The Law Handbook 2024

Chapter 6.2: Buying or selling a house 545 auditing of business records. Note that conveyancers are limited in the types of matters they can act in. Before a conveyancer is granted a conveyancing licence, the law requires them to meet various requirements, including having a certain number of years of supervised conveyancing experience, and showing a certain standard of competency. You can check a conveyancer’s licence via the public register of the Business Licensing Authority ( BLA ) (www.consumer.vic.gov.au/bla) . Solicitors Solicitors undertake conveyancing and can also give legal advice about the process of transferring ownership of a property from a vendor to a buyer, including ancillary issues such as loan advice, adverse possession or estate planning. Buyers can obtain legal advice about the contract of sale, the manner of ownership, stamp duty, tax implications and other legal aspects of the settlement process from a solicitor. Vendors can engage a solicitor to prepare the contract of sale and to guide them through the legal process of selling their property. Solicitors are also required by law to have profess­ ional indemnity insurance to protect their clients against professional negligence. This insurance is managed by the Legal Practitioners’ Liability Committee ( LPLC ). Solicitors are also regulated by the Victorian Legal Services Board ( VLSB ) and Commissioner. For conveyancing services, most solicitors charge the same fixed fee as good conveyancers: • for a house : approximately $1300 plus dis­ bursements of around $250–$350; • for an apartment with one owners corporation: approximately $1300 plus disbursements of around $450, depending on what certificates need to be ordered. The best way to choose a good conveyancer or conveyancing solicitor is to check the online reviews and to ask for recommendations. Finding the money to purchase a house Introduction Most people buy a house with money from: • personal savings; • proceeds from the sale of a house; • a mortgage; • vendor finance; • a loan or gift from a family member; and/or • government assistance. Personal savings A sensible place to keep your savings is with the financial institution that you intend to apply to for a home loan. Proceeds from a house sale Selling first and buying second is more sensible: your financial position is clearer, and you can take as long as you like to find a new home, even if you have to rent in the meantime. The proceeds of the sale should be kept in an accessible, interest-earning investment in the buy–sell interim. Alternatively, you can have the sale and purchase settlements occur simultaneously. In this case, the sale proceeds can be used immediately for the purchase settlement. However, if the sale settlement is delayed, the purchase settlement will also be delayed. If you buy before you sell, or the sale and purchase settlement dates are close to each other (i.e. within a month of each other), it is a good idea for the buyer to investigate the availability and terms of bridging finance to ensure they have funds to settle the purchase. Borrowing money Overview of home loans When comparing loans, obtain information about: • the cost of establishing the loan, including the valuation fee, the lender’s solicitor’s fee, mortgage establishment fee, and any up-front charges; • when and how repayments are to be made; • any administration charges, including the fee for debiting an account or sending a periodic bill; • the rate of interest; • whether the interest rate is fixed, variable or mixed and, if variable, the past practice and future intentions of the lender for varying the rate; • whether interest payments are in advance or in arrears; • whether the loan can be fully repaid at any time and the penalty for early repayment;