Property - Preparation key to painless transactions
With interest rates coming down, changes to the “fall of hammer” auction rules and new guidelines governing how real estate agents advertise house prices, you don’t want to be caught out in the property market this Spring.
Perhaps you are in the market to buy, or are thinking of putting the family home on the market? Either way, it pays to be across the rules, regulations and laws governing real estate.
Forget “location, location”, try “preparation, preparation” if you want the experience to be a painless one.
There are laws in Victoria designed to stop agents from making false or misleading statements about property prices, in particular, under quoting the estimated selling price to potential buyers.
Consumer Affairs Victoria has released guidelines that are designed to be “used to review under quoting practices and to assess compliance with the Fair Trading Act 1999 and the Estate Agents Act 1980”.
While the price you are willing to pay is the most important factor when organising finance, don’t forget to take account of stamp duty, bank charges and other “hidden” fees such as mortgage insurance.
Get a lawyer to review the Vendor’s Statement, also called a Section 32 document, and make sure you understand what you are actually buying as well as your rights and responsibilities in relation to the property if you become the owner.
If you plan to bid at an auction, contact your solicitor before the day of the auction so that all documents can be reviewed and all the terms and conditions fully explained. Once you understand all the paperwork, you can set a realistic budget and be ready to bid with full confidence. Get to the auction early, do a final inspection and make sure you understand the auction rules.
Specific laws apply to the conduct of auctions and the rules agents must follow both before and during the auction. Before the auction, the agent must comply with the Sale of Land Act Regulations 2005 (Vic), which includes producing an auction information statement and providing, in writing, the rules applying to the auction.
At the auction, the agent must declare the laws that apply to the auction and whether there will be co-owner and/or vendor bids received at the auction. The Sale of Land Act 1962 (Vic) prohibits the agent from accepting dummy bids to push up the price of the property during the auction. Auctioneers must indicate bidders on request.
Changes to the Sale of Land Act Regulations 2005 (Vic) mean that bids made after the fall of the hammer cannot be accepted by the auctioneer, unless the vendor or successful bidder refuses to sign the contract of sale following the auction.
If you are selling, you are responsible for the accuracy of your Vendor’s Statement, or Section 32, which will contain information about rates, the property title, zoning, notices, orders and building approvals.
A lawyer can help prepare this document, as well as draw up the Contract of Sale. Apart from price, other terms the Contract covers include the settlement date, chattels that form part of the sale and issues such as planning restrictions.
Victorians now have a new Contract of Sale for real estate transactions that began on 28 September. The new Contract replaces both the Contract Note and the old Contract of Sale. Apart from simplifying and reducing costs involved in the conveyancing process, buyers and sellers should notice little practical difference in the sale process.
When it comes to real estate a lawyer can:
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advise on any contractual issue including your rights and obligations;
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check the information given in the Vendor’s Statement on your behalf and advise you of your rights if false information has been given or necessary information has not been disclosed;
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negotiate contractual terms favourable to you and pursuant to your instructions;
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represent your interests if a dispute arises;
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ensure compliance with legislation and conduct relevant searches; and
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act for you in property settlements.
More information
Useful website
http://www.consumer.vic.gov.au/- for more information on buying and selling property.
Disclaimer: The information in this newsletter is not intended to be a complete statement of the law relating to the issues raised. Accordingly, no person should rely on this information without first obtaining specific advice from Brendan Kelly or Sam Marash of our office. | 
