Selling your residential property can be a daunting process, filled with both emotional attachments and the stress of handling legal and financial matters. Ensuring a smooth and stress-free sale requires familiarity with the legal requirements involved in the process, which are crucial to protect your interests.
Collaborating with a lawyer and your real estate agent can greatly simplify the process. From gathering, reviewing, and submitting essential documents to understanding local laws specific to your sale, there are numerous steps to navigate. In this post, we will outline the key steps and processes you will encounter during your sale and provide tips to help you avoid common pitfalls.
Understanding your Legal Obligations
Familiarising yourself with the laws and regulations specific to your state and region is essential. Ensure that your information sources are trustworthy and up-to-date. Whenever in doubt, contacting your agent or preferred lawyer directly can help alleviate any uncertainty. Government websites are typically reliable for understanding legal obligations, and a good starting point is the Due Diligence Checklist from Consumer Affairs Victoria.
Knowing what you are legally required to disclose about the residential property protects you from potential liabilities and can expedite the sales process by reducing administrative overhead.
In Victoria, vendors are also required to disclose all ‘Material Facts’ that they are aware of – which are any facts that would be material to the average purchaser in deciding to purchase a property. Consumer Affairs has published guidelines about what could be expected to be a material fact, however you should obtain professional advice if uncertain.
Material facts can include:
- Building damage or other defects
- Planning permit approvals, rejections and proposals – including in the area of this land
- Contamination – for example asbestos in the building, or pesticides in soil
Contract of Sale
A residential property contract of sale and disclosure documentation should, at minimum, include the following key elements:
- Sale price and dates associated with payment.
- List of the parties involved in the sale, including the purchaser, the vendor, their respective legal and agent representatives.
- A detailed property description, such as the relevant lot and plan of subdivision fo the land being sold
- Disclosure of certain costs applicable to the land – including rates charged by local council & water authorities, owners corporation levies and land tax.
- Explaining any limitations in title – for example easements, zoning, building envelopes and other key restrictions that affects the land being sold.
Agree on Sale Contract
To protect your interests in a property transaction, it’s vital to have your lawyer review the contract of sale prior to a prospective purchaser submitting their offer. Once an offer is made, making significant changes to the contract can be challenging. The usual process begins with the preparation of a vendor’s statement, followed by negotiations between the agent and the purchaser. While terms can be discussed during this stage, obtaining legal advice is essential to ensure that the contract is fair, clear, and compliant.
This stage may see some back and forth negotiations between agents or lawyers for both parties. You should only proceed with the sale once you are satisfied with the terms that have been agreed.
Settlement Preparations
Prior to settlement, your lawyer will coordinate with you to ensure everything is ready for ownership of the property to transfer to the other party. This includes preparing the transfer documentation, arranging for all relevant documents to be signed and liaison with your mortgagee to handle settlement of your outstanding mortgage.
The settlement timeframe will have been agreed on in the signed contract and will vary depending on both parties preferences. On the day of settlement, your lawyer will coordinate with the buyer’s lawyer and bank to finalise the transfer of ownership and ensure that settlement funds are paid according to your instructions.
In the lead up to settlement, the purchaser will generally arrange a final inspection to ensure property is still in good condition, so you should plan accordingly with your agent.
Transfer of Ownership
Upon the day of settlement, all property keys are handed over to the new owners and the property left vacant. Your lawyer will handle settlement payments, both to you and to ensure outstanding rates and charges are paid out. They will also ensure that all relevant authorities are informed of the transfer of ownership of the property. This will ensure that there are no unexpected and unforeseen expenses or bills sent to you after the sale. With these steps carefully executed the process of the property sale is finalised.
After the ownership transfer is complete, it is important to keep all relevant documentation for future reference or for taxation reasons..
The sale process can be difficult and daunting, but with the assistance of Pathfinder Law, we can guide you through the process of selling your residential property sale.
Our team is eager to answer any questions and ensure the smooth transition of your property to its new owners. If you are based in Victoria and have something that needs immediate attention, please contact us to schedule an appointment.
