The purchase of a property involves many considerations, such as where you want to live, the amount of finance available to you, the type of property you wish to purchase, and the conveyancing process.
Know your rights
Before you pay a deposit (usually 10%) for the purchase of a property, you should ensure you understand your legal rights and obligations, including whether or not you are entitled to a cooling-off period.
Cooling off period
Generally, a cooling-off period of three business days applies to private sales of residential and small rural property in Victoria. The purpose of the cooling-off period is to give you time to consider the purchase. This period commences from the date you sign the contract of sale.
A consequence of electing to cancel the contract of sale during the cooling-off period is that the vendor can deduct $100 or 0.2% of the purchase price (whichever is greater) from the deposit prior to it being refunded to you.
There are a few situations in which the cooling-off period does not apply, for example, if the property is sold at or within three business days of a public auction.
Understand the contract of sale
It is important not to rush into purchasing a property. You should take the time to ensure that you have made an informed decision before signing a contract of sale.
To ensure you understand the terms and conditions in the contract of sale and that it complies with all legal requirements, we recommend you have the contract of sale reviewed by our office prior to signing.
A 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% of the purchase price to the vendor upon signing the contract of sale. You should be aware that the amount of deposit (amongst other terms and conditions in a contract of sale) is negotiable. Any terms or conditions verbally agreed to should be written into the contract of sale, so any agreements are made legally binding upon both parties.
Make sure you read and understand the Section 32 (vendor statement)
The vendor statement is an essential part of the conveyancing process and discloses all relevant information about the property to prospective purchasers. It must include all relevant details which may affect the state of the property, such as, a title search, council planning and information certificates, contaminated land, amongst other information.
What happens after I have officially purchased a property?
The period between signing the contract of sale and the settlement of a property is usually between thirty to ninety days, however, you can try to negotiate a longer or shorter period if required.
Prior to settlement, all rates and other outgoings will be adjusted between the vendor and purchaser. Your conveyancer will complete this by way of a Statement of Adjustments.
Once settlement has been effected, your conveyancer will notify all relevant authorities on your behalf.
Conclusion
If you fail to meet all your obligations as a purchaser under a contract of sale, you are possibly exposing yourself to legal consequences. You should ensure that you understand all legal documentation involved in purchasing a property before committing to a purchase. For these reasons, we strongly recommend you speak to our conveyancers.
If you or someone you know wants more information or needs assistance or advice, please contact us on 03 9857 0099 or email melbourne@maeveobrien.com.au.