The Mistakes That Sink Property Settlements (And How to Avoid Them)

In this episode of Property, Straight Up, host Mel Dennis sits down with Inna Segal, director of RET Conveyancing, to talk about what can go wrong when buying or selling property and how to make sure it doesn't happen to you.

Inna has over ten years of experience as a licensed conveyancer and has spent the last five as director of RET Conveyancing. She is the person who sees the mistakes before they become disasters, and in this conversation she shares exactly what those mistakes are and how to avoid them.

KEY TAKEAWAYS:

• A conveyancer is not optional. Inna explains what the role covers and why skipping it is a costly mistake.
• The Section 32 is one of the most important documents in any transaction. Inna explains what to look for and what a defective one can cost you.
• Finance timing matters more than buyers expect. Thirty days goes faster than you think, and missing the window carries real risk of default.
• Skipping a building and pest inspection is a gamble, not a shortcut.
• Section 27 lets vendors in Victoria access their deposit before settlement, and most don't know it exists.
• Tenanted properties carry a vacant possession risk that has ended deals entirely. Inna shares the cautionary tale.
• Undisclosed renovation works can come back on sellers under the seven-year disclosure rule.

CONNECT WITH INNA SEGAL AT RET CONVEYANCING
https://www.retconveyancing.com.au/

ABOUT DOMAIN & CO
 Buying or selling a home is one of the biggest decisions of your life. Often the biggest financial decision you'll ever make. Bigger than anything else you'll sign your name to.

And the people meant to help you make it have started to look a lot like the people you didn't trust in the first place.

The polished ones in the sharp suits. The corporate machines who never learn your name. Or worst of all. No one. Just you and a portal and a hunch.

We've spent thirty years on both sides of property. The buy and the sell. The boom and the bust. The houses that grew. The ones that didn't. The agents you'd want in your corner. The ones you wouldn't.

We've walked the same families through five, six transactions across decades. First home. Family home. Forever home. The next chapter after that.

So we don't pitch. We don't perform. We don't take work we don't believe in. We just tell you what we'd do, if it were us in your position.

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Transcript

SPEAKER_00 0:00

One thing I've learned after nearly 30 years in property is that behind every property transaction there's a story, a big decision, and often a lot more emotion and complexity than people expect. This podcast is all about giving you access to the people, insights, and strategies behind smart property decisions so you can make better moves, whether you're buying your first home, investing, selling, downsizing, or planning your next step. Today we're diving into something that doesn't get talked about enough, and that's what can actually go wrong when buying or selling property. Because while it can be an exciting process, there's also a lot of moving parts, and getting just one of them wrong can have serious consequences. I'm joined today by Inna Segal from Rhett Conveyancing. Hi, Mel, thanks for having me. Inna is an experienced conveyancer who works closely with buyers and sellers to manage the legal side of property transactions and make sure everything runs smoothly from contract to settlement. What I really value about Inna's work is that she's often the one who sees where things can go wrong and helps prevent those issues before they become costly problems. Inna, thank you so much for joining me. You're welcome. Happy to be here. Why don't we start with for anyone listening who isn't familiar, what does a conveyancer do and why do you need one? Well, a conveyancer is a very important partner in your property journey.

SPEAKER_01 1:21

You can't do without it, really, can you? No, no, you can't, not these days, not with uh all the electronic uh settlement requirements and all the changes in the industry. So, no, you definitely need one. And uh good conveyance is there to make the journey easy and straightforward, but also is there to add some value at the commencement of the deal. So to review the contract, provide advice on any risky aspects uh of the contract, and guide the purchaser or seller on the property journey. So we're we're there basically to manage the legal process of buying and selling property. And tell us a bit about your career as a conveyancer. Oh, well, it's uh been over 10 years now where I've been a licensed conveyancer. The last five of that, I've been uh the the director at RET conveyancing. Um so the business has grown substantially and changed as well. There's a couple of very good uh staff members that work with me. One is a licensed conveyance, and others were on Hawaii.

SPEAKER_00 2:23

We're pretty experienced. And you would have seen some changes over the time too, from the days where you know you had to turn up to the bank to do the settlements with all the checks and things now. It's all all online, as you mentioned. For sure.

SPEAKER_01 2:34

The the industry's changed dramatically. The last couple of years, uh all the titles have become electronic, the process has been streamlined, have gone online, there's no more exchanges of checks, there's no more pending settlements and gaps in in registration as well and blow through, flow from uh paper settlements. But definitely there's been some extensive changes and to legislation as well. Absolutely.

SPEAKER_00 3:01

Absolutely. You know, let's touch on the buyer side of things. So what should a buyer be doing before they even look at making an offer?

SPEAKER_01 3:08

Things can go wrong right at the beginning. So a savvy buyer firstly would have their team in order. They would have conveyancer, an agent, a uh broker, so they would have all their ducks in a row, basically, before they even start looking at property. But from a conveyancing point of view, uh step one is to have their contract, section thirty-two, reviewed by a conveyancer, just to get an an understanding of how the property is structured from a legal perspective, but also if there are any issues in the documentation that probably not obvious when a buyer goes and does their inspection.

SPEAKER_00 3:48

The concept of a section 32. Someone who hasn't bought a property before might not understand what a section 32 actually is. Um can you explain a little bit about that?

SPEAKER_01 3:57

Yeah, section 32 is basically disclosure about a particular property. There are certain legal requirements of what a section 32 must contain, but essentially the title information, all the property outgoings, council, border, body, corporate information, I just corporation. So and building documentation as well. So it's a very important document for a buyer when they are making a a decision about whether they're going to proceed to purchase this property at all, because there might be some deal breakers within the documents, are just not obvious to the naked eye. What should they be looking for in a section 32? Well, firstly it has to be up to date.

SPEAKER_00 4:38

Usually within three to six months is the oldest. And you can see that from the certificates that are in there. If it's a part of an owner's corporation, that will be dated. The last owner's corporation minutes, for example. Correct.

SPEAKER_01 4:50

So all of that information uh is contained in the certificates, the dates that these were issued. When it comes to an owner's corporation, it's very important that that is current because there could have been changes in the section 32 was prepared. So a buyer would definitely need to request uh an update of section 32 if the one that they've been provided is too old.

SPEAKER_00 5:13

To have a look at the minutes from the last owners corporation and and to see that was done in May. So there's another one coming up. So we either need to update those or maybe they're just about to have that meeting.

SPEAKER_01 5:23

Exactly. Because there's the risk that there's there are special levies that are upcoming or there've been changes to the quarterly fees that are payable. Talking about major works. Major works, definitely. An owners corporation certificate is arguably the most important or human when you're purchasing a strata property. So it is a good idea to have that.

SPEAKER_00 5:42

Yeah. And how often do you see buyers get caught out by not having finance properly in place?

SPEAKER_01 5:47

Does happen a lot, especially with timing. So uh often well, what can happen is that a buying goes and signs up for a 30-day settlement without having even an unconditional approval in place. So I would say it's pretty important to make sure that the dates work. If you're you don't have unconditional approval or even conditional approval when you sign the contract, you'll need to have a long settlement just to give yourself enough time to get organized.

SPEAKER_00 6:16

Absolutely. Sticky if you haven't um signed that contract subject to obviously a finance clause. That's right, because the 30 days go very quickly and uh banks can move pretty slowly. Yes, exactly. And what do you think are the risks that buyers are taking if they skip a building and pest inspection?

SPEAKER_01 6:32

Well that removes a key uh layer of protection. They're basically buying a property they don't really know what they're getting. They can't see through the walls. A lot of people don't have a good understanding of what constitutes the defect in a property. What can happen is that the walls have been painted over and there'll potentially some issues with mould or moisture or whatnot. So a qualified building inspector would identify those issues and potentially help the buyer avoid big problems and big costs, unexpected costs going forward.

SPEAKER_00 7:07

Absolutely. How important is a settlement period and what can go wrong if that's not right? Well, look, if it's too short, there's the risk of default.

SPEAKER_01 7:16

As I said, about the finance non being in place, that is often the issue. If it's too short, we can't settle on the day you're supposed to.

SPEAKER_00 7:25

And what what happens when you can't settle on the day that you're supposed to? Depends whose fault it is. So if So you're talking about the from the buyer perspective, if a buyer can't settle because they haven't quite got their finance right or whatever other reason it could be. Things can get pretty ugly.

SPEAKER_01 7:38

Uh there's potential of default. So they would get served with a notice of default and pay penalties and costs and they're even at the risk of losing their deposit if they can't settle within a four 14-day default period. It's a very pleasant exercise and can be very costly for a buyer.

SPEAKER_00 7:58

So if you're not sure a longer settlement period is something that that could help you get all your ducks in a row if you haven't quite got it.

SPEAKER_01 8:05

Long but not too long. If it's too long, you're exposing yourself to changing circumstances as well. If your salary changes, it might affect your your loan. Borrowing capacity. But also from the vendor's perspective, things can go wrong as well. So you just sort of need to align those with expectations. Yeah. 30, 60 or 90 days is standard. I probably wouldn't recommend much longer.

SPEAKER_00 8:32

Yeah. So as a buyer's agent, how do you work with clients to help get the best outcome?

SPEAKER_01 8:38

Look, the buyer's a agent focuses on securing and negotiating, while conveyances focus on the legal structure and risk. So it's really a teamwork situation. You need to have a good team and a good relationship between your team members to be able to make sure that you're ready and s settling on time. But yes, conveyances and buyer's agent have to come together as a team for the client to get the best outcome.

SPEAKER_00 9:03

And that's a big thing that's come out from a lot of the the podcast episodes is people having the right team about them to get the best outcome. Yes. Which has been really good. The ability to work together and get the best outcome for the client. It's great. If you could give us three key tips for a buyer to avoid problems, what would they be?

SPEAKER_01 9:24

Well, firstly, get the contract reviewed because that will save you a lot of headaches down the road. Secondly, don't rely on standard clauses in the contract. Make sure you clarify. For example, if you're expecting a particular item to come with the property, have it listed. For example, if there's a barbecue and your your expectation is it's coming with the property, make sure it's written in in the time of offer. And uh thirdly, ensure that your finance is in place, because that is second most common reason not to settle.

SPEAKER_00 10:00

Ian mentioned it's quite costly not to settle when you've signed a contract. So do not go there. I guess moving on from a vendor or sellers side of the equation. What should the sellers be doing to prepare before they go to market from a contract point of view?

SPEAKER_01 10:16

They should prepare the section thirty-two early and accurately. So it's important to provide the right information to your conveyancer because we we rely on getting accurate information from the vendor when we're preparing. Yes, all the searches and certificates are applied for, but if uh the vendor does not disclose, then often it does not go into the section thirty-two. And the effect of that is a defective section thirty-two and potentially a non-binding sale.

SPEAKER_00 10:47

So you see issues with missing or incorrect information in a section thirty-two sometimes. What can that lead to?

SPEAKER_01 10:53

Well it can uh lead to a avoid a void contract, a deal falling apart. If there are certain documents that are a complete deal breaker, and if they're not within contained within the section thirty-two, then the buyer can withdraw very easily and just walk away and get their deposit back.

SPEAKER_00 11:11

And that can be quite devastating, and particularly if you're relying on that property to settle to get your next property that you've already bought. Exactly right. Can have a big butterfly effect. What should vendors know about discharging their mortgage and where do you find you know pitfalls in that process?

SPEAKER_01 11:28

Well, firstly you need to know your lending. You have to know what exactly is securing a particular loan. If it's more than the one property, you should start talking to your bank early because it may be a partial discharge and then they need to do evaluation, which takes time. You need to speak to your bank when when you're starting to consider to sell your property, just to understand that you can just sign your discharge form and have that property and it's straightforward.

SPEAKER_00 11:56

Yeah, because if it is is complex, as you mentioned, like some people have multiple properties all cross collateral in their mortgages, and so you can't just take one out to settle. Exactly.

SPEAKER_01 12:08

There's a partial discharge, and then you may find that you actually are not getting enough from your sale potentially to cover that because the the bank will expect you to pay down the loan and uh you don't want to be in a position where you're trying to desperately find some money for settlement. So definitely start that process early and speak to your bank, to your broker to make sure you're you're ready.

SPEAKER_00 12:33

Tell us about uh section twenty-seven. So when a person sells a property, a deposit is kept ten percent usually f with the selling agent. That can be released to the vendor with a section twenty-seven.

unknown 12:47

Correct.

SPEAKER_00 12:47

Which not many people know about.

SPEAKER_01 12:49

It's actually Victoria's the only state where that's allowed. Um there is a process under section twenty-seven to have the deposit released, but it's not as easy as it sounds. And this is also something to get started early if you are reliant on the deposit funds to to fund a purchase or and sometimes it's better just sitting in the owner's bank account than the than the agent's accounting interest as well. But it is all part of that discharge of mortgage process. The bank needs to issue a letter to show the details of your mortgage. It's not an automatic right to have your deposit released and the buyer does have 28 days to consider whether they will allow a signing or whether they have a valid objection. Usually a valid objection is when you owe more than 80% on your mortgage. That that is considered a valid objection and the deposit cannot be released. So have that conversation with your conveyance just to uh understand whether you can expect an early release of deposit.

SPEAKER_00 13:51

And you should be having that conversation with them as you start to organize the contracts to be prepared.

SPEAKER_01 13:56

If you're reliant on on that deposit and get the process started early, make sure you'll have your bank letter ready to go. And then as soon as the contract's signed, the section 27 can be served on the purchaser.

SPEAKER_00 14:07

Right. And the purchaser can sign section 27, so then they can even get it earlier than the 30 days that they have to wait if they don't sign it. Correct. As soon as the purchaser signs the section 27, the deposit can be released. Great. That's a that's probably a help for many people. Are there any common contract issues that sellers should be aware of? I guess that we haven't mentioned already.

SPEAKER_01 14:28

Something like building works when you go and do a renovation to kitchen and bathroom. A lot of people are unaware that there are legal requirements for disclosure of that when you haven't engaged a registered builder, when you've had a tradesman or did it yourself or engaged your your own trades, essentially. So that once you start the selling process, just have a think about what works have been done in the last seven years, because there are requirements for the purposes of section 32. And if you don't disclose those, then that is also an out potential end way the buyer can end the contract.

SPEAKER_00 15:06

What would be your three top tips for sellers to make the process smoother?

SPEAKER_01 15:10

I would say prioritize certainty over price. So the highest offer is not always the best. I would say consider and have a conversation with your agent about what offer to accept. So just have a consideration about risk as well. Now about documentation, ensure that that is complete and accurate and bulletproof, as I like to say. And uh plan your settlement timing, make sure it works, whether the property is tenanted, whether you're you need to vacate yourself, make sure the timing is suitable.

SPEAKER_00 15:47

That's good advice, especially with um an investment property and having to give 90 days notice to a tenant to vacate now and so forth.

SPEAKER_01 15:55

Yes, yes, that is um definitely a a situation that we've had where the tenant wasn't in a position to vacate and the whole deal fell through because the vendor wasn't able to give vacant possession.

SPEAKER_00 16:07

Yeah, because even if you give that 90 days they don't move, they don't move. That's right, it goes to VCAD. Yeah, it's a tricky situation. Tell us what's one of the worst situations you've seen and the the scenario around that.

SPEAKER_01 16:20

Well, the one that I mentioned was about the tenant not vacating. It's quite severe because the whole deal fell through, the contract was at an end, the buyer walked away and the vendor was rather upset that that they weren't able to settle on this property. Um so that could have been easily avoided if the the terms of the sale were clarified and if the vendor wasn't sure or wasn't in a position to to be certain that the tenant will vacate.

SPEAKER_00 16:53

And you can never really be certain what someone else is going to do, no matter how you feel about it. Um even if it's family, if they can't move, they can't move. Exactly right.

SPEAKER_01 17:02

So if the tenant if there is someone living there under a lease, just mark the box that says subject to a lease.

SPEAKER_00 17:09

And then there are no uh leeways with it. A lot of the times now we're recommending um investors give a notice to vacate and sell the property to make sure it's with vacant possession. Don't put the property on the market until it is vacant possession. And it gives you a lot more options around, you know, being able to prepare it and display it and have however many walkthroughs you need to to get that best price at the end of the day. But you then have the certainty of being able to say yes, it is vacant possession. That's right.

SPEAKER_01 17:37

So it's definitely a lot of losses to be uh to selling a property making present at much at all.

SPEAKER_00 17:44

Because people are very visual. They certainly are. When should someone involve a conveyancer in the process?

SPEAKER_01 17:51

Well, as early as you can, really. Uh just to make sure that the documentation is not rushed, that you have the right advice and that you've worked through any issues if there are built-in documentation that need to be prepared or inspections that need to happen. Give yourself as much time as possible before, not pull up your conveyance uh on a Wednesday and say my open is on a Saturday, can I have the section thirty-two? Yeah. Because although it it might be produced, but the quality is very important. Yeah, when you put everyone under stress it it doesn't always work out as well as it could. Your documentation is part of your campaign. So people spend a lot of money on staging and making the property, you know, look nice and online advertising. Section thirty-two is as important, if not more.

SPEAKER_00 18:44

Ideally you've got that at your first open because people will start uh asking for it and you cannot sell the property without it. Exactly right. Absolutely. So you've offered something I think is really valuable for our listeners, a free contract review, and we've also got a checklist for buyers and sellers. Can you tell us a little bit about that?

SPEAKER_01 19:02

Sure. Look, good checklist is always handy. So it just gives you a bit of a framework of what you need to do and uh what to have a think about, especially if you're not an experienced property buyer or seller. It's really handy to have that. And uh the Free Section 32 review, happy to provide that, gives an opportunity to our clients to not only get the review but also get a feel of the kind of information, the kind of service they get from RET. So definitely um harm that can be emailed through. Yeah.

SPEAKER_00 19:33

Just um if you fill in the link that's in the show notes, that will give us your details and the service that you're after will send you the checklist and get you in touch with Inner. So that would be great. So in closing inner, if someone is about to buy or sell and wants to avoid any kind of issues, what's the one thing that they should do before they commit to anything?

SPEAKER_01 19:51

Well, they should build a a strong support team early on, um, conveyance a broker agent so you get the right advice before you sign on the dotted line. That would save you a lot of headaches and a lot of uh problems and potentially a lot of money.

SPEAKER_00 20:07

Absolutely. Ina, thank you. It's been incredibly helpful for such an important conversation for anyone buying or selling having you in today. If anyone would like to take advantage of the free contract review or download the checklist, we'll include it in the link in the show notes as we mentioned. And if you're navigating a property decision and want to make sure you've got the right team around you, I'm always here to help you guide through that as well. Thanks for listening to the Melbourne Property Brief. And don't forget to subscribe so you don't miss out on the next episode.