Buying a property is one of the biggest investments you’ll make, and it’s natural to have plenty of questions before diving in. Below are the top 10 most common questions we encounter from purchasers, along with explanations to guide you through the process.
- What is the cooling-off period in Victoria?
In Victoria, buyers have a three-business-day cooling-off period after signing the contract, during which they can cancel the purchase. However, certain conditions apply, and it’s important to act quickly if you change your mind. You cannot for example cool off if you purchased within 3 days of a publicly advertised auction date for the property (before or after), nor for commercial or industrial property, farming property of 20 hectares or more, if you have previously had a contract for the same property, nor if you are an estate agent or corporate body
- What are the additional costs besides the purchase price?
Apart from the property’s purchase price, there are other costs, including stamp duty, legal fees, building inspections, loan application fees, Pexa fees, land transfer fees, insurance and potentially Lenders Mortgage Insurance (LMI).
- Do I need to conduct a building and pest inspection?
Yes, it’s highly recommended, though not legally or contractually necessary. A building and pest inspection will alert you to any structural issues or termite damage, potentially saving you from costly repairs down the track. If your contract is subject to these inspection and a major defect found then you can terminate the contract without losing your deposit.
- What’s the difference between a private sale and an auction?
In a private sale, you can negotiate the terms and price with the seller. An auction involves bidding in an open environment, where the highest bidder generally wins, but contracts are unconditional once accepted. You can add additional conditions for a private sale, such as the contract being subject to finance approval or a satisfactory building and pest inspection.
- What is a Section 32 Statement?
A Section 32 Statement, also known as the Vendor’s Statement, provides essential information about the property, including title details, zoning, easements, and other restrictions. It’s crucial to review this document before making an offer. If the vendor does not disclose the required information you can cancel the contract.
- How much deposit is required, and when do I pay it?
Typically, a 10% deposit is required when purchasing a property, which is paid when the contract is signed. However, this can sometimes be negotiated to a smaller percentage, potentially 5%, but only through private sales, not a public auction.
- What happens if my finance isn’t approved?
If your contract is subject to finance, and your finance is not approved within the agreed timeframe, you may be able to withdraw from the contract without penalty, depending on the terms agreed upon. You must however show proof that you applied for finance and were legitimately rejected.
- What is settlement, and how long does it take?
Settlement is the process of transferring ownership of the property. In Victoria, the settlement period is typically 30 to 90 days, but this can be negotiated between the buyer and seller. On settlement date the property is transferred to you and the vendor paid, if you have a bank loan, the bank will also lodge their mortgage on the title and retain control of the title.
- Do I need a conveyancer or a solicitor?
Yes, engaging a conveyancer or solicitor ensures that all legal documents are in order, and they’ll handle the transfer of ownership. They also provide advice on the contract of sale and Section 32 Statement. It is best to use the services of a solicitor who can assist you with legal issues that may arise, whereas a conveyancer cannot give you legal advice. As this is a major transaction it is best to use the services of a solicitor, the costs of either are often the same anyway.
- Can I negotiate the price of the property?
In private sales, negotiation is expected. You can negotiate the price and any conditions of the sale, such as settlement period or inclusions like appliances.
Purchasing a property can seem overwhelming, but with the right legal guidance, the process becomes much smoother. Whether you’re a first-time buyer or adding to your portfolio, having all the right information will ensure a confident purchase.
Conveyancing Right – Helping with property law. Call (03) 9028 7603 or email us at info@conveyancingright.com.au for expert advice and support.
DISCLAIMER
This is a commentary published by Conveyancing Right for general information purposes only. This is not meant to be taken as particular advice. You should seek your own legal and other advice for any question, or any specific situation or proposal, or get in touch with the writer at https://conveyancingright.com.au before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories.
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