Legal: Buying and selling a property at the same time?


Navigating the intricate dance of buying and selling properties concurrently—whether you’re upsizing, downsizing, or simply relocating—requires a delicate balance of timing and strategy. Let’s unravel the complexities of simultaneous financial settlements and explore some key considerations.

First off, let’s clarify some terminology. The ‘exchange date’ marks the moment when the purchaser signs the contract and submits the deposit, committing to the purchase. On the flip side, the ‘completion date,’ also known as the settlement date, is when the vendor receives the remaining purchase price, officially transferring ownership to the purchaser.

Now, onto the logistics. Electronic settlement platforms like PEXA have streamlined financial transactions, enabling multiple transactions involving various buyers, sellers, and banks to be seamlessly linked. However, the real challenge lies in managing the ‘domino effect’ in linked transactions.

Picture this: if your purchaser is late to settle—or worse, defaults—it can throw a wrench into your own settlement plans. This domino effect can result in late fees, potential losses, and a whole lot of stress.

But why would your purchaser be late or default, you ask? Well, it’s more common than you might think. From finance hiccups to contractual disputes, there are numerous reasons that could derail the process.

So, what happens if your purchaser delays or defaults? Brace yourself for potential late fees, which can range from 6% to 10% per annum on the unpaid balance of the purchase price. And if settlement is further delayed, the vendor may even take your deposit and pursue additional damages.

But fear not, there are strategies to mitigate these risks. Negotiating higher deposits and late fees, as well as arranging flexible moving logistics, can help ease the burden. Staggering settlement dates—settling your sale first followed by your purchase—can also provide a safety net, allowing time to regroup if things go awry.

And let’s not forget about bridging finance—a sensible Plan B that bridges the gap between buying and selling. While it may incur additional costs, it’s invaluable insurance against unforeseen setbacks.

In conclusion, while simultaneous transactions are feasible, they’re not without risks. It’s essential to discuss these complexities with your conveyancer and devise a comprehensive strategy to navigate the process smoothly. At SFP Financial, we’re here to guide you every step of the way through the maze of property transactions.