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FAQs

Buying a property can be daunting if you are not sure what to expect. Our guide to some of the most commonly asked questions will help you prepare for this exciting experience.

What is a contract of sale?

Contract of sale is a document your solicitor or conveyancer will prepare before you commence your marketing campaign. This includes a ‘Vendor Statement’, title, details of ownership, rates, outgoings and any owner’s corporation information and minutes are contained. These documents are then signed and exchanged between the vendor and buyer after a sale. They include all the relevant information about the property, both parties, the agents and solicitors involved in the transaction, the price, deposit, amount owing on settlement and any conditions of sale. Buyers can request a COS to review before putting in a bid or offer.
What does settlement mean?

Settlement is the agreed date when the buyer must pay the balance of the purchase price, receive the title and take possession of the property. The vendor or agent will be able to share the preferred settlement period however this period may sometimes be negotiated.
Do I need a deposit?

Yes, you will need a deposit. A standard real estate transaction will require 10%, however you will need to confirm this with your bank and the real estate agent.
What else will I need to pay?
Apart from the sale price, there are other costs associated with buying property. These include:
- Stamp duty: In Victoria, this is calculated on the price or open market value of the property (whichever is greater), at a sliding scale from 1.4% to 5.5%.
- Legal fees for solicitors/ conveyancers
- Loan application fees
- Building and pest inspections (if you choose to have one)
- Valuation fees
- The Fire Services Property Levy (if your property is located in an at-risk area)
- Growth Areas Infrastructure Contribution, depending on where you live.
- Registration of title
What is an EOI? 

During an Expression of Interest (EOI) sale, buyers are invited to submit their best offer to purchase your property. This may be done on or before a nominated closing date and time. The offer must be submitted on a Contract of Sale, which includes terms such as price, deposit, and settlement date. The agent then gives you all the offers so you can make your choice. Offers cannot be shown to other prospective buyers. In some cases, if there are multiple parties and multiple offers, an EOI campaign may conclude by conducting a Private Auction under Exclusive Sale conditions, in which case all bids are made in absolute transparency and acknowledged by the auctioneer.
What is a Private Sale?

A Private Sale is when your property is advertised and prospective buyers are invited to make offers. There is no time restrictions submitting offers. Your agent will then negotiate individually with buyers. These negotiations may include the terms of sale, such as settlement date and additional clauses like the sale being subject to inspection or bank finance. You can decide if you would like to accept the offer or not. Once an agreement is reached, contracts of sale are exchanged and the buyer pays the deposit, with the balance due on the agreed settlement date. There is a three-day cooling-off period during which either party can change their mind.  
What is an auction?

Auctions are sales conducted at a pre-arranged date, time and place, run by a licensed real estate agent. There is an advertising campaign in the weeks leading up to the event. When the auction begins, prospective buyers make competitive bids against each other until only one bidder remains. By bidding, prospective buyers are agreeing to the terms of contract, which they view before the auction. It’s also important to note there is no cooling-off period with auctions. Contracts will be signed and exchanged immediately after the auction and a 10% deposit paid .
What are vendor and dummy bids?

A vendor bid is a bid made by the auctioneer on behalf of the vendor to help achieve the reserve price. A dummy bid is a false bid made by a non-genuine buyer. Dummy bids are illegal and can result in significant penalties for the vendor, the dummy bidder and in some cases the agent.
What is the reserve price?

This is the pre-set, minimum price the vendor is willing to accept for the property. If bids pass this price, then the house is deemed to be ‘on the market’ and the highest or winning bid is binding.
Can I put in an offer before auction?

Sometimes a vendor may accept an offer before the property goes to auction. You will need to complete the offer on a contract of sale, accompanied by a 10% deposit. The agent will be able to assist with this process. If your offer is accepted within 3 business of the auction (before and after) the offer presented must be unconditional (not subject to cooling off, finance or a building inspection). If your offer is accepted outside of these terms, it may be subject to cooling off. .
What does ‘passed in’ mean?

If the bidding doesn’t reach your reserve price, or a price you are happy with, then the house is passed in and negation between the highest bidder and agent may take place. If the negotiations fail to reach a result then the sale method will revert to a Private Sale.
What happens if my bid is successful?

If you win the auction and your bid is above reserve, you have bought the property. Contracts will be signed and exchanged immediately after the auction, and you will need to pay the 10% deposit.

At Jellis Craig, our experts are always available to answer any other questions you may have to ensure your buying experience is seamless, easy and enjoyable. We look forward to helping you secure your next property.

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