This is it! You’re ready to sign your contract. If you’ve been reading the Your Property Australia website you’ll know that you should have at least already spoken to your lawyer by now. 

Your lawyer will be able to review the contract BEFORE you sign…it’s simply much easier to walk away if there are serious issues. With that in mind here are the top 5 things to do before you sign a Contract of Sale.

Inspect The Property. Properly.

Just like in Compton, a drive by is unacceptable. You have to get into that property and give it a good shake! Because once you sign that Contract of Sale, the Vendor is only obligated to keep it in the same condition as when you signed that document. 

If something is broken, faulty or you would like to have it fixed before settlement, now is the time to do a thorough inspection and find out what that is. Your Property Australia encourages our buyers to take their YPA checklist and fill in any areas that need our attention. From there we can draft a special condition which will ensure that your rights are protected.

Secure Your Finance

If you’re putting pen to paper without having your finance secured then alarm bells should be ringing. Even if you believe you have an excellent chance of securing finance the process can take weeks and even months if the banks are busy. These things take time and filling in the documents and processing that paperwork can easily absorb a couple of weeks in itself. With the average settlement time between 60 and 90 days, you will start to feel unnecessary pressure and stress when your settlement date is creeping closer and you still haven’t got approval for the money to pay for your property. 

Understand the Contract of Sale

It’s simply not good enough to just sign and hope. If you are waiting to engage a legal professional to handle your property transaction then at the bare minimum, do yourself a favour and read the Contract of Sale! Click here to read a basic guide to reading a Contract of Sale here

Understand the Vendor Statement

Take a moment to read our guide ” Reading a Vendor Statement which will give you a basic guide to looking through a crucial component of the Contract of Sale featured here. The Vendor Statement is the important information about the property that the Vendor is required by law to tell you before selling the property.

Talk to Your Property Australia.

Do you qualify for a First Home Owners Grant or a reduction in the stamp duty payable on your new property?

Click here for more information on the First Home Owners Grant

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Also known as a Section 32, a Vendor Statement includes all of the information that you need to know about the property you are buying or selling.

Why is it called a Section 32?

A Vendor Statement is also called a Section 32 simply because it is included in Section 32 of the Sale of Land Act. In accordance with this section, A Vendor must give to a purchaser (before they sign the contract of sale) a statement signed by the Vendor that complies with Section 32.

Understanding your Vendor Statement

If you are following along with a Vendor Statement for a property you are interested in purchasing, this is what you are likely to find.

Vendor Statement Cover/Signing Page

Most Vendor Statements follow a very similar structure. They typically begin with a cover sheet that is signed by the Vendor who by signing confirms that the information in the following pages is correct.

Register Search Statement

If you’re looking for a certificate of title in the vendor statement then you’re likely to be disappointed. Proof of ownership in property is more often included in the Register Search Statement which will give you some important basic information about the property.

For a detailed explanation of a Register Search Statement, please click here

Plan of Subdivision

The Plan of Subdivision can differ depending on the age of the property you are purchasing. Older properties can have a very dated looking Plan of Subdivision, whilst new developments are now prepared using digital drawing software.

If you are purchasing in a high rise development, the Plan of Subdivision will include every level of the property and could extend to a number of pages.

For a detailed explanation of a Plan of Subdivision, please click here

Land Tax Statement

The Land Tax Statement is prepared by the State Revenue Office and will provide details of any current land tax that is owing or due to be paid on the property.

For a detailed explanation of a Land Tax Statement, please click here

Owners Corporation Search

There are usually two components to owners corporation information in a Vendor Statement.

If you are purchasing in developments with common property then there will be an owners corporation governing the owners of those properties. The first thing is to check the Owners Corporation search which will tell you a) if there is an Owners Corporation and b) who they are.

The next document will be an Owners Corporation Certificate which will include the Owners Corporation Rules, minutes from the last meeting of the Owner Corporation members and a certificate detailing the rates, whether they are up to date and other important you need to know before becoming a member.

For a detailed explanation of an Owners Corporation search and Owners Corporation Certificate, please click here

Water Rates Certificate/Notice

Your Water Rates Certificate/Notice will contain the current water charges for the property, including the usage for water and sewerage. This document will let you know if the current owner has paid their water bills and allow your lawyer to prepare adjustments on those amounts accordingly.

For a detailed explanation of a Water Rates Certificate/Notice, please click here

Council Rates Certificate/Notice

Your Council Rates Notice is also known as a ‘Land Information Certificate’. This will contain the current council charges for the property, including your rates. This document will let you know if the current owner has paid their council rates (and if there are any arrears) and allow your lawyer to prepare adjustments on those amounts accordingly.

For a detailed explanation of a Council Rates Certificate/Notice, please click here

Planning Property Report

A Planning Property Report provides important information on the overlays and zones that impact the property. This document contains information on whether the property is a bushfire zone and the different planning overlays that will impact the works that can be completed on the property in the future.

For a detailed explanation of a Planning Property Report, please click here

You might remember seeing a news article in September 2018 about a Melbourne man who had purchased a home with illegal building works. Click here to read more.

Hao Dong had purchased the property at auction 2 years before and after a complaint that it was being used an unregistered boarding house, the council investigated and issued a notice that most of the house was built without the proper permits.

Let’s take at some of the mistakes that Hao made and how you can avoid them when purchasing your property.

“[The real estate agent] didn’t mention anything so I assumed everything [was] legal”

There are a few mistakes that Hao has made in this situation

  1. Relying on representations (or lack thereof) from the real estate agent. The real estate agent is ‘selling’ the property and beyond taking you through the property and showing you the features, you should refer all legal questions to your lawyer.
  2. Don’t assume anything about a property. It is likely that the Vendor in this transaction knew that they needed (or might have needed) a permit for all (or at least some) of the works on the property. They deliberately didn’t disclose that fact.
  3. Be an engaged purchaser. If you look at the photos of the property then you will see pretty quickly that there is a difference between the original building and the add ons. Quite simply they look different. If you notice that the character of the home is different in the external buildings then ask the question and get confirmation.

Click here to read our tips for dealing with real estate agents.

Now that we know what Hao did wrong, let’s take a look at 4 steps you can take to avoid making the same mistakes.

  1. Check that the character of the home is consistent. Be aware at open for inspections. It is completely normal to have a detached garage, but does it look like it was built at the same time as the house? Have they aged the same? If the house is weathered but the garage looks brand new then it may have been built at a later date. Did the Vendor have a permit for the new building?
  2. Start asking questions. If you believe that there are additional building works on the property, start asking tough questions. The real estate agent will be able to direct you to the Vendor’s lawyer. Get confirmation from the source that any works on the property were completed using the proper procedure.

If we have learnt anything from Hao’s experience it is that whilst the Vendor-Purchaser relationship doesn’t have to be adversarial, it should be viewed professionally. Not everyone selling a property is doing so honestly.

The most important thing you can do when inspecting a property is talk to your lawyer before you sign on the dotted line. Avoiding these sorts of problems before you purchase the property is so much easier than dealing with them during the settlement period or in the future when you own the property.

To read more about the consequences of not having a building permit please click here.