Expert Advice

Property buyers risk plenty of pitfalls without legal advice

Katrina Condie23 July 2022
aerial shot of houses

One of the most common mistakes Canberra buyers make is heading to auction without having the contract reviewed by a lawyer or having their finances in place. Photo: File.

If you’re thinking of taking the big leap into property ownership in the ACT or surrounding regions, engage a conveyancing lawyer first-up.

Seeking conveyancing advice as soon as you start looking for a home will ensure you know exactly where you stand, and what to do, once you finally find the property of your dreams.

Only lawyers are allowed to practise residential conveyancing in the ACT.

A notary public and lawyer for more than 26 years, Velocity Conveyancing Group principal Andrew Satsias says various risks can confront buyers depending on the type of property, its zoning and the terms of sale – private treaty, auction or pre-auction.

“Buying property can be emotionally stressful and financially risky if you don’t know what to look out for,” Mr Satsias says.

“That’s why it’s important to engage a local conveyancing lawyer familiar with the region you’re buying in, and is aware of the possible pitfalls and stumbling blocks.”

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He says one of the most common mistakes Canberra buyers make is heading to auction without having the contract reviewed by a lawyer or having their finances in place.

“For an auction purchase, we need to review the contract beforehand because, if the buyers are successful, they are bound to buy. There is also no opportunity to change the terms of the contract afterwards,” Mr Satsias says.

“With auctions there’s no cooling-off period – you are bound by the full terms of the contract with no opportunity to get out without risking your full deposit and potential for further damages.”

He says buyers must ensure they have finance in place before attending an auction, and should set themselves a clear budget.

“If they are relying on finance, buyers can’t afford to go too much over the indicative price because their finance provider or bank will do their own valuation on the property and they could end up with a shortfall,” Mr Satsias says.

β€œThe last thing they want to do is to get into a bidding war and end up paying more than what the property is worth or get into debt which exceeds the serviceability levels prescribed by their finance provider.”

Velocity Conveyancing Group principal Andrew Satsias

Velocity Conveyancing Group principal Andrew Satsias advises buyers not to try and go it alone. Photo: Velocity Conveyancing.

When it comes to pre-auction offers, the seller may request the buyer to obtain a certificate (s.17 in the ACT or s.66W in NSW) signed by a lawyer, which will waive their cooling-off right.

“Legislation provides for a five-day cooling-off period with only a nominal penalty for you to get some legal advice and decide whether you wish to proceed with the purchase or whether, after advice, you should pull out of the agreement,” Mr Satsias says.

“Most vendors will ask buyers to waive the cooling-off period when making a pre-auction offer in order to secure the property.

“Waiving of the cooling-off period can be done by a lawyer under the legislation, which says we have had this conversation and you fully understand that, upon exchange of your contract with the handing over of this certificate, the cooling-off period will be waived and you will have a binding and unconditional contract from the moment of exchange.”

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For a private treaty-negotiated purchase (not auction or pre-auction offer), a conveyancing lawyer doesn’t need to review a contract until a price has been negotiated.

“When a sale has been agreed upon, the seller’s solicitor will send us the completed contract to review with the buyer.

“At the same time, the buyers should obtain unconditional approval of finance and, only when they are ready, do they sign the contract and pay the deposit.”

The conveyancing lawyer will read through the entire contract and ensure all relevant documents are attached. They will flag any concerns and discuss them with the buyer.

Established in 1968, Velocity Conveyancing Group has more than 50 years of experience in the ACT, NSW and Victoria, with offices in Canberra City, Belconnen, Gungahlin, Tuggeranong, Inner South, Woden, Goulburn and soon to open in Dickson.

The Velocity Conveyancing Group website has step-by-step guides to assist buyers and sellers and offers no-obligation free quotes to buyers and sellers of property in the Canberra region.

Original Article published by Katrina Condie on Riotact.


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