Buying a property: What steps are involved?

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Examine the contract and other sale documents.

After you have done all your searching and think you have found a property, the first thing to do is examine the contract and other relevant documents. The principle of ‘buyer beware’ applies to land contracts. This means that particular caution should be adopted by purchasers and that expert advice should be obtained regarding the range of certificates that may be relevant to a particular property.

In Victoria, real estate agents often draw up a document called a "contract note" upon the reaching of an agreement between the parties. This document invokes and incorporates all statutory requirements and, therefore, it is important that purchasers are fully aware of their rights if they are presented with a "contract note".

If you are buying a property, the very first step before you sign any documents is to ensure that you have what is known as a “section 32 statement” or "vendor's statement". Named so after section 32 of the Sale of Land Act 1963 ( Vic ), this is a disclosure document that must be given to a purchaser before the contract is signed. It must contain specific information about the property being sold (such as information on easements or covenants, building approvals within the last seven years, and rates and charges that effect the property).

Although it seems very inclusive, you should not expect too much of this statement. The vendor is not obliged to disclose every detail that a prospective purchaser may wish to know, but only to fulfil the requirements of the Act, and no more.

Once you have come to a basic agreement and the section 32 statement has been produced, a deposit is usually paid. If you are applying for finance, you should ensure that any final contract is conditional upon the approval of your finance.

Examine the property

You should have the property measured to ensure that boundaries and size are both accurate, and determine the availability of services.

Understand Insurance

There are statutory provisions which state that, where the land/dwelling to be purchased is damaged prior to settlement, the purchaser has the right to rescind the contract. But the purchaser may wish to complete the settlement despite the damage. Making the right decision in these circumstances can result in large financial benefit. The question of insurance can be extremely complicated and a lot rides on the drafting of the contract. Purchaser's should consult their conveyancer to ensure that they are fully advised regarding their options for insurance.

Cooling-Off

In select instances, legislative provisions require a cooling-off period after the purchaser signs the contract, but before settlement. The cooling-off period means that, after signing the contact, the purchaser may "within three clear business days" give notice that they wish to terminate. If this notice is properly completed and received by the vendor or their agent, no contractual penalty can be imposed. There are a number of restrictions on the applicability of the cooling-off period. For example, the provisions do NOT apply if the:

purchaser sought independent legal advice prior to signing;
purchaser is an incorporated company;
property was bought at auction.

Your conveyancer can advise whether you are eligible to invoke this device.

Between signing and settling

This stage of the process is generally conducted "behind the scenes". It involves the acquisition of all necessary documentation, certificates, forms and conduct of final inspections. These tasks are usually completed by your conveyancer, however, you may be required to answer specific queries, or give instructions where circumstances demand it.

Settlement

The final step is the settlement at which time the Purchaser takes possession of the Property and the Vendor (or their agent) receives payment.

The Conveyancer

Generally, your conveyancer will do a number of things to assist during this busy time. These can be looked upon as either advice or services. First, the conveyancer can provide general advice as to the meaning and importance of particular legal terms (and how you might wish to use them in a contract), your specific legal obligations in relation to settlement (and whether you can avoid them), as well as advice regarding the amount of fees to be expected in the whole process. Second, your conveyancer can assist with specific services such as searching the title certificate and checking with all relevant government departments and local authorities to ensure that what you see is what you get, preparing certification and stamping documentation, calculating liabilities and any adjustments to rates or taxes and, most importantly, preparing settlement statements. All advice, services and checks are designed to ensure that nothing hinders the purchase. Expert advice is the best way to ensure that your dream purchase runs smoothly.

Contact Balben Property Transfers for Fast, Friendly, Professional service.

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