Conveyancing Information for Sellers
It is our role to safeguard your interests throughout the Conveyancing process. From your first decision to sell your property right through to completion, it is important that you consult us at each stage and keep us aware of all changes to your circumstances. Importantly, do not sign any contract without first seeking our advice.
Conveyancing involves a number of processes, some quite complex. They include:
Dealing with your estate agent
Vendor’s Section 32 Statement
Early release of deposit monies
Discharge of Mortgage
A number of questions commonly arise. They include:
Question 1: What is the role of the estate agent?
The agent’s objective is to introduce you to prospective buyers and to sell your property. Agents earn a commission when your property is sold and are obliged to inform you of the rate of commission they will charge and the marketing/advertising costs associated with the sale of your property. This information will be provided to you when you sign a sale authority with the agent.
Question 2: What happens to deposit monies?
Purchasers are required to pay a deposit which is normally 10% of the purchase price. Deposit monies are required under legislation to be held by your estate agent or solicitor on trust. Deposit monies are released to vendors at settlement unless you obtain an early release of these monies.
Question 3: How can I obtain early release of the deposit monies?
If you would like to have access to the deposit monies prior to settlement, you must notify us and we will give the buyer the necessary notice (a Section 27 statement). This notice details information about your mortgage which is only obtainable from your mortgagee. Due to Privacy Act concerns, mortgagees will not provide such details to third parties and therefore we will require you to request the necessary information from your mortgagee. Any delays we experience in receiving the necessary information will delay the early release of the deposit monies.
Question 4: When does the estate agent deduct commission and marketing costs?
Once deposit monies are released, the estate agent is entitled to deduct their commission and marketing costs from the deposit.
Question 5: Do agents sometimes prepare a contract note?
Yes. It is quite common for agents to prepare a contract note. In these instances you should ensure that the details inserted into the contract note by the agent accurately represent your understanding of the agreement that has been reached. You should be aware that provided the agent is acting within the authority given to them by you, statements made by the agent on your behalf will be legally binding on you.
Question 6: What is the “Vendor’s Section 32 Statement”?
These should be prepared by lawyers. A seller of property in Victoria must provide buyers with a statement known as a Section 32 statement before a contract is presented to and signed by the buyer. The purpose of this statement is to provide specific information about the property, for example, information in relation to planning and rating; details as to services connected; and any building works that have been undertaken in the previous 7 years. It is particularly important that this property information is correct as an incorrect or inadequate statement can result in the buyer being able to withdraw from the contract. Any delays experienced in receiving the necessary information that we require may delay the sale of your property.
Question 7: What is the difference between a contract prepared by Nevett Ford and a contract prepared by the real estate agent?
When a buyer is found for your property, the offer to purchase will be presented to you in writing. The buyer’s offer will be contained in either a contract note prepared by your estate agent, or a contract of sale prepared by Nevett Ford. Both documents are equally enforceable and are valid methods of selling your property. If you require special conditions, it is best that we prepare the contract of sale so that is individually tailored to suit your particular circumstances.
Question 8: At what point does the contract of sale become a legally binding document?
The purchaser’s signature on the document represents an offer and the contract does not become legally binding until you have agreed to all the terms stipulated by placing your signature on the contract. Sometimes, buyers will request that the contract be made conditional upon certain matters being satisfied. If such conditions are inserted by the buyer the contract will not commit the buyer until the contract becomes unconditional, eg. the buyer may make an offer subject to the buyer obtaining finance to proceed with the purchase. Once finance is approved, the sale becomes unconditional and binding on both parties.
Question 9: How do I organise removal of the mortgage from the property?
In order to settle the sale of the property, you will need to have your financier remove their mortgage from the property. Financiers often require considerable notice to prepare the discharge of mortgage and your written authority will be required in order for documents to be prepared. We shall notify your financier of your sale, but they may require specific documents to be signed by you which they will forward to us for your signature.
Question 10: How does the money for my house get paid?
“Settlement” is the name given to the meeting which takes place between the seller’s and buyer’s lawyers and the relevant financiers to actually receive payment for your home. In return, we organise the handover to the buyer’s representative of the certificate of title which proves ownership of the property by you. At settlement we also hand over a transfer and discharge of mortgage documents to the buyer’s representative to enable them to be registered as the new owners. It is not necessary for you to attend settlement, as we do this on your behalf.
Question 11: Do I have to do anything to help you arrange settlement?
We make the arrangements for you and shall advise you of the nett proceeds that you could expect to receive at settlement closer to the date. You will need to tell us how you would like the proceeds of your sale to be paid. You will also need to organise the removal of your furniture and, once the property is vacant, leave the keys to your property with your estate agent. You should instruct your agent not to hand over the keys to the purchaser until we have confirmed settlement has been completed. After settlement, the purchaser will be able to collect the keys to the property from your estate agent.
Question 12: Is the purchaser entitled to a pre-settlement property inspection?
Yes, the purchasers are entitled to inspect the property a few days before settlement and your estate agent will make these arrangements and show the purchaser through the property.
Question 13: Is there anything that we need to do after settlement has taken place?
Yes, it is important that you provide us with details for your new telephone number and forwarding address so that we can pass on any relevant information to you. As the vendor, you are responsible for the payment of municipal and water rates up to the date of settlement. We will provide you with a statement of adjustments which illustrates how these amounts were adjusted on your behalf. We will notify the municipal council and the water board of your sale as part of the conveyancing process, but you will need to arrange for disconnection of services such as power, gas and telephone.
Lastly, you should leave the keys for the property with your estate agent.
Author: Cathy Drake
Published: 4 May 2018