Section 32 Vendors Statement – what to look for as a Buyer.
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A Section 32 vendors statement is a document required in Victoria, provided by a seller of real estate to an intending buyer.
The name comes from Section 32 in the Sale of Land Act, which requires a seller to provide certain information to a buyer before a contract of sale can be signed.
A Section 32 Vendor’s Statement has to be prepared by, or otherwise on behalf of the vendor, and presented to any person who wants to buy the vendor’s property. Before the contract of sale is signed.
The Section 32 Vendor’s Statement is part of the contract. By law, Section 32 must by signed only by the vendor, but many Real Estate Agents ask a buyer to sign it also, to prove it was included before the exchange.
What’s in a Section 32 Vendor’s Statement?
• The Section 32 Statement gives details of:
• Improvements.
• Undischarged mortgages.
• Planning controls.
• Rates, taxes and other outgoings.
• Notices from statutory authorities affecting the land.
• Easements, covenants or other restrictions affecting the land.
• Warnings about planning controls, adjacent commercial agricultural production.
• Access to the land.
• Utility and service connections.
• The body corporate if the land is subdivided.
• Insurance.
If the land has a residence then the Section 32 Vendor’s Statement has to include information regarding permits for building, and warranties. The Section 32 Vendor’s Statement is also required to include a copy of the Certificate of Title, which proves ownership and qualifies the vendor to sell it.
If an offer is accepted the contracts will be signed by both the parties and exchanged. There are some Real Estate Agents who prefer the offer is made by the actual signing of the contract with the buyer’s particulars and the price filled in, with a cheque attached. This is a strong approach because the offer is valid for immediate exchange. But this ‘do or die’ tactic is designed to put a stopper on any further negotiating and can leave a bit of a bad taste in your mouth. We recommend that you only put your signature down when negotiations have reached a point where you agree with all the terms.
The period for cooling-off is 3 clear days of business. A penalty for withdrawing applies which is 0.2% of the purchase price, or $100, whichever is greater. There is no provision for a cooling-off period on the day a home is sold at auction, or for 3 days before or after. Also, there’s no cooling-off period if the same parties have entered into a contract before, for the same property, in similar circumstances.
Subject to Finance Clause
There is a clause in the standard form of the sale contract which allows for the sale to proceed, subject to finance, if the parties are in agreement. The buyer has to provide the name of the proposed lender , the amount, and the date approval is expected. If the buyer can’t secure the finance by the date that is stated, they can cancel the contract and the deposit must be fully returned.
This clause is commonly used, but it can be problematical from the seller’s point of view because all the marketing can stop while they wait to determine whether the sale will proceed. The buyer is also disadvantaged to a degree – there may be no-one else who is interested in the property, but the buyer will not know that.
It would seem to be better practice for both parties if they delayed signing an agreement until the finance is approved, and then both enter an unconditional contract.
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