Selling your residential property in Victoria is likely to be one of the most significant financial transactions you will ever make.
The sale of a property is managed by conveyancing laws that are complex and can be overwhelming.
Appointing a suitable professional at an early stage is essential so that you understand your obligations as a seller and prepare the various compulsory documents.
I want to sell my residential property in Victoria, what is the first thing I should do?
Most vendors (sellers) appoint a real estate agent to sell their property on their behalf.
The conduct of real estate agents is regulated by legislation, and they must fulfill these obligations before they are able to act on your behalf. It is important to note that things such as commission and advertising costs are usually negotiable. You may also be able to negotiate changes to the actual real estate agreement (agency agreement).
Your agent can organise many functions on your behalf, including marketing the property to attract prospective buyers, organising house inspections and open houses and arranging auctions.
Your rights and obligations when selling your home in Victoria
Conveyancing involves the transfer of real estate ownership from one person to another. Small mistakes or oversights during the conveyancing process may lead to significant problems in the future.
The best chance of ensuring that no mistakes are made during your sale is to obtain advice from an experienced property lawyer and to ensure that you have a compliant contract in place before marketing your property.
A conveyancer or property lawyer will ensure that you are aware of all conveyancing requirements in Victoria and will assist you with understanding your rights and obligations regarding disclosure requirements and the section 32 vendor statement.
What steps do I take to sell my residential property in Victoria?
- Provide a section 32 vendor statement to an intending purchaser before a contract of sale is signed
The vendor statement must include all relevant details which may affect the state of the property, including certificate of title search, council planning and information certificates and contaminated land certificates, 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 certain information that may not be on hand during an inspection.
Failing to include vital information in a vendor statement may have serious legal ramifications including the possible cancellation of a purchase by the buyer.
- Draft a Contract of Sale and have it ready for potential buyers
There are two types of contract of sale for the sale of residential property in Victoria, a private 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 and purchaser’s names
- details of their respective lawyer/conveyancer
- the agreed purchase price
- special conditions
- where an auction is held other clauses are included
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% of the purchase price, which may be negotiable. The deposit is payable to the agent who must act as a “stake holder” upon the signing of the contract of sale.
If after the cooling off period (if relevant) the purchaser defaults, you may be entitled to terminate the contract of sale and keep the deposit (and/or sue for damages).
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 cooling-off period is for the benefit of the purchaser.
There are a few situations in which the cooling-off period does not apply, including when the property is sold at a public auction.
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 deposit and retained by the seller (Vendor).
What happens after my property is sold?
The period between exchange of signed contracts and settlement is usually between thirty and ninety days, however, you can try to negotiate a longer or shorter period.
At settlement, rates and other recurrent property outgoings 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
Selling your residential property can be a complicated task!
If a vendor does not meet all the legal requirements, they are exposing themselves to loss of the sale and possible legal action.
If you or someone you know wants more information or needs legal help or advice, please contact Alpass & Associates on 03 9725 0377 at Kilsyth or 9088 8664 at Rosebud or email [email protected].