Taking the Next Step

Written by view.com.au in Buying on June 2, 2011

Taking the Next Step

Ultimate First Home Buyers Guide

Finding out Reasons For Selling

Once you have found a property that you are interested in buying it is a good idea to find out a bit more information about the property and reasons the owner is selling before taking the next step.

Questions to Consider

  • Has the owner already purchased elsewhere or needs to move for their job? This resents an opportunity to possibly negotiate the price as the vendor may need to sell quickly.
  • How long has the property been on the market? The time-frame the property has been on the market will give you an indication of interest in the property. If the property has been on the market for a while it is important to probe the agent to find out why.
  • How many offers have been made on the property? If it is a private sale, finding out how many other offers have been made is important. If there is a lot of competition it may mean you need to go in with a higher offer to secure the property.
  • Has the property been passed in at auction (if so, what was the highest bid?). If a property has been passed in and you would like to make an offer finding out what the highest bid was will help you work out what your starting offer should be.
  • Is the vendor open to offers before auction? If you are keen to buy a property and don’t want to wait until auction find out if the seller is willing to take offers before the auction. You never know they may accept your offer.

The Contract of Sale

The contract of sale is the key document which commits you to the purchase of a property. A copy of the contract may be made available to the buyer and can be obtained from the vendor through the agent. It is also important, as the buyer, to have a solicitor or conveyancer check the document.

The contract contains:

  • Particulars of the sale such as details of the property
  • Names of the vendor and buyer
  • Vendor’s estate agent
  • Price of the property
  • The deposit paid
  • Balance owing at settlement
  • Date of settlement (the day you become the owner)
  • Special and general conditions
  • Additional documentation relevant to the property (alternatively known as the Vendor Statement)

Additional Documentation

In most states in Australia there will be additional documents attached to the contract which provides the buyer with detailed information about the property. As this document’s contents and name differs by state the table below will help you determine what the document is referred to and its contents in your state.

Victoria (VIC)

Vendor Statement Section 32

What is it? The Vendor Statement is a document prepared by or on behalf of the vendor’s solicitor/conveyancer. The document informs you, the potential buyer, of any relevant information about the property you must be aware of.

What does this document include?

This document may include;

  • Building restrictions and copies of any permits issued for work carried out
  • A copy of the title showing existing boundary measurements of the land
  • Details of any mortgage over the property
  • Details of any outgoings such as any rates, body corporate fees or any other charges that may apply

Is it compulsory? In Victoria it is compulsory for the vendor to provide a

potential purchaser with the Vendor’s Statement before a contract of sale is signed. If the property is being sold at auction, a copy of the Vendor’s Statement and the contract of sale must be available for inspection before the auction.

Note: If the Vendor’s Statement contains incorrect or insufficient information, as a buyer you should discuss these issues with your solicitor/conveyancer.

New South Wales (NSW)

Schedule 1 Prescribed Documents

What is it? The Schedule 1 Prescribed Documents are documents prepared by the vendor’s solicitor / conveyancer which inform you, the potential buyer, of any relevant information about the property you must be aware of.

What do these document include?

These documents may include;

  • Copies of all deeds and restrictions on the use of land
  • Details of any mortgage over the property
  • Details of any outgoings such as any rates, body corporate fees or any other charges that may apply

The full contents of Schedule 1 Prescribed Documents can be found in the Conveyancing (Sale of Land) Regulation 2010 (NSW).

Is it compulsory? In New South Wales it is compulsory for the agent to have a copy of the Schedule 1 Prescribed Documents with the contract of sale before they can market the property.

South Australia (SA)

Form One Disclosure Statement

What is it? It is the vendor’s sales agent’s responsibility to prepare the Form One Disclosure Statement and to make all the inquiries necessary to do so accurately. This document discloses any information about the property which may negatively alter the value of the property. This is to ensure that you, the potential buyer, know exactly what you are purchasing.

What does the document include?

This document may include;

  • Building restrictions and copies of any permits issued for work carried out
  • A copy of the title showing existing boundary measurements of the land
  • Details of any mortgage over the property
  • Details of any outgoings such as any rates, body corporate fees, or any other charges that may apply

Is it compulsory? In South Australia it is compulsory for the vendor to provide a potential purchaser with a Form One Disclosure Statement before a contract of sale is signed.

Western Australia (WA)

Seller’s disclosure Statement

What is it? The Seller’s Disclosure Statement is a document prepared by the vendor’s solicitor/conveyancer for the estate agent. This document discloses any relevant information about the property which you, the potential buyer, must be aware of.

What does the document include?

This document may include;

  • Building restrictions and copies of any permits issued for work carried out
  • A copy of the title showing existing boundary measurements of the land
  • Details of any mortgage over the property
  • Details of any outgoings such as any rates, body corporate fees, or any other charges that may apply

Is it compulsory? In Western Australia it is not compulsory for a seller to provide the Seller’s Disclosure Statement to a potential buyer.

Queensland (QLD), Northern Territory (NT), Tasmania (TAS)

Currently there is no requirement under legislation in Queensland for a seller to provide relevant information about the property to prospective buyers.

Australian Capital Territory (ACT)

Required documentation for the sale of residential property or land

What is it? In the Australian Capital Territory, the vendor of a residential property must provide certain documents and reports before the property is offered for sales. These documents disclose any relevant information about the property which you, the potential buyer, must be aware of.

What do these document include?

These documents may include;

  • An assessment of the physical condition of the property structure
  • Statement of any provisions that may influence or restrict what can be done to the house or land

Is it compulsory? In the Australian Capital Territory it is compulsory for the vendor to provide a potential purchaser with the required documents before the property is offered for sale.

Sometimes it is a good idea to hire a professional building inspector, surveyor or architect to provide a professional building inspection report for the property you intend to purchase. This can be particularly important if you have noticed any potential structural issues like cracking but still wish to proceed with the purchase.Professional Building Inspections

A qualified inspector will know what to look for and will see through any cosmetic improvements covering up faults that may be missed by the untrained eye. The inspector will provide a written report listing faults in the property, whether they can be repaired and how much these repairs are likely to cost.

You may be able to use this report to negotiate the price and conditions in the contract with the vendor.

Buyers Tip: The fee for a professional inspection service is small compared with the cost of buying a property requiring extensive unforeseen repairs. Even if major faults are not found, you can use minor faults discovered in the pre-purchase inspection as the basis of an ongoing maintenance program if you decide to buy the property.