Step 1: the section 32 vendor statement
Section 32 of the Sale of Land Act 1962 requires the seller to give the buyer a statement before they sign. It discloses the title and any mortgages, caveats, easements or covenants, the planning zone and overlays, rates and other outgoings, notices from authorities, building permits issued in the last seven years, owner-builder warranty insurance and a defects report where owner-builder work was done within the last six and a half years, services connected to the land, and the owners corporation certificate for an apartment or townhouse. We order the certificates and prepare the statement so it is ready before the agent lists.
Step 2: the contract of sale
We prepare the contract on the standard Law Institute of Victoria and REIV form with any special conditions your situation needs, for example if you are buying at the same time and need the settlements to line up, or if the property is sold subject to a lease. Inclusions and exclusions are listed so there is no argument on settlement day about the dishwasher or the curtains.
Step 3: offers, signing and the buyer's cooling-off period
In a private sale the buyer usually signs first, as an offer, and the contract is formed when you accept and sign. The buyer then has three clear business days to cool off; if they do, you keep $100 or 0.2 per cent of the price, whichever is more. There is no cooling-off period for a sale at auction or within three clear business days before or after a publicly advertised auction. The deposit, usually 10 per cent, is paid into the agent's or our trust account and held until settlement unless it is released early.
Step 4: early release of the deposit (section 27)
If you want the deposit before settlement, for example to fund your own purchase, we serve a section 27 statement on the buyer with details of your mortgage. The buyer has 28 days to object; if they do not, or they consent, the deposit is released to you less the agent's commission.
Step 5: discharging your mortgage
We lodge the discharge request with your lender as soon as the contract is signed, because lenders often need two to three weeks. The payout figure is confirmed before settlement and paid from the proceeds on the day.
Step 6: the ATO clearance certificate
Every seller of Australian property needs an ATO foreign resident capital gains withholding clearance certificate before settlement, whatever the price; without it the buyer must withhold 15 per cent of the price and pay it to the ATO. Apply as soon as you decide to sell, as certificates can take weeks.
Step 7: adjustments and the statement of adjustments
Council rates, water rates and owners corporation fees are adjusted so that you pay only up to the settlement date. Land tax cannot be passed on to the buyer of a residential property under $10 million, so it stays with you for the year. We prepare the statement of adjustments and agree the figures with the buyer's representative.
Step 8: the final inspection and vacant possession
The buyer may inspect in the week before settlement. The property must be in the same condition as when the contract was signed, fair wear and tear excepted, with the inclusions in place and, unless sold subject to a lease, vacant and clean on the day. Keys go to the agent.
Step 9: settlement
Settlement takes place electronically on PEXA on the date in the contract; 30, 60 and 90 days are all common. Your mortgage is discharged, the buyer's funds are received, the transfer is lodged with Land Use Victoria and the net proceeds are paid to your account, normally the same day. The agent releases the keys and accounts to you for the deposit less commission.
After settlement
We give notice of disposition to the council and water authority. If the home was your main residence the capital gains tax exemption usually applies; that is a question for your accountant, so keep the settlement statement and your purchase records for them.
What it costs
Settle Easy's professional fee for a standard residential sale in Victoria is a fixed $1,550 plus GST, agreed before we start. Certificates and government charges are passed on at cost, typically $550 to $850 for a sale. Agent's commission and your lender's discharge fee are separate. See conveyancing fees in Victoria, or get a fixed-fee quote.