Selling your residential property is one of the most significant financial transactions you’ll ever make.
The sale of a property is managed by conveyancing laws that can be overwhelming and complex for someone who has not had experience in dealing with them.
Appointing a suitable lawyer at an early stage is important in ensuring you understand all contracts and agreements required for the sale of your property.
I want to sell my property, what is the first thing I should do?
Most vendors (the seller) will appoint a real estate agent to sell their property on their behalf.
Real estate agents owe you obligations and these must be communicated to you in writing before they are able to act on your behalf. It is important to note that things such as advertising costs and the amount of commission charged are usually negotiable with the estate agent.
There are many functions an agent can undertake on your behalf, such as attracting prospective buyers and organising house inspections.
To ensure you don’t miss out on all the benefits available from an estate agent’s agreement, we recommend you speak to one of our experienced property lawyers.
We especially recommend you seek legal advice from a property lawyer if you decide to sell your property without a real estate agent.
Your rights and obligations when selling your home.
Conveyancing involves the transfer of real estate ownership from one person to another. Small mistakes or oversights during the conveyancing process can lead to significant problems in the future.
Your best chance of ensuring that no mistakes are made during the sale of your home is to seek advice from an experienced property lawyer.
A property lawyer will help ensure you comply with all conveyancing requirements in Victoria. They can also assist you in understanding your rights and obligations in relation to things such as, dealing with your mortgagee, planning and zoning restrictions, Section 32 (vendor’s statement) and your contract of sale.
What steps do I need to take if I want to sell my property?
- Provide a Section 32 (vendor’s statement) to an intending purchaser before a contract of sale is signed.
The vendor’s statement be compliant with applicable legislation and must include all relevant details which may affect the state of the property, such as, Certificate of title search, council planning and information certificates, contaminated land, owners corporation details, amongst other things. This information helps the buyer make an informed decision as to whether they want to proceed with the purchase of your property. It is an essential part of the conveyancing process and discloses all information that isn’t on hand during an inspection.
Failing to include vital information in a vendor’s statement may cause serious legal ramifications later down the track. This is why we strongly recommend you speak to an experienced property lawyer.
- Have a Contract of sale drafted and on hand for potential buyers
There are two types of contracts of sale for residential property in Victoria, a contract of sale, and an auction contract. You need to be sure you understand all the clauses in your contract of sale.
The contract of sale should include things such as:-
- details of the property,
- vendor’s and purchaser’s names
- details of their respective lawyer/conveyancer, and
- agreed purchase price.
Every property is unique and it is therefore important to turn your mind to whether there are any special conditions required to be drafted to protect your legal interests as a vendor. To ensure your contract of sale contains all the necessary details under the law, we recommend you speak to one of our experienced property lawyers.
The contract of sale becomes legally binding once the vendor and purchaser have both signed it. The purchaser will need to pay a deposit of 10% (this amount is negotiable) of the purchase price to the vendor on signing the contract of sale.
If for whatever reason the purchaser is in default of the contract of sale outside of the cooling off period, you may be entitled to terminate the contract of sale and keep the deposit.
Cooling off period
Usually, a cooling-off period of three business days applies to private sales of residential and small rural property sales in Victoria. The purpose of the cooling off period is to give buyers time to exit the contract and begins from the date you sign the contract of sale. When purchasing property in Victoria, Section 31 of the Sale of Land Act 1962 states that buyers are entitled to a cooling off period. They have 3 clear business days in which to change their mind and withdraw from the contract of sale.
It is important to note that cooling rights do not apply in every situation so it is important to get expert advice.
Generally, the only consequence for cancelling the purchase during the cooling off period, is that $100 or 0.2% of the purchase price (whichever is greater) will be deducted from the purchaser’s deposit.
What happens after my property is sold?
The period between exchange and settlement of a property is usually between thirty to ninety days, however, you can try to negotiate a longer or shorter period if required.
During settlement, all rates and other recurrent outgoings regarding the property are adjusted between the purchaser and vendor and the balance of the purchase price is paid in exchange for the transfer documents and the certificate of title.
When the change of ownership occurs, your lawyer or conveyancer will notify all relevant authorities on your behalf.
Conclusion
It is clear from the above that selling your residential property can be a complicated task!
If a vendor does not meet all the necessary requirements of a contract of sale and other relevant legal documentation, they are possibly exposing themselves to legal action down the track. This is why we strongly recommend you speak to one of our experienced property lawyers.
If you or someone you know wants more information or needs help or advice, please contact us on (03) 9592 3356 or contact us today.
