Selling real estate in Victoria

When you offer real estate for sale it is best to have a “Vendor Statement” prepared to show to prospective purchasers. This must be given to a purchaser prior to contract so it makes sense to have it ready so there is no delay in getting a buyer signed up.

The Statement also assists with marketing because it gives a prospective purchaser useful information about the property.

This document is prescribed by Section 32 of the Sale of Land Act and is often referred to as a “Section 32 Statement” or a “Vendor Statement”.

I regularly prepare these statements for vendors and obtain any documents to be attached such as title search, registered plan, easements, rights or way, building issues, subdivision issues, zoning information, council and water rates, etc. Also Owners Corporation details and levies.

There are a wide variety of details and documents which may need to be included in a Section 32 Statement depending on the nature of the property. The legislation has 12 pages setting out what must be included and the consequences if incorrect.

Once a buyer is found, there can be negotiations about the text of the contract before the buyer exchanges contracts. For example, the buyer may want clauses allowing for pest and building inspections or time to confirm finance approval. You may or may not agree.

In any event, unless an auction is involved, the buyer of residential property has a “cooling-off” period of 3 business days and may pull out within that period without giving a reason.

Either I or your real estate agent prepares the contract of sale.

If the property is not an existing residence, for example, if it is a new build residence, or if it is commercial, there will be Goods and Services Tax issues to be addressed in the contract. An existing residence is normally exempt and there can be exemptions for some commercial sales and for some rural sales.

I regularly liaise with a client’s accountant to make sure GST implications are correctly addressed.

You may also need to factor in capital gains tax if the property is not your dwelling.

When the contract is unconditional, a “Workspace” is opened in the electronic conveyancing system and the representatives of each of the parties operate in that electronic Workspace to progress the matter towards settlement. I am an accredited system user and I represent and sign for you in the system 

There are formal requirements before the electronic conveyancing system can be used for your transaction. You must sign a prescribed “Client Authorisation” for me to operate in the system on your behalf. Additionally, your identity must be formally verified. This means you must, in person, with your identification documents (typically both your driver licence and passport), attend either myself or an independent certifier like the Post Office.

One other participant in the system, if you have a mortgage, will be your mortgagee. I regularly assist clients to have their bank initiate its steps to be ready for settlement.

“Foreign Resident Capital Gains Withholding” applies unless you obtain a clearance from the Australian Taxation Office. I regularly assist clients obtain this clearance. Without a clearance, the purchaser is required to retain 15% of the purchase price and pay it direct to the Australian Taxation Office.

Near to the time for settlement, calculations are made for adjustment of council and water rates and strata levies, etc. I handle this on behalf of clients. For example, if you have unpaid instalments, your money is used to pay these on settlement but, if you have paid, the purchaser reimburses you for that part of the rating period still remaining after the settlement date. Also, for example, if you have used water and not been billed yet, an estimate is made based on usage so that the purchaser is compensated. This is because the purchaser will be paying the bill when it is received.

When settlement occurs, I sign off for you in the electronic conveyancing system. Upon your mortgagee and the purchaser representative and the purchaser’s mortgagee all signing off, settlement takes place (transfer of title to the land) and the electronic system automatically pays your mortgagee, any rates or outgoings still to be paid and then deposits the balance proceeds of sale into your bank account. Usually clear funds the same day. If your real estate agent is holding the deposit, then the agent will deduct its commission and expenses and pay the balance to you direct.

Please note: The foregoing text is a generalised guide only and may not cover all the requirements for your particular situation.