Buying Property in Victoria

Because conveyancing laws are so different in every state, when buying property we believe that the two most important things when selecting a conveyancing company is that they only operate in Victoria, and they only use qualified conveyancers.

For us that is a yes to both, so you can rest assured your matter will only be handled by an experienced professional who knows the Victorian conveyancing system well.

If you are buying property, below is some more information to help you prepare for your purchase:

Private Sale

In Victoria, offers for buying property are usually made by a purchaser signing a contract of sale. Unless another timeframe is written in the contract, the vendor has 3 business days to accept your offer. If the vendor accepts your offer, they will co-sign sign the contract and then the property is sold and the contract is binding.

The settlement date is negotiable between you and the vendor, but is usually 30, 60 or 90 days.

If you are borrowing money for your purchase, make sure that:

You don't sign a contract until you have finance pre-approval.
You get the agent to tick the Loan Box and complete the “Loan” section of the contract, which is usually located on page 4 or 5 of the contract.
The bank, the loan amount and the approval date are inserted, and the loan “Approval Date” needs to be at least 14 days from the date you make your offer.

Auction Sale

Auction sale contracts do not have a 3-day cooling off period and are not usually subject to any conditions such as finance or building & pest report clauses, so it's important to have your finance pre-approval and do all of your property and contract checks before the auction takes place.

A combined building and pest report can usually be obtained for around $600.
You can get these reports done before the auction, but only with the approval of the vendor and usually at your own expense.

Deposit

At least a portion of the deposit is usually paid at the time an offer is put on the property and before a sale contract has been entered into.
Initial deposits (or holding deposits) are normally 0.25% of the purchase price.
Once a contract has been signed by the purchaser and vendor, the full deposit can be paid.
There are no laws setting the amount of the deposit for a property sale in Victoria, but they are usually 10% of the purchase price.

We can review any contract for you before you sign, and let you know if there are any issues with the contract or the property.
(This takes all the stress out of buying property as it provides you with a clear picture of the property and the contract.)

Finance Clause Date

When you are buying property and have the ability to request that the contract is altered to include a finance clause date, this can protect you by allowing you to terminate the contract if your finance is not formally approved for some reason. Because finance pre-approval does not guarantee finance formal approval.

The finance clause date is usually 2 weeks after the contract date. This usually allows for enough time for your bank to formally approve your loan. A one-week extension is usually applied for if the bank is not ready by this finance clause date.

But:

To terminate a contract under the finance clause, a number of conditions need to have to be met. Such as applying for finance straight away, and getting a letter of finance decline from a banking institution.
To receive a 1 week finance clause extension, the vendor must approve the request.
Initial finance clause extension applications are usually approved as it is common for more time to be needed by banks to process a formal loan application.

We will monitor this important date for you and make sure it does not pass without either receiving your formal finance approval, or obtaining a finance clause extension.

Building and Pest Report

Another thing to consider when buying property in Victoria is if you want to request that the contract includes a building & pest report clause. These reports will give you a detailed report on the state of the property and can highlight issues such as building defects, rising damp, movement in walls, safety hazards, and pest infestations.

But:

To be able to terminate a contract under this clause, the report would need to identify either a “major building defect” or “major structural defect” (depending on the wording in the clause) in the property and include this wording somewhere in the report.

Even if this report doesn't identify a major defect or infestation in the property, they still provide you with a very clear picture of the state of the property and could create an opportunity to negotiate for repairs or treatments.

Other Reports

If you are buying property and haven't signed a contract yet, here are some other reports with links that you can use to get more information on the property you are interested in:

VicRoads report - Whether VicRoads (The Roads Corporation) has any approved proposals for works requiring the purchase or compulsory acquisition of land.
Property Planning Report - When buying property, this free service provides quick and easy access to both property and planning information.
Soil test reports – Site assessments are undertaken by environmental consultants to identify potential contamination.
Priority Sites Register – EPA Victoria maintains this free report that shows a list of the areas that have a current clean up or pollution abatement notice.
EPA Certificate – If the above report is too general then a certificate can be ordered for a specific property.
Flood level Certificate – If you’re buying property, you can request a flood level certificate to check for any flooding in the area.

Statement of Adjustments

When buying property, the statement of adjustments is usually prepared by the purchasers conveyancer and sent to the sellers (vendors) conveyancer about a week before settlement.

It includes all of the financial charges on the land, such as the water & land rates, owners corporation fees, land tax & lease payments, and adjusts on these figures so that it works out perfectly fair for both parties at the day of settlement.

An example of this would be if you had just received and paid your yearly land rates bill, but then sold your house a few weeks later. The adjustments would reclaim the amount of money that is equal to proportion of time that you would not be the owner of the property for the year. In this case you would get nearly all of the money back (11 months worth or 91%).