What is a holding deposit and why should I be paying it?
Usually, if a holding deposit is paid, the vendor and the real estate agent will agree to take the property off the market for a few days before contracts are exchanged and full deposit arranged. However, it is important to understand that neither party is bound unless and until contracts are signed and exchanged.
How much is the full deposit?
This can vary, however it is usually 10%.
What happens to the deposit after I have paid it?
Your deposit is usually held by the real estate agent in a trust account until the sale is finalised and then passed onto the vendor.
How much is stamp duty?
This is not the same for every property because it is based on the value of the property and needs to be calculated on a case by case basis. You can use a land transfer calculator from the State Revenue Office here.
What are adjustments?
Adjustments are typically calculated by a buyer’s conveyancer and is an important part of the buying process. Adjustments means determining your portion of the different rates for the property such as council and water. The buyer would have paid these rates for a certain period and is likely to move out before that period is up and so they will not receive the full benefit of their payment.
What is a caveat?
This is a notice that can be lodged with the Land Titles Office to note that you have an interest in that property. This lets others know of your interest and helps protect your interest as purchaser.
Written offer to purchase real estate here in Victoria
This is usually the purchaser signing the contract. This contract will outline the offer price, the settlement time frame and any other requirements and special conditions. When the vendor signs this contract that is called the act of acceptance. Once both parties have signed the contract it is binding and an exchange has taken place. There are some cases where an agent will have the buyer sign a written offer before they sign the contract of sale.
What is settlement?
Settlement is when all parties involved meet and exchange the various documents necessary for registration and the purchaser pays the balance of the purchase price. Once the Transfer of Land form is registered the legal title passes to the new owner, however this may not be on the same day as settlement due to the time frames of Land Titles Office.
Do I need to attend the settlement?
No, you don’t. Your conveyancer will attend on your behalf and will contact you as soon as the process is complete and settled. At this time, you can then organise to collect your keys. You can usually collect your keys from the real estate agent.
When is the contract of sale signed?
This is signed after section 32 Vendor Statement has been read thoroughly. The contract is signed by both parties after the vendor agrees to the buyer’s offer and both parties are happy with the terms outlined. A conveyancer can review the contract and undertake negotiations on your behalf before this stage to ensure protection if there is a conflict or a party defaults but you have the choice to sign before or after a conveyancer has read through it.
Can you change the offer after signing the contract?
Yes, provided that the vendor has not yet agreed to the offer. However, there may be cases where a contract is binding without the contract being signed. Seek more information from your conveyancer regarding this before making any decisions.
Can you break the contract after the cooling off period has finished?
No, you can’t. However, there may be conditions in the contract that can allow you to end the contract if a certain event does/does not occur. A good example of this is if the contract is conditioned on your finance being approved within a certain time frame.