Buying a house in Victoria? Here’s what you need to know

Buying a residential property in Victoria can be a difficult process. In this article, all the useful information you need to know will be covered to help you navigate the ever-changing property market.

What is conveyancing?

Conveyancing refers to the process of transferring legal ownership from the vendor to the purchaser. Since it can be a complex and difficult process, parties may choose to engage in solicitors or conveyancers that specialise in conveyancing to ensure the transaction runs smoothly.

Step 1: Determine location for purchase of property

Start off by choosing an area or suburb that is suitable to your needs, such amenities, neighbourhood, or developmental plans. Once you have decided on the suburb, narrow down a few options which fall within your desired budget. Areas such as Fitzroy have been increasingly popular over the years as it provides for a diverse yet inclusive community near the CBD.

Be sure to consider the hidden costs of purchasing a house, as they are often missed.

Step 2: Prepare contract of sale

The contract of sale is prepared by the vendor’s solicitor, which sets out the legal obligations to be adhered by both parties. This includes but is not limited to details such as the names of the purchaser and seller, purchase price, details of the property, deposit amount and settlement date.

Additionally, purchasers must be provided with a Vendors Statement which outlines the details of the property title in compliance with legislation.

Step 3: Offer and acceptance

Once the offer made by the purchaser is accepted by the vendor, the contract is exchanged and signed by both parties. Purchasers will then be required to pay a 10% deposit of the purchase price, although this can vary from vendor to vendor.

Step 4: Building inspection

Before signing the contract of sale, the purchaser should arrange for an independent building and pest inspection.

Insurance should also be arranged to cover the property, taking into effect from the settlement date.

Step 5: Cooling off period

The cooling period commences upon the exchange of contracts and lasts for three business days in Victoria. During this period, the purchaser is entitled to reconsider the contract should they wish to terminate the sale.

However, this may not be exercised if it falls under one of these exceptions:

• Property used for industrial or commercial purposes
• Property bought on behalf of a corporate body
• The sale occurred within three business days before or after a public auction
• The property is bigger than 20 hectares and used for farming
• Where parties have previously entered into a contract under similar terms

In the event of termination, purchasers are subject to a termination penalty fee and vendors may potentially bring an action for specific performance or damages.

Step 6: Discharge of mortgage

If there is a mortgage over the property, a discharge must be organised prior to settlement date. The mortgagee will be required to provide a pay-out figure and hand over the certificate of title.

Step 7: Settlement

On the day of settlement, the conveyancer must conduct a final search on title to make sure that it is free from the creation of any new restrictions or interests.

Parties usually attend settlement in person, although the conveyancing is done through an online platform called PEXA, which requires lawyers and conveyancers to lodge the transfer documents.

Once this has been completed and title has been transferred over, the purchaser now gains legal title to the property.

 

Frequently asked questions regarding the conveyancing process

Should I get a conveyancer before making an offer?

Although you are not required to engage in a conveyancer, it is highly recommended for you to do so. Conveyancers help ensure the process of ownership transfer to run smoothly while always acting in your best interests. In addition to this, they will be able to help with adjustment prices in relation to the property, as the difference can amount to thousands of dollars.[1]

How much does it cost to get a conveyancer?

In Victoria, conveyancing costs range from $900 to $1500.  This varies between transactions and is dependent on factors such as the value of property, type of property etc.

Ask them the right questions to ensure that they are the right fit for you!

How long does the conveyancing process take when purchasing a house?

This is dependent on a range of factors such as turnover time to prepare the required documents, but it usually takes 8-12 weeks.

Are conveyancers the same as solicitors?

Solicitors are generally more expensive than conveyancers, as they are able to cover a wide range of complex legal issues and have higher levels of expertise.

Conveyancers are licensed professionals who specialise in property transfers and can assist with straightforward purchases and transfers, while solicitors are able to handle transactions that are riskier and more complex.[2]

At Action Conveyancing we are all qualified Property Lawyers – read here why you have more peace of mind when you use a Property Lawyer 

What is the difference between ‘exchange’ and ‘settlement date’?

Exchange refers to the exchange of the signed contracts of sale by both the vendor and purchaser. Parties are then legally bound by this contract and the purchaser will be required to make a deposit.[3]

Settlement refers to the final step of the whole conveyancing process. This occurs once full payment has been made and title has been transferred onto the purchaser.

If you have purchased a residential property, or have any questions about the conveyancing process, call Action Conveyancing on (03) 9486 9646.

References & helpful links:

[1] GM Law, ‘Conveyancing explained. The simple guide’, GM Law (Web page, 2022) [35] <https://www.gmlaw.com.au/what-is-the-role-of-a-conveyancing-solicitor/>.

[2] U Bank, ‘Agents, Solicitors & Conveyancers. Who does what when you’re buying a house?’, U bank (Web page) [11] < https://www.ubank.com.au/home-loans/property/agents-solicitors-conveyancers#:~:text=While%20a%20conveyancer’s%20expertise%20is,sales%20that%20contain%20more%20risk>.

[3] Bryant McKinnon Lawyers, ‘FAQs Residential conveyancing’, Residential conveyancing, Bryant McKinnon Lawyers (Web page, 2022) [8] < https://bryantmckinnon.com.au/resource/residential-conveyancing/faqs-residential-conveyancing/>.