Summary of what we will learn in this webpage:
- What to do on the day of Exchange
- Where to sign on the contract
- How much deposit will be received
Step 4: Say now the vendor has found a purchaser for the house for sale.
Print out 2 copies of the valid contract (normally the real estate agent engaged by the vendor would do this.) We will call the valid contract full contract from here on.
On the day of exchange:
1) the vendor(s) signs his/her signature on the line which says vendor on the front page of the Contract. If a real estate agent is involved, s/he will normally sign on the line which says witness. Date the contract where it says “contract date” – this date would be called the date of exchange.
2) the purchaser(s) signs his/her signature on another copy of the full contract; on the line which says purchaser, right at the bottom of the front page of the Contract. If a real estate agent is involved, s/he will normally sign on the line which says witness. Date the contract.
The purchaser will then pay the vendor or the vendor’s real estate agent 1 of the 3 options below:
a) 0.25% deposit (if the vendor agrees to a 5-day cooling off period for the purchaser – this means if the purchaser changes his mind before 5pm on the 5th working day after exchange, he can walk away from the purchase and the vendor keeps the 0.25% deposit. If the purchaser decides to go ahead with the purchase, s/he’ll normally need to top up the deposit amount to 5% or 10% deposit by 5pm of the 5th working day),
b) or 5% deposit if the vendor agrees to accept 5% deposit on exchange,
c) or 10% deposit.
Together with the deposit, the purchaser hands over his signed copy of the full contract to the vendor and likewise, the vendor hands over his signed copy of the full contract to the purchaser. This act of exchanging each signed copy of the full contract with the other party is what is called an EXCHANGE.