How it works
In a private sale, you negotiate with the vendor through the agent. A verbal offer starts the conversation, but only a signed contract makes it real. Your conveyancer reviews the contract before you sign, and once both parties exchange signed copies, the deal is on.
From offer to keys
Six steps. Most take 6 to 12 weeks.
- 1
Day 1
Exchange of contracts
Both parties sign. Your copy goes to the vendor's solicitor, theirs to yours. This is exchange. The contract is now legally binding.
- 2
Day 1 to 5
Pay the deposit
Typically 5% to 10%, paid at or shortly after exchange. Held in a trust account until settlement. The amount is negotiable.
- 3
Days 1 to 5
Cooling-off period
In most states, you have 3 to 5 business days to withdraw (you forfeit a small percentage). No cooling-off at auction or if you waive it.
- 4
Weeks 2 to 3
Satisfy your conditions
Get formal finance approval. Complete building and pest inspection. Your conveyancer conducts searches. Each condition has a deadline set in the contract.
- 5
Week 1
Arrange insurance
In NSW and VIC, risk passes to you at exchange. In QLD, risk may pass at settlement (check your contract). Either way, arranging building insurance from exchange is the safest approach.
- 6
Settlement
Settlement
The balance is paid, the title transfers to your name, and your conveyancer and lender handle this via PEXA. Typically 30 to 90 days after exchange. 42 days is the NSW default. QLD settlements are often shorter (14 to 30 days). Offering the vendor's preferred date can strengthen your offer. Keys are released by the agent once funds clear, which can take several hours.
What protects you
These clauses let you walk away with your deposit if something goes wrong.
The deposit
How much: Typically 5% to 10%. Negotiable. In competitive markets, 10% is expected. A smaller holding deposit ($1,000 to $5,000) is sometimes paid first to show good faith.
Where it goes: Held in a trust account (usually the agent's) until settlement. Not in the vendor's pocket.
If the sale falls through: If you rescind lawfully (under a condition or during cooling-off), you get it back minus any forfeiture. If you default without valid reason, the vendor keeps it and may sue for damages.
Cooling-off periods
Private sales only. There is no cooling-off at auction in any Australian state or territory.
| State | Period | Penalty |
|---|---|---|
| NSW | 5 business days | 0.25% |
| VIC | 3 business days | Greater of $100 or 0.2% |
| QLD | 5 business days | 0.25% |
| SA | 2 business days | Varies |
| ACT | 5 business days | 0.25% |
| NT | 4 business days | Reasonable costs |
| WA | None | N/A |
| TAS | None (negotiable) | N/A |
In NSW, cooling-off can be waived with a solicitor's certificate (s 66W). Waiving is irreversible. Only do this if you have completed all due diligence and have formal finance approval. In VIC, the period starts when the buyer signs, not at exchange. Properties sold shortly after being passed in at auction may also have no cooling-off in some states. Confirm current rules with your conveyancer.
Making a strong offer
- 1
Research comparable sales
Know what similar properties have sold for. Your offer should reflect what it is worth, not just what the agent asks.
- 2
Get pre-approval first
A pre-approval letter shows the vendor you are serious and can settle.
- 3
Put a time limit on your offer
24 to 48 hours, in writing. Stops the agent using it as leverage.
- 4
Offer the vendor's preferred settlement
Ask the agent what works. A good settlement date can matter as much as a higher price.
- 5
Keep conditions reasonable
Finance + building and pest is standard. Too many conditions weakens your offer.
- 6
Do not reveal your maximum
The agent works for the vendor. Be polite but keep your budget to yourself.
Situations you might encounter
Gazumping
When the vendor accepts a higher offer before you exchange contracts. This is legal in all Australian states and territories for private sales. Until contracts are exchanged, neither party is legally bound. A verbal acceptance is not a binding agreement.
To reduce the risk: move quickly to exchange, have your solicitor and finance ready, ask the agent to take the property off the market (they are not obliged to, but some will).
Multiple offers and best-and-final
When the agent tells you there are other offers. The agent may invite all buyers to submit their best offer by a deadline (24 to 48 hours). The vendor is not obliged to accept the highest offer. They may prefer fewer conditions or a better settlement date.
There is no way to verify how many genuine offers exist. Agents are legally prohibited from fabricating phantom offers. Set your limit based on what the property is worth to you, not what you think others are offering.
Vendor counteroffer
When the vendor comes back with different terms. A vendor does not have to accept or reject your offer. They can counter with a different price, a shorter settlement period, fewer conditions, or all three. This is normal. You can accept, counter again, or walk away.
Common things vendors push back on: finance clause length (they may want 14 days instead of 21), building inspection condition (they may want to remove it), and settlement date (they may need longer or shorter). Every counteroffer should go through your conveyancer before you agree to changed terms.
Unconditional offers
Stronger but riskier. Most first home buyers should use conditions instead. An unconditional offer has no finance clause, no inspection clause, nothing. Once exchanged, you are locked in. If your loan falls through, the vendor can keep your deposit and sue you for the difference if they resell at a lower price, plus their holding costs.
This can make sense if you have formal unconditional approval from your lender (not just pre-approval, which can still be declined after valuation), inspections are done, and your conveyancer has reviewed everything. For most first home buyers, conditions exist for a reason. Use them.
Name and/or nominee(s)
Buying through a trust, company, or on behalf of someone else. Signing as "Jane Smith and/or nominee(s)" lets you nominate a different entity to complete the purchase before settlement. Useful for trusts or companies not yet established.
Watch: some contracts prohibit it. In NSW and VIC, nominating a different buyer may be treated as a second dutiable transaction, meaning you could pay stamp duty twice. First home buyer concessions will almost certainly not apply unless the nominee independently qualifies. Always check with your conveyancer before signing as nominee.