditions, and whether the buyer wants a cooling-off period.
Your agent may take holding deposits from interested buyers. They're refundable, and you can accept more than one.
Accepting an offer doesn't bind you or the buyer. Either of you can still walk away until contracts are exchanged.
Exchange contracts
Once you agree a price, your lawyer and the buyer's lawyer settle any changes to the contract. The buyer signs their copy and pays the deposit, you sign yours, and the signed copies are swapped. That swap is the exchange.
You're bound from exchange, with no cooling-off of your own. The buyer usually gets 5 business days to cool off. If they pull out, you keep 0.25% of the price.
Five steps from offer to exchange
Here's what happens on a private sale in NSW, and who does what.
- Step 1
Get the contract and have it reviewed
A NSW home cannot be advertised until the vendor's lawyer has prepared the contract. It must come with key documents attached, including:
- A title search
- A planning certificate from the council
- A drainage diagram and sewerage diagram
- Any easements, covenants or restrictions on the land
- If body corporate, the common property search and by-laws
Have it reviewed before you offer, so you know what you're agreeing to.
- Step 2
Make your offer to the agent
Put your offer in writing, by email or text, and include what matters to you:
- Price
- Deposit, and whether you'll need a deposit bond
- Settlement period
- Anything you need changed in the contract
- Whether you want a cooling-off period
- Any additional special conditions
The agent works for the vendor and must pass your offer on. They cannot change the contract. Only the lawyers can.
- Step 3
Price agreed: the lawyers settle the terms
The agent sends the agreed price and details to both lawyers (“Sales Advice”). Your lawyer asks for the changes you need, like the settlement date, inclusions or special conditions, and confirms them with the vendor's lawyer.
!Until contracts are exchanged, the vendor can still accept a higher offer. Moving quickly through this step protects your deal. - Step 4
You sign your copy and pay the deposit
- The deposit is usually 10% of the price. A deposit bond or a smaller deposit (generally minimum 5%) can sometimes be negotiated.
- If you have a cooling-off period, you pay 0.25% on exchange and the balance before cooling-off ends.
- The vendor may ask you to waive the cooling-off with a section 66W certificate. Only your own lawyer can give one, after explaining what you're giving up.
- Step 5
Contracts are exchanged
The signed copies are swapped, confirmed identical and dated, usually by the lawyers or the agent. From that moment the contract is binding on both of you.
If a cooling-off period applies, it starts on exchange and ends at 5pm on the fifth business day after.
Settlement usually follows about six weeks later.
Let's work out what's holding you back.
Pausing before you commit is normal. It usually comes down to one of a few things, and most of them can be sorted with the right terms. Here's what we hear most.
“I'm worried about being locked in.”
Nothing binds you until exchange. After that, a 5 business day cooling-off period usually applies. Pulling out in that time costs 0.25% of the price. We'll tell you exactly where you stand.
“The agent wants a 66W.”
It's common when a sale is competitive or before an auction. It means no cooling-off, so we'll make sure your finance, inspections and contract are sorted before you give one.
“My finance isn't locked in yet.”
Cooling-off gives you a short window to finalise finance. If you need longer, we can ask for a finance condition or extend the cooling-off period.
“I haven't had a building inspection.”
Book one before exchange, or during the cooling-off period. Buying a unit? Get a strata report too. We can point you to an independent inspector.
“I'm not sure about the contract.”
Send it to us. A lawyer will review it for free and tell you what's worth asking for before you exchange. There are many amendments we will suggest to give you the best deal.
“The agent wants a holding deposit.”
It's refundable and doesn't secure the property. The agent must explain that in writing before you pay, and refund you within 14 days if someone else buys.
Talk to us before you exchange.
Call or text us with what's on your mind. We'll work through it with you and check your offer before it goes to the agent. It's free.
Important to remember
- Nothing is binding until contracts are exchanged.That cuts both ways: you can walk away, and so can the vendor.
- Cooling-off starts on exchange, not when you sign.It runs for 5 business days starting the day after exchange and ends at 5pm.
- There's no cooling-off at auction.Or if you buy on auction day after the property is passed in.
- Only the lawyers can change the contract.Get every change agreed to before you exchange.
Have the contract reviewed before you make your offer, not after. Then when your offer is accepted, you're ready to exchange quickly.
Know the contract before you make your offer
Send us the contract for sale. A NSW property lawyer will review it for free and flag what matters, in plain English.
Back within 4 business hours where possible. No obligation, and if you buy with us, nothing to pay until settlement.
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1Send us the contract and a few details about the property.
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2Get your review with a clear plan for your next steps.
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3Talk it through with us, including your offer.
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4We handle the conveyancing from exchange through to settlement.