When buying or selling property, most people will deal with an estate agent. There are laws governing the licensing and conduct of estate agents. Anyone in the business of buying, selling or leasing property on behalf of another person must hold an estate agent’s licence or be employed by a licensed estate agent as an agent’s representative.
During the buying process you can generally expect an agent to:
The purchase of a home is one of the biggest financial decisions you will make during your lifetime. Buying a home can be complicated and time-consuming. Planning is the key to having no regrets down the road.
Make a list of your preferred areas, essential features and your wish list of non-essential features. Knowing what you want will help you avoid buying a property that does not meet your needs.
Learn as much as possible about property buying and the market value of property in your preferred area by researching on the internet, in real estate publications, attending open houses, checking sales results and speaking to real estate agents.
Buying a property is a significant and ongoing financial commitment. Before you start looking for a property you should speak to your bank or mortgage broker to work out exactly what you can afford and how much they will let you borrow.
You need to factor in additional purchase costs such as:
Buyers can arrange a time to inspect a property with an agent by either email or phone. If a property is tenanted, at least 24 hours notice of the inspection has to be given to the tenant.
Alternatively you can attend Open for Inspections, the times are usually advertised in The Courier and on the internet.
Anyone entering the property may be asked for proof of identity and to leave contact details with the agent. This is a security measure and provides the agent with a ready database of potential buyers, who can be notified if an offer is received on the property, or if other properties become available.
Before a property is sold, the seller is required by law to provide the buyer with a Vendor’s Statement under the Sale of Land Act. The Vendor’s Statement (often called a Section 32 Statement) is usually prepared by the seller’s solicitor or conveyancer. It is then signed by the seller and made available to prospective buyers, usually via the agent before the sale or auction.
The vendor’s statement contains information about the property’s title, including mortgages, covenants, easements, zoning and outgoings such as rates. It does not include any information about the condition of buildings, whether they comply with building regulations or if measurements on the title are accurate. The responsibility is on the buyer to find out about anything that is not covered in the vendor’s statement.
An Owners Corporation (formerly called a body corporate) manages the common property of a residential, commercial, retail, industrial or mixed-use property development. Common property may include, for example, gardens, passages, walls, pathways, driveways, lifts, foyers and fences.
An Owners Corporation is automatically created when a plan of subdivision containing common property is registered at Land Victoria. The owners are referred to as lot owners or members. As a member of an Owners Corporation, you have the right to vote on decisions about the operation of the owners corporation and will be required to contribute to costs for repairs, maintenance and insurance, not only for your own home but also for the common property shared with the other lot owners.
When buying a unit, flat or apartment, the buyer will be provided with their own certificate of title. The buyer is not just purchasing the individual property but also the ownership of, and the right to use common property as set out by the plan of subdivision.
Any offer to buy a property should be made through the seller’s agent. It can be hard to work out how much to offer. Do you make your best offer upfront, or offer a lower price and be prepared to negotiate knowing that that the vendor may accept another offer without you having a chance to increase your offer ? In some cases the seller may not be prepared to negotiate at all.
An offer is not binding on the person making the offer until a contract of sale has been signed by all parties. If you require anything to happen before settlement (for example obtaining finance or a satisfactory building inspection report), you should make the contract subject to that event occurring. This is done by including special conditions in the contract that must be satisfied before you can be required to settle.
The deposit is generally paid by the buyer to the seller’s agent either when the buyer makes their offer or by the date stated in the contract of sale. It is held by the seller’s estate agent in a trust account until the settlement date. Most deposits are 10 per cent of the purchase price.
Some buyers use a deposit bond for the deposit. A deposit bond, or guarantee, is an alternative to providing a deposit upon signing the contract of sale. The use of a deposit bond requires the specific approval of the seller and needs to be written into the contract of sale
Once an offer has been accepted, the agent will obtain the buyers details to enable the preparation of contracts. A buyer may be required to put their offer in writing before the vendor will consider it. The contract document outlines the terms and conditions of the sale and contains provision for:
It is important to read and understand any legal document before you sign it.
The transfer of ownership of land from the seller to the buyer is called a conveyance of land. This process is usually undertaken with the assistance of a solicitor or conveyancer.
Buyers should engage their own solicitor or conveyancer to review and advise on the vendor’s statement and the contract of sale, and ensure that the transfer of title is done correctly. They can also conduct title searches, advise about terms and conditions that need to be included in a contract, and on how different types of title may affect their ownership rights and responsibilities.
A list of local Solicitors & Conveyancers can be viewed on our website by clicking here.
Further information about buying a property can be found on the Consumer Affairs Victoria website.