Step 1 : Pre Purchase Inspection
Before you purchase a property, a prudent purchaser will arrange inspections on the property. The Contract for Sale of Land does not cover the quality of the buildings on the property. What you see is what you get otherwise known as “Caveat Emptor” or “Buyer Beware”. For a freestanding house both a pest inspection, which will advise on any past or current pest activity affecting the property and a building report, which will advise on any structural problems would be advisable. You may also want to consider having the electrical wiring and plumbing examined, as this is not covered in a building inspection.
If you are buying a unit, townhouse or villa you will require a strata report. This report summarises inspection of the strata records of the Owners Corporation, identifying insurances in place, quarterly levies, any special levies, the financial position of the scheme, any ongoing maintenance problems and any issues noted in minutes of Owners Corporation meetings.
Step 2 : Exchanging Contracts
Exchanging contracts is the legal process of buying property. There are two identical copies of the contract for sale, one for the Purchaser and one for the Vendor. The contracts are signed by each party and dated, then swapped or ‘exchanged’. The contract is then binding on both Purchaser and Vendor.
Before exchanging contracts, there may be some amendments required to the contract. For example, change of settlement period or amount of deposit.
VT Conveyancing will review the contract and discuss your personal requirements before commencing negotiations with the Vendor’s conveyancer/solicitor.
Before exchanging contracts it is wise to ensure that you have unconditional approval of your finance. This may involve your lending institution obtaining a valuation of the property which can take up to 5 days.
On exchange of contracts, typically a 10% deposit is required. Deposit bonds are becoming frequently used in lieu of cheque deposit. Your broker/lending institution will arrange deposit bond.
When you buy a property in VICTORIA there is usually a 5 business-day cooling-off period after you exchange contracts. If you use your cooling-off rights and withdraw from the contract during this period, you will pay the Vendor 0.25% of the purchase price. This works out to be $250 for every $100,000. Many contracts now include a Section 66W certificate which waives cooling off right and binds both the Vendor and Purchaser from exchange of contracts.
A cooling-off period does not apply if you buy a property at auction or exchange contracts on the same day as the auction after it is passed in.
VT Conveyancing will advise you of your rights before signing the contract.
With each transaction of property, there is stamp duty payable, on the Contract and Transfer, payable either on or before settlement or 3 months after exchange, whichever is the earliest. There are penalties for late lodgement of stamp duty. It is our responsibility to ensure that your Contract and Transfer are stamped on time.
Before settlement, the exact amount owing to the Vendor will require some adjustment to include figures such as council rates, water rates and strata levies which are adjusted from settlement date. We will calculate these adjustments and provide you with the total amount payable.
Step 3 : Settlement
As the name suggests, ‘settlement’ is the final step taken in the conveyancing process to conclude the transaction when title is transferred to you and you receive the keys. Settlement is usually attended by four parties: the Vendor, Purchaser as represented by their respective licensed conveyancer/solicitor and discharging and incoming mortgagees.
You are not required to attend settlement.
Immediately after settlement the change of title and mortgage will be registered at the Land and Property Information and Valuer General, local council, water authority (and strata manager if applicable) will be notified of the ownership change.
We will notify you of the finalisation and the agent will release the keys of the property to you.