Safeguarding Your Property Purchase: A Closer Look at Contracts

Paying careful attention to contracts and the information they contain is crucial when purchasing any kind of property. The contract of sale, which often includes a vendor’s statement, encompasses vital financial, planning, and legal details that determine whether you proceed with the purchase. 

These details may involve title restrictions like easements or covenants, information about outgoings such as council rates and land tax, building approvals and notices of proposed works, the impact of the planning scheme or zoning on the property, and verification of the property title. It’s important to note that contracts vary by state and type of transaction, so seeking qualified legal counsel specific to your region is essential before signing any agreements.

Get professional legal counsel

Seeking legal assistance is a must for buyers to ensure that their plans for property development won’t be held up by pre-existing clauses. Being thorough is also an advantage for property owners, as incorrect or incomplete details in the contract may allow the buyer to withdraw before settlement and potentially claim damages if discrepancies are discovered afterwards.

Know the commonly used documents

The exclusive sale authority, exclusive auction authority, and exclusive leasing/management authority are three commonly used documents in real estate transactions. These forms establish exclusivity for the vendor/landlord and the agent, allowing the vendor/landlord to sell or lease only through the designated agent and granting the agent exclusive rights to sell or lease the property. Working with an agent who will prioritise your best interests is always ideal – make sure you follow any instructions, and check the industry codes of conduct if you’re ever in doubt. 

Clearly define and state the fee structure 

Vendors/lessors should be aware that agents’ fees and marketing expenses were deregulated in 1995. Agents must inform vendors/lessors that their commissions and outgoings are open to negotiation before any authority is signed.

Let the conveyancers do their magic to smooth out the process

Conveyancing involves more than just checking rates, preparing the Transfer of Land document, and handing over the keys. It is the process of transferring property ownership from one person to another. Thorough research of the title is necessary to ensure there are no liabilities or encumbrances passed on to the new owner, involving inquiries about rates, planning, zoning, and orders issued by public authorities. 

Additionally, stringent mortgagee requirements must be met. Common issues include caveats and covenants attached to the property, unapproved extensions, discrepancies in property size, and damaged or missing inclusions. 

Conveyancers offer a cost-effective option compared to solicitors, usually charging an all-inclusive fee. However, it’s important to verify that the conveyancer has adequate professional indemnity insurance and access to a solicitor at no additional cost if needed.

While DIY conveyancing kits are available for those willing to attempt it themselves, it’s important to be aware of the numerous pitfalls involved, including the need for indemnity insurance.

If you have any questions at all about contracts, get in touch with our dedicated team to get the best possible advice regarding your property purchase.

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