The Law Handbook 2024

552 Section 6: Houses, communities and the road • if the fee is calculated on a percentage basis, a statement of the fee expressed as a percentage and dollar amount that would be payable on the reserve price or other relevant amount. The fee can be based on a service or series of services, such as holding open for inspections, negotiating the contract and collecting the deposit, or it can be a commission on the price. Vendors should ask for a detailed price list from the agent before signing the estate agent’s authority. Underquoting Victoria has enacted underquoting laws that apply to residential properties. Agents must prepare a statement of information for each residential property they are engaged to sell. The statement of information must include an indicative selling price for the property, details of the three most comparable properties and the suburb’s median house or unit price. Complaints about underquoting are dealt with by Consumer Affairs Victoria (www.consumer.vic.gov.au ). Advice to vendors Estate agents Shop around for an agent. You should consider the costs, and the agent’s competence and experience before making your choice. It is also recommended that you conduct thorough negotiations before appointing an agent. Negotiations should cover the type of appointment, commission and advertising costs. As a vendor, do not: • sign a contract of sale that contains terms (including a price) that you are unhappy with; ask the agent to renegotiate with the buyer; • agree to sell the property to the agent, or to anyone employed by the agent, or to a company associated with the agent without first seeking advice about section 55 of the Estate Agents Act 1980 (Vic). These contracts may involve the buyer in a conflict of interest. You should consider raising your price by the amount of commission or get the agent to forego commission to ensure that the agent is not getting an artificial discount not available to any other buyers; • sign a contract of sale by which your property is sold for a price less than the value of the loans secured on the property (including overdrafts that are indirectly secured) unless you consult your lender and your solicitor or financial adviser first. Ultimately, selling the property is your decision as the vendor. You must determine whether an offer is acceptable. An agent must pass on all offers to you. If the offer is above the sale price specified in the agent’s appointment and you refuse it, you may be liable to pay the agent’s fee. Advice to buyers Additional expenses The expenses of conveyancing, adjustments of outgoings on the property (e.g. council rates and water rates) at settlement, the fee for using an electronic conveyancing platform, stamp duty, the mortgage lodgment fee, registration fees, insurance and other charges can add around six per cent (or more) to the purchase price of a property. Note that every buyer will fare differently due to the duties, insurance and concessions that apply. Pre-purchase contract review Before you make an offer to buy a property, send your conveyancer or conveyancing solicitor the contract of sale to review. They will recommend which special conditions to strike out, which conditions to add, and what to do further diligence on in light of what has been disclosed in the vendor’s statement. It is important to get the contract reviewed before you make an offer, as once you have signed the contract, you cannot amend it unless the vendor agrees. Most reputable conveyancers and solicitors charge a fee to review a contract. It is important to get a written review rather than a verbal review, so you have a record of what advice was given. Signing contracts As a buyer, you should not sign a contract of sale until: • your conveyancer or solicitor has reviewed the contract of sale and the vendor’s statement; • your lender informs you in writing that finance is preapproved (unless you include a finance clause, as discussed above); • you have checked that the boundaries of the land correlate with the title measurements (which are on the registered plan in the vendor’s statement)