Buying Residential Property

Review the Contract of Sale and Vendor's Statement

The foundation of any property transaction is the Contract of Sale and Vendor's Statement, often referred to as a 'Section 32'. These documents contain vital information about the property, including any encumbrances, easements, and other legalities. It's important to understand each term's implications thoroughly to avoid any surprises down the line.

Document all promises and commitments in writing

If promises are made by the seller or agent, insist that these are documented in the Contract of Sale. Verbal agreements won’t hold any weight unless they are officially recorded.

This includes chattels and fixtures. A fixture is anything that is built into the home, while a chattel is a movable possession, like a washing machine. The contract should list all chattels and fixtures, detailing what is included and excluded in the sale. This clarity prevents any misunderstanding about what you’ll get with the purchase of the property.

Get expert legal advice

Before signing anything, it's essential to have the Contract of Sale and Vendor's Statement reviewed by a qualified property lawyer. Legal professionals can uncover potential issues and ensure your interests are protected throughout the purchase process. Contact us for expert advice and guidance.

Visit the property and research the market

Visiting the property at different times of the day can help you assess noise levels, traffic, the behaviour of your potential neighbours, and any unpleasant smells in the surrounding area. This step helps ensure the property meets your expectations in various conditions.

Additionally, verifying that the property's price aligns with market prices can prevent you from overpaying.

Thoroughly inspect the property

The principle of caveat emptor, also referred to as 'buyer beware', means that the person purchasing the property is solely responsible for any quality checks. Make sure you inspect the property yourself and consider hiring professionals for building and pest inspections before signing the Contract of Sale.

Also, ensure that essential services (gas, electricity, water, sewerage, telephone, and NBN) are connected or can be connected to the property. These inspections can reveal issues that might not be immediately apparent, saving you from future costs and headaches.

Measure the land

Confirming the land's dimensions against the Title documents is a step that often gets overlooked. Ensuring the physical size and boundaries match with official records can prevent disputes and ensure you're getting what you pay for.

Be aware of restrictions and easements

Restrictions or easements can significantly affect your ownership rights and how you use your property. An easement on property in Victoria may grant others access to or use of part of the property, especially if you have shared driveways, electrical mains, or drainage, for example.

It's important to check for any registered easements (which appear on Title) and unregistered easements (private agreements). You might also consider getting legal guidance about how easements might affect your future plans for the property.

Verify compliance on renovations and extensions

If the property has undergone recent renovations or building work, verify that these were completed with the necessary permits and comply with local council regulations. Any unapproved work can become a liability and affect your insurance and resale value.

Also, check whether you will have the benefit of any builder's warranty insurance. This covers the building works for a certain number of years. Owner builders must provide certain promises (warranties) in their contracts.

Check zoning, town planning, and area developments

Checking the zoning of the property is vital. Zoning affects what you can and cannot do with the property and may impose restrictions on pet ownership, business activities, and more. Contact the local council to check whether there are any breaches of the zoning and planning provisions.

You might also want to look into any planned developments in the area. Future constructions or zoning changes can impact property value and your quality of life.

Identify lease status

Understanding the lease status of the property is crucial. Confirm whether the property is subject to an ongoing lease. If so, the terms of this lease will transfer to you upon settlement. This means you must honour the existing lease terms until their expiration.

Plan your budget, funds, and deposit

Determine your budget and secure financing before making an offer. Do you have pre-approval from a bank or other lender? Ensure you have access to enough funds to cover the deposit and consider making the purchase conditional upon obtaining finance. This means if you're unable to secure a loan, you can withdraw from the contract without penalty.

Consider rates, taxes, and government charges

When you're making an investment in property and considering your budget, it's important to be aware of the annual outgoings, including council rates, water rates, and, if applicable, owners corporation fees and land tax.

Also, be mindful of additional costs like Stamp Duty and Titles Office fees, which can add a significant amount to your overall investment.

​​Confirm your auction strategy and cooling-off period

Do you need someone to help you bid at auction? A ‘buyer’s advocate’ may be able to assist you. Also, be aware of your rights regarding cooling-off periods, which allow you to change your mind and cancel a contract under specific conditions.

Understand settlement terms

Settlement is the final stage in the property-buying transaction. Understanding and negotiating settlement terms is an essential part of the process. It's crucial to agree on a period and financial conditions that allow sufficient time for both parties to fulfil their contractual obligations. For buyers needing finance, ensure the period is long enough for loan processing.

Considerations for foreign investors

If you are not an Australian or New Zealand citizen or permanent resident, you may need approval from the Foreign Investments Review Board (FIRB) to purchase property in Australia.

This guide is a starting point for your journey into buying property in Australia. Remember, consulting with a qualified property law professional is essential to navigating property transactions safely. For further information or personalised advice, contact us.