Buying a property is commonly one of the most significant financial transactions in a person’s life, yet many people undertake this without any legal advice.
The purchasing of a home can be a complicated and often stressful process. Things can go wrong for a purchaser and, without prior advice, problems can arise. While engaging with a lawyer or conveyancer is not a legal requirement, potential home buyers should strongly consider seeking advice prior to purchasing a property.
Lawyers are well versed in transacting property of all kinds. Transacting real property involves contractual obligations, the transfer of title, discharge of mortgages, review of searches and other legal aspects.
The numerous documents in property transactions include a Contract and its small print conditions and the vendor’s often lengthy Form 1 Vendor Statement. The Form 1 comprises important details about the property including the purchaser’s cooling off rights, which can influence a purchaser’s decision to buy. A Form 1 requires thorough examination and a purchaser needs to understand it fully, especially before any cooling off rights expire.
The contract is typically prepared by the vendor’s real estate agent (or their own lawyer or conveyancer) and contains specific details governing the terms of sale. It may also include special conditions or considerations of complexities, such as covenants and easements. The detailed terms of the Contract must be read and understood, and they may differ depending on the type of transaction. A lawyer acting for a purchaser can ensure there are no unusual or unfair terms and that the terms suit the type of transaction, avoiding delays and complications in the future.
Lawyers can also help significantly with the negotiations to purchase. Negotiations are more difficult than people tend to believe. Lawyers are able to assess the transaction objectively with experience, without any emotion to which we are all prone, especially with such an important investment. A lawyer will consider the nature of the property and any special circumstances or peculiarities with the transaction, and provide advice on whether and how you should negotiate. Lawyers can engage in these negotiations on a purchaser’s behalf, or simply provide you with the advice.
Curiously in South Australia, purchasers (and vendors) seldom seek upfront advice on transacting property and before signing a contract, instead often rely on the sales agent whose motivation, unsurprisingly, is to have both parties sign a contract as quickly as possible. This is a curious scenario when compared to the eastern states, whereby it is common practice to obtain such legal advice. Whilst both vendors and purchasers would both seek advice, it is more important for a purchaser given that the sales agent acts in the vendor’s interest.
Typically the property you buy will become the most expensive asset you own. Based on current median house prices in Adelaide of $650,047 (as of 31 July 2022), stamp duty and registration fees alone attract a cost of $35,476. Purchasers will usually pay these statutory costs without question. Considering the usually large investment and seriousness of the transaction, against the risk, the decision to seek advice should be obvious.
To ensure an accurate and smooth process from the signing of contract through to settlement, obtaining upfront advice by an expert within the industry will provide a purchaser certainty, clarity and peace of mind. Lawyers are available to assist via the Law Society’s Referral Service on (08) 8229 0200. Please note that the above does not constitute legal advice and should not be relied upon as such.
JUSTIN STEWART-RATTRAY, PRESIDENT, LAW SOCIETY OF SA