WINDSOR LEGAL
CONVEYANCING INFORMATION
Answers to FAQs are provided below. Click on sub-links for other conveyancing guides.
CONVEYANCING FAQs
What is conveyancing?
Conveyancing is the legal process required to complete a transfer of property from one party to another. A property in Australia can’t be legally transferred without the involvement of a lawyer or conveyancer. Some of the things we do include checking title information, drafting contracts and Section 32 Vendor statements, checking restrictions and lease information, advising our clients on what they need to do to comply with the law and the contract conditions, check property information, deal with banks and ensure they are ready for settlement, check financial information and draft settlement statements, apply for stamp duty concessions, inform authorities of the change in ownership, pay outgoings as part of the settlement, ensure correct funds are transferred at settlement, pay stamp duty and complete the transfer of the property with the Land Titles Office. The process is fairly standardised for all properties, but each step requires attention to detail, organisation and strict compliance with deadlines. If steps or dates are missed it can be disastrous and it can cost a lot of money. This is why its best to appoint a qualified person you can trust who can complete the job properly.
What are Conveyancing costs?
Conveyancing fees are what you pay us for our work. We charge a fixed fee (see Fees page on this website). Conveyancing is needed to ensure that the property is transferred with legal certainty. Disbursements are the things we need to buy to complete the conveyancing work. The main things we buy are property certificates from the Council, Water Authority, State Revenue Office, Owners Corporation (if applicable) and any other certificates which must to go in the Section 32 Vendor Statement. If you are selling, we will tell you what we need to put in the Section 32 and how much it will cost. If you are buying, we need to order property certificates mainly to find out what is owing on the property before settlement. If we order certificates, its to protect your interests. We try to keep our disbursement spend as low as possible. Disbursement estimates and Conveyancing fees are listed on the Fees page on this website.
Beware of super-cheap conveyancing quotes because this could mean that the firm needs to cut corners to complete the work. Some large conveyancing firms are just a huge network of contractors and some are using off-shore workers to complete the work. There are firms who are focused mainly on growth and offer very low rates to attract as many customers as possible. They end up with too much work and can’t give enough attention to all their clients. Some super low conveyancing quotes are not genuinely all inclusive. It takes a lot of time to fully research all the conveyancing companies in the market.
If you appoint Windsor Legal you can trust that you have an experienced lawyer acting for you and you will know exactly how much it will cost you from the outset. We offer high quality service for an average fee.
When considering all the costs involved in buying or selling property (the high price of property, bank fees and interest, LMI, stamp duty, land registry fees, agents fees and marketing costs, taxes) the cost of conveyancing is the least expensive part of the process. Its also an essential part of the process and it can’t be avoided.
Can I do my own conveyancing?
It was possible in the past. Since October 2018 almost all conveyancing in Victoria is completed electronically on PEXA which is an online settlement platform used by banks, state revenue and land registration authorities. Only authorised parties such as lawyers and conveyancers are able to use PEXA. Even if you could complete it yourself, the time and energy it would take to learn the conveyancing process is not worth the $1,000 or so dollars you would save. The risk of getting it wrong is huge. The slightest mistake could result in a delay to settlement which could cost you thousands of dollars. Leave it to the experts. Just appoint someone experienced who you can trust and you can relax in the knowledge that its being done properly.
What is the difference between a Lawyer and a Conveyancer?
Lawyers have completed a law degree and other work experience and are licensed by the Legal Services Board (Vic) to complete any kind of legal work including conveyancing. Conveyancers have completed a conveyancing course and hold a conveyancing licence. Both must hold professional indemnity insurance. Conveyancers are only allowed to complete conveyancing work, no other legal work. A conveyancer will need to consult a lawyer when a serious issue arises in a conveyance.
Some conveyancing firms are run by lawyers but they employ conveyancers to complete the conveyancing work. Conveyancers may not be cheaper than solicitors. The industry is very competitive and both lawyers and conveyancers are offering competitive and similar rates. Our work is completed by an experienced lawyer in Melbourne.
When appointing a lawyer or conveyancer you should make sure they are experienced and well regarded. You should feel comfortable with them and they should have enough time to return your calls and emails
What is a Section 32 Vendor Statement?
This is the term often used in Victoria to refer to the main documents exchanged between the Vendor and Purchaser. The Vendor is the name we use for the Seller in Victoria. When you are interested in a property you will ask the agent for the Section 32 or Vendor Statement (this refers to Section 32 of the Sale of Land Act (Vic) whereby a Vendor must give certain information about the property to a Purchaser). The main documents exchanged will actually consist of the Contract of Sale and the Section 32 Vendor Statement.
When you are selling you will need to give the Contract and Section 32 Statement to your agent to give to prospective purchasers. Your agent will ask you if you have a conveyancer to prepare these for you. They need these documents before they can market the property for sale. The agent may recommend a lawyer or conveyancer to you, though you have no obligation to use that person to complete the work for you.
If you are selling, we will ensure that the Section 32 statement we prepare for you contains all the required information and complies with the law. If you fail to provide the correct information in the Section 32 as required by law, the Purchaser can cancel the contract any time before settlement. The statement must include information about the title, plan, restrictions including leases, outgoings including council, water, taxes, Owners Corporation information and building or permit information in some cases.
If you are purchasing, you will ask the agent for the Contract and Section 32 Statement if you are interested in a property. The agent will then email them to you. You then have the option to have a lawyer review the documents for you before you sign them. We can review the Contract/Section 32 before you sign. Just get in touch with us to request more information about a contract review.
Should I get the Contract and Section 32 checked before I buy a property?
If you are a Purchaser, it advisable that you have these documents reviewed by a lawyer before you sign them. Ask the agent to email you the documents and you can forward them to us for review. We will provide you with a detailed review report which will explain the contract and property information in simple language and point out any red flags. We will check the title for any restrictions, we will advise you on zoning/planning information and we will advise you of the outgoings involved in owning the property. We will let you know if any important information or documents are missing. We may also suggest changes to the contract or draft additional special conditions. A review is especially advisable when purchasing an apartment because there may be important Owners Corporation information such as repairs, rules and special levies which you need to understand.
A review is entirely optional, but it is good practice. Review fees apply (See the Fees page on this website). Please give us at least 3 days notice when requesting a review report. We can prepare reports urgently where necessary (though a surcharge will apply).
What does Due Diligence mean?
This refers to the checks a purchaser should carry out before signing a contract. In addition to getting the Contract and Section 32 Statement reviewed you should do the following: check the land or unit boundaries and look out for any building works that should be further checked. You should check the condition and safety of the building. Ideally you should obtain a building inspection report (we can provide recommendations for builders who can inspect). Check the items included in the property and make sure they are working. Look at the locality and check on any developments proposed on neighbouring land. Ask the agent if there is anything important to be disclosed about the property such as recent damage, proposed works, flooding or flammable cladding. If you are going to develop the land you should contact the Planning Department of the local council to obtain advice on your proposed plans.
If you are buying a private sale property, you might try to complete your due diligence checks, including building inspection and contract review in the cooling off period. Your time though will be limited during the cooling off period since you only have 3 business days after you make a formal offer.
Do I have a Cooling Off Period?
Purchasers in Victoria have 3 clear business days to cancel a contract. The purchaser can cancel for any reason. This period starts the first business day after the purchaser signs a contract and ends at close of business on the third day. It’s a common misconception that the cooling off period starts when the Purchaser and Vendor have signed the contract, that’s not correct, since it starts the day after the Purchaser signs, even if the Vendor hasn’t signed yet. If you want to cancel the contract you must do so in writing. If you have appointed us as your lawyers, we can send out the cooling off notification for you. The agent will then refund the deposit you paid minus 0.2% of the purchase price which they are entitled to retain. Beware that a Cooling Off period does NOT apply to auctioned properties or sales which occur in the 3 business days before or after an auction.
Is Buying at Auction different to buying a Private Sale property?
Auction contracts are intended to be final. There is no cooling off period and you cannot make the contract subject to finance or subject to a building inspection if you buy at auction. You are buying the property in the condition it is in at the auction. Before attending an auction make sure you have full finance approval (or the bank has checked the value of the property, you have been given a confident preapproval and you have additional funds available if your loan isn’t approved at the requisite level). Inspect the property with a builder before the auction. Complete your due diligence and contract review before the auction. Make sure you can pay 10% deposit at the auction (usually in the form of a bank cheque for the 10% of the lowest bid you intend to make issued to the agent’s trust account or be able to transfer funds by EFT immediately at the end of the auction, contact the agent’s office for their trust account details).
Sometimes Vendors will consider private offers before an auction. Ask the agent if the Vendor is open to private offers before an auction. Note that if you sign the contract 3 business days before or after the auction date, you will not have the benefit of a cooling off period.
Private sale contracts allow a lot more room for negotiation. They also include a 3 day cooling off period. You should still complete your contract review and due diligence checks, but you have the option to make the contract subject to finance and/or subject to a satisfactory building inspection. You can inspect the property and ask if the Vendor will fix any damage or you may want to negotiate inclusions or other changes. If the Vendor agrees (through the agent) you can include changes in the Contract.
Should I ask for a Subject to Finance condition or a Subject to a Building Inspection condition?
Some Purchasers want to make sure that they have full loan approval before they buy a property. This is especially a good idea for first home buyers who have limited funds and are entirely reliant on a home loan to complete a purchase. You first need to negotiate the inclusion of the finance condition with the agent and you would normally put this in your offer. Some Vendors are open to finance conditions, others are not. It often depends on the property and the state of the market at the time. Auctioned properties cannot be bought subject to finance.
Flammable cladding is increasingly becoming a lending risk. If you are buying a unit built between 2000-2021, we recommend that you ask for a Subject to Finance condition. If the building has flammable cladding, your bank may decline your loan application. Its best to protect yourself with a finance condition.
For more information on flammable cladding
If the Vendor has agreed to the finance condition, details about the required loan can be written into the contract by the agent when you are making an offer and you generally have between 7-14 days to get your finance approved. Speak to your broker or banker during that time and tell them you are about to make an offer subject to finance. They should try to complete an auto-valuation for you and look at your income details to make sure that you have a good chance at getting the loan before you make an offer (even if its conditional upon finance). If you need to withdraw because your finance was not approved, you should ask your broker or banker for some written proof of the loan not being approved at the requisite level. We can advise you if this occurs and send out notifications to the agent and Vendor’s lawyer if you need to withdraw from the contract.
If you need a mortgage broker urgently, we recommend that you contact What if We Finance, see their website at www.melbournemortgage.com.au Spiro Kolokithas is a very experienced broker. We have worked with them through the years and they have assisted our clients to get loans approved and banks organised for settlement.
Subject to a Building Inspection may be another condition you are considering. A building inspection condition is advisable if you want to be certain of the condition of a property but only want to complete a building inspection once you have made an offer on a property. Our preference is for building inspections to be completed before an offer is made, but we understand that may not always be practical. If you are making an offer subject to a satisfactory building inspection, you should discuss this with the agent and they will write the condition in to the contract when you make a formal offer. You will generally have 3-10 days to complete the building inspection. Most builders can be quite quick in completing inspections and may only need a few days. We can assist with drafting a building condition that provides you with adequate protection. We would recommend building inspections for all kinds of property, whether the building is old or new.
How do I Make an Offer?
You can make an offer when the agent has said the Vendor is open to considering private offers. It may be that the property is being sold by private sale or the Vendor is considering offers before an auction. You can negotiate with the agent and express your interest in a written offer by email for example. If we complete a contract review for you, we can provide you with suggested wording for an offer. If the agent thinks the Vendor would like your offer and the negotiations continue, you can make a written, formal offer. This will be in the form of the Contract of Sale/Section 32 being filled in by the agent (or you), signed by you and presented to the Vendor by the agent. You must also pay part of the deposit at that time, usually $1,000-2,000 to the agent’s trust account. Its fully refundable if the Vendor doesn’t accept your offer. Paying this part-deposit ensures that the contract is complete the moment the Vendor accepts the offer and signs the contract. If you haven’t paid any money on making an offer, the contract is not complete and the Vendor could accept another offer.
If you would like us to review the Contract and Section 32, please send it to us by email before you sign the Contract.
The agent is asking for the deposit to be released to the Vendor before settlement. Should I agree and sign the Section 27 notice they have given me?
In Victoria it is possible for Vendors to get the deposit released to them before settlement if certain conditions are met. Firstly, there must not be a caveat on the property. If they have a mortgage on the property it must not be for more than 80% of the purchase price (and they must provide written proof from their bank). In addition, there must not be extra conditions in the contract that benefit the Purchaser, for example, the Vendor is completing some building works or repairs for the benefit of the purchaser before settlement. Those are the only circumstances in which a Purchaser can refuse to release the deposit. Once a Purchaser or their lawyer/conveyancer receives a request for release of the deposit (known as a Section 27 notice) they have to do something within 28 days or the deposit will be automatically released at the end of that time. Options are 1. Check that certain conditions are met and then sign the release (checks should be completed by your lawyer before you sign) 2. Sign the Acknowledgement section only to confirm that you received the notice or 3. Don’t sign at all if you think you have a reason to object (contact us for advice). If you wish to object to the release, you have 28 days to do so after receiving the Section 27 notice. At the expiry of the 28 days, the deposit will be released if you did nothing in that time. Our preference is that our clients don’t sign any part of a Section 27 notice and they should forward the notice to us so we can complete the requisite checks. If the agent has asked you to sign the Acknowledgment section only, you agree and sign and then do nothing else, the deposit can be automatically released after 28 days.
If you are a Vendor who is keen to get the deposit released, we advise you not to commit to any other purchases based on the deposit release, just in case its not possible to get release or the release takes longer than expected. You may notice that the agent regularly asks you about the Section 27 notice. Agents are keen to get the deposit released because they are able to deduct their fees and expenses from the deposit release. We suggest you speak to us first and we will work with you and the agent to facilitate release.
Can I change the Settlement date?
This is the date you have agreed to complete the transfer. It will be written into the contract by the agent. This is the date that keys and money must be exchanged. A Settlement date may also be called a Completion date. Settlement dates are not intended to be changed. They can be changed only if the Vendor and Purchaser agree to a different date. Sometimes a Vendor will charge a Purchaser a fee if the settlement date is changed (we don’t charge our clients for settlement date changes). Its easier to ask for an earlier settlement date rather than a later one. Vendors definitely don’t like delays to settlement and if the Purchaser cannot settle on the agreed date they will charge penalty interest and ask for other compensation to be paid by the Purchaser. Delaying settlement can be very costly. Similarly, Vendors must not delay the settlement because they are also liable to compensate the Purchaser. You should pick a settlement date you know you can meet. Ideally, a date between 45-60 days after the contract is signed will give all parties enough time to settle. The minimum time can be 30 days but this is only recommended where banks are not involved (ie the purchaser is paying cash for a property).
Do I need to attend settlement?
No, you don’t need to attend settlement. In fact no one attends most settlements in Victoria because they are completed online! These days even titles are electronic (all titles held by banks in Victoria are electronic). Transfers of funds, payment of stamp duty, title and mortgage registrations all occur electronically on Pexa. Its our job to make sure that Pexa is accurate and up to date and the settlement can occur on the agreed date. If you are interested, we can give you access to Pexa so you can watch the progress of the transaction.
On the settlement day all you need to do is ensure that you are contactable, either by telephone or e-mail or both. We will give you updates on how settlement is going and when its completed. Once we tell you the settlement is completed, you can ask the agent for keys to the property. We suggest that you avoid moving on the settlement day, just in case an unexpected delay occurs. This is very rare (we strive to make sure all settlement dates are met) but we would rather not have you inconvenienced if it does occur.
Answers to FAQs are provided below. Click on sub-links for other conveyancing guides.
CONVEYANCING FAQs
What is conveyancing?
Conveyancing is the legal process required to complete a transfer of property from one party to another. A property in Australia can’t be legally transferred without the involvement of a lawyer or conveyancer. Some of the things we do include checking title information, drafting contracts and Section 32 Vendor statements, checking restrictions and lease information, advising our clients on what they need to do to comply with the law and the contract conditions, check property information, deal with banks and ensure they are ready for settlement, check financial information and draft settlement statements, apply for stamp duty concessions, inform authorities of the change in ownership, pay outgoings as part of the settlement, ensure correct funds are transferred at settlement, pay stamp duty and complete the transfer of the property with the Land Titles Office. The process is fairly standardised for all properties, but each step requires attention to detail, organisation and strict compliance with deadlines. If steps or dates are missed it can be disastrous and it can cost a lot of money. This is why its best to appoint a qualified person you can trust who can complete the job properly.
What are Conveyancing costs?
Conveyancing fees are what you pay us for our work. We charge a fixed fee (see Fees page on this website). Conveyancing is needed to ensure that the property is transferred with legal certainty. Disbursements are the things we need to buy to complete the conveyancing work. The main things we buy are property certificates from the Council, Water Authority, State Revenue Office, Owners Corporation (if applicable) and any other certificates which must to go in the Section 32 Vendor Statement. If you are selling, we will tell you what we need to put in the Section 32 and how much it will cost. If you are buying, we need to order property certificates mainly to find out what is owing on the property before settlement. If we order certificates, its to protect your interests. We try to keep our disbursement spend as low as possible. Disbursement estimates and Conveyancing fees are listed on the Fees page on this website.
Beware of super-cheap conveyancing quotes because this could mean that the firm needs to cut corners to complete the work. Some large conveyancing firms are just a huge network of contractors and some are using off-shore workers to complete the work. There are firms who are focused mainly on growth and offer very low rates to attract as many customers as possible. They end up with too much work and can’t give enough attention to all their clients. Some super low conveyancing quotes are not genuinely all inclusive. It takes a lot of time to fully research all the conveyancing companies in the market.
If you appoint Windsor Legal you can trust that you have an experienced lawyer acting for you and you will know exactly how much it will cost you from the outset. We offer high quality service for an average fee.
When considering all the costs involved in buying or selling property (the high price of property, bank fees and interest, LMI, stamp duty, land registry fees, agents fees and marketing costs, taxes) the cost of conveyancing is the least expensive part of the process. Its also an essential part of the process and it can’t be avoided.
Can I do my own conveyancing?
It was possible in the past. Since October 2018 almost all conveyancing in Victoria is completed electronically on PEXA which is an online settlement platform used by banks, state revenue and land registration authorities. Only authorised parties such as lawyers and conveyancers are able to use PEXA. Even if you could complete it yourself, the time and energy it would take to learn the conveyancing process is not worth the $1,000 or so dollars you would save. The risk of getting it wrong is huge. The slightest mistake could result in a delay to settlement which could cost you thousands of dollars. Leave it to the experts. Just appoint someone experienced who you can trust and you can relax in the knowledge that its being done properly.
What is the difference between a Lawyer and a Conveyancer?
Lawyers have completed a law degree and other work experience and are licensed by the Legal Services Board (Vic) to complete any kind of legal work including conveyancing. Conveyancers have completed a conveyancing course and hold a conveyancing licence. Both must hold professional indemnity insurance. Conveyancers are only allowed to complete conveyancing work, no other legal work. A conveyancer will need to consult a lawyer when a serious issue arises in a conveyance.
Some conveyancing firms are run by lawyers but they employ conveyancers to complete the conveyancing work. Conveyancers may not be cheaper than solicitors. The industry is very competitive and both lawyers and conveyancers are offering competitive and similar rates. Our work is completed by an experienced lawyer in Melbourne.
When appointing a lawyer or conveyancer you should make sure they are experienced and well regarded. You should feel comfortable with them and they should have enough time to return your calls and emails
What is a Section 32 Vendor Statement?
This is the term often used in Victoria to refer to the main documents exchanged between the Vendor and Purchaser. The Vendor is the name we use for the Seller in Victoria. When you are interested in a property you will ask the agent for the Section 32 or Vendor Statement (this refers to Section 32 of the Sale of Land Act (Vic) whereby a Vendor must give certain information about the property to a Purchaser). The main documents exchanged will actually consist of the Contract of Sale and the Section 32 Vendor Statement.
When you are selling you will need to give the Contract and Section 32 Statement to your agent to give to prospective purchasers. Your agent will ask you if you have a conveyancer to prepare these for you. They need these documents before they can market the property for sale. The agent may recommend a lawyer or conveyancer to you, though you have no obligation to use that person to complete the work for you.
If you are selling, we will ensure that the Section 32 statement we prepare for you contains all the required information and complies with the law. If you fail to provide the correct information in the Section 32 as required by law, the Purchaser can cancel the contract any time before settlement. The statement must include information about the title, plan, restrictions including leases, outgoings including council, water, taxes, Owners Corporation information and building or permit information in some cases.
If you are purchasing, you will ask the agent for the Contract and Section 32 Statement if you are interested in a property. The agent will then email them to you. You then have the option to have a lawyer review the documents for you before you sign them. We can review the Contract/Section 32 before you sign. Just get in touch with us to request more information about a contract review.
Should I get the Contract and Section 32 checked before I buy a property?
If you are a Purchaser, it advisable that you have these documents reviewed by a lawyer before you sign them. Ask the agent to email you the documents and you can forward them to us for review. We will provide you with a detailed review report which will explain the contract and property information in simple language and point out any red flags. We will check the title for any restrictions, we will advise you on zoning/planning information and we will advise you of the outgoings involved in owning the property. We will let you know if any important information or documents are missing. We may also suggest changes to the contract or draft additional special conditions. A review is especially advisable when purchasing an apartment because there may be important Owners Corporation information such as repairs, rules and special levies which you need to understand.
A review is entirely optional, but it is good practice. Review fees apply (See the Fees page on this website). Please give us at least 3 days notice when requesting a review report. We can prepare reports urgently where necessary (though a surcharge will apply).
What does Due Diligence mean?
This refers to the checks a purchaser should carry out before signing a contract. In addition to getting the Contract and Section 32 Statement reviewed you should do the following: check the land or unit boundaries and look out for any building works that should be further checked. You should check the condition and safety of the building. Ideally you should obtain a building inspection report (we can provide recommendations for builders who can inspect). Check the items included in the property and make sure they are working. Look at the locality and check on any developments proposed on neighbouring land. Ask the agent if there is anything important to be disclosed about the property such as recent damage, proposed works, flooding or flammable cladding. If you are going to develop the land you should contact the Planning Department of the local council to obtain advice on your proposed plans.
If you are buying a private sale property, you might try to complete your due diligence checks, including building inspection and contract review in the cooling off period. Your time though will be limited during the cooling off period since you only have 3 business days after you make a formal offer.
Do I have a Cooling Off Period?
Purchasers in Victoria have 3 clear business days to cancel a contract. The purchaser can cancel for any reason. This period starts the first business day after the purchaser signs a contract and ends at close of business on the third day. It’s a common misconception that the cooling off period starts when the Purchaser and Vendor have signed the contract, that’s not correct, since it starts the day after the Purchaser signs, even if the Vendor hasn’t signed yet. If you want to cancel the contract you must do so in writing. If you have appointed us as your lawyers, we can send out the cooling off notification for you. The agent will then refund the deposit you paid minus 0.2% of the purchase price which they are entitled to retain. Beware that a Cooling Off period does NOT apply to auctioned properties or sales which occur in the 3 business days before or after an auction.
Is Buying at Auction different to buying a Private Sale property?
Auction contracts are intended to be final. There is no cooling off period and you cannot make the contract subject to finance or subject to a building inspection if you buy at auction. You are buying the property in the condition it is in at the auction. Before attending an auction make sure you have full finance approval (or the bank has checked the value of the property, you have been given a confident preapproval and you have additional funds available if your loan isn’t approved at the requisite level). Inspect the property with a builder before the auction. Complete your due diligence and contract review before the auction. Make sure you can pay 10% deposit at the auction (usually in the form of a bank cheque for the 10% of the lowest bid you intend to make issued to the agent’s trust account or be able to transfer funds by EFT immediately at the end of the auction, contact the agent’s office for their trust account details).
Sometimes Vendors will consider private offers before an auction. Ask the agent if the Vendor is open to private offers before an auction. Note that if you sign the contract 3 business days before or after the auction date, you will not have the benefit of a cooling off period.
Private sale contracts allow a lot more room for negotiation. They also include a 3 day cooling off period. You should still complete your contract review and due diligence checks, but you have the option to make the contract subject to finance and/or subject to a satisfactory building inspection. You can inspect the property and ask if the Vendor will fix any damage or you may want to negotiate inclusions or other changes. If the Vendor agrees (through the agent) you can include changes in the Contract.
Should I ask for a Subject to Finance condition or a Subject to a Building Inspection condition?
Some Purchasers want to make sure that they have full loan approval before they buy a property. This is especially a good idea for first home buyers who have limited funds and are entirely reliant on a home loan to complete a purchase. You first need to negotiate the inclusion of the finance condition with the agent and you would normally put this in your offer. Some Vendors are open to finance conditions, others are not. It often depends on the property and the state of the market at the time. Auctioned properties cannot be bought subject to finance.
Flammable cladding is increasingly becoming a lending risk. If you are buying a unit built between 2000-2021, we recommend that you ask for a Subject to Finance condition. If the building has flammable cladding, your bank may decline your loan application. Its best to protect yourself with a finance condition.
For more information on flammable cladding
If the Vendor has agreed to the finance condition, details about the required loan can be written into the contract by the agent when you are making an offer and you generally have between 7-14 days to get your finance approved. Speak to your broker or banker during that time and tell them you are about to make an offer subject to finance. They should try to complete an auto-valuation for you and look at your income details to make sure that you have a good chance at getting the loan before you make an offer (even if its conditional upon finance). If you need to withdraw because your finance was not approved, you should ask your broker or banker for some written proof of the loan not being approved at the requisite level. We can advise you if this occurs and send out notifications to the agent and Vendor’s lawyer if you need to withdraw from the contract.
If you need a mortgage broker urgently, we recommend that you contact What if We Finance, see their website at www.melbournemortgage.com.au Spiro Kolokithas is a very experienced broker. We have worked with them through the years and they have assisted our clients to get loans approved and banks organised for settlement.
Subject to a Building Inspection may be another condition you are considering. A building inspection condition is advisable if you want to be certain of the condition of a property but only want to complete a building inspection once you have made an offer on a property. Our preference is for building inspections to be completed before an offer is made, but we understand that may not always be practical. If you are making an offer subject to a satisfactory building inspection, you should discuss this with the agent and they will write the condition in to the contract when you make a formal offer. You will generally have 3-10 days to complete the building inspection. Most builders can be quite quick in completing inspections and may only need a few days. We can assist with drafting a building condition that provides you with adequate protection. We would recommend building inspections for all kinds of property, whether the building is old or new.
How do I Make an Offer?
You can make an offer when the agent has said the Vendor is open to considering private offers. It may be that the property is being sold by private sale or the Vendor is considering offers before an auction. You can negotiate with the agent and express your interest in a written offer by email for example. If we complete a contract review for you, we can provide you with suggested wording for an offer. If the agent thinks the Vendor would like your offer and the negotiations continue, you can make a written, formal offer. This will be in the form of the Contract of Sale/Section 32 being filled in by the agent (or you), signed by you and presented to the Vendor by the agent. You must also pay part of the deposit at that time, usually $1,000-2,000 to the agent’s trust account. Its fully refundable if the Vendor doesn’t accept your offer. Paying this part-deposit ensures that the contract is complete the moment the Vendor accepts the offer and signs the contract. If you haven’t paid any money on making an offer, the contract is not complete and the Vendor could accept another offer.
If you would like us to review the Contract and Section 32, please send it to us by email before you sign the Contract.
The agent is asking for the deposit to be released to the Vendor before settlement. Should I agree and sign the Section 27 notice they have given me?
In Victoria it is possible for Vendors to get the deposit released to them before settlement if certain conditions are met. Firstly, there must not be a caveat on the property. If they have a mortgage on the property it must not be for more than 80% of the purchase price (and they must provide written proof from their bank). In addition, there must not be extra conditions in the contract that benefit the Purchaser, for example, the Vendor is completing some building works or repairs for the benefit of the purchaser before settlement. Those are the only circumstances in which a Purchaser can refuse to release the deposit. Once a Purchaser or their lawyer/conveyancer receives a request for release of the deposit (known as a Section 27 notice) they have to do something within 28 days or the deposit will be automatically released at the end of that time. Options are 1. Check that certain conditions are met and then sign the release (checks should be completed by your lawyer before you sign) 2. Sign the Acknowledgement section only to confirm that you received the notice or 3. Don’t sign at all if you think you have a reason to object (contact us for advice). If you wish to object to the release, you have 28 days to do so after receiving the Section 27 notice. At the expiry of the 28 days, the deposit will be released if you did nothing in that time. Our preference is that our clients don’t sign any part of a Section 27 notice and they should forward the notice to us so we can complete the requisite checks. If the agent has asked you to sign the Acknowledgment section only, you agree and sign and then do nothing else, the deposit can be automatically released after 28 days.
If you are a Vendor who is keen to get the deposit released, we advise you not to commit to any other purchases based on the deposit release, just in case its not possible to get release or the release takes longer than expected. You may notice that the agent regularly asks you about the Section 27 notice. Agents are keen to get the deposit released because they are able to deduct their fees and expenses from the deposit release. We suggest you speak to us first and we will work with you and the agent to facilitate release.
Can I change the Settlement date?
This is the date you have agreed to complete the transfer. It will be written into the contract by the agent. This is the date that keys and money must be exchanged. A Settlement date may also be called a Completion date. Settlement dates are not intended to be changed. They can be changed only if the Vendor and Purchaser agree to a different date. Sometimes a Vendor will charge a Purchaser a fee if the settlement date is changed (we don’t charge our clients for settlement date changes). Its easier to ask for an earlier settlement date rather than a later one. Vendors definitely don’t like delays to settlement and if the Purchaser cannot settle on the agreed date they will charge penalty interest and ask for other compensation to be paid by the Purchaser. Delaying settlement can be very costly. Similarly, Vendors must not delay the settlement because they are also liable to compensate the Purchaser. You should pick a settlement date you know you can meet. Ideally, a date between 45-60 days after the contract is signed will give all parties enough time to settle. The minimum time can be 30 days but this is only recommended where banks are not involved (ie the purchaser is paying cash for a property).
Do I need to attend settlement?
No, you don’t need to attend settlement. In fact no one attends most settlements in Victoria because they are completed online! These days even titles are electronic (all titles held by banks in Victoria are electronic). Transfers of funds, payment of stamp duty, title and mortgage registrations all occur electronically on Pexa. Its our job to make sure that Pexa is accurate and up to date and the settlement can occur on the agreed date. If you are interested, we can give you access to Pexa so you can watch the progress of the transaction.
On the settlement day all you need to do is ensure that you are contactable, either by telephone or e-mail or both. We will give you updates on how settlement is going and when its completed. Once we tell you the settlement is completed, you can ask the agent for keys to the property. We suggest that you avoid moving on the settlement day, just in case an unexpected delay occurs. This is very rare (we strive to make sure all settlement dates are met) but we would rather not have you inconvenienced if it does occur.
