Hi,
We are buying a established property in Victoria and have just received a Section 27 statement from our vendors requesting early release of the deposit. We haven't bought property in Australia before, our solicitor has said he is satisfied the vendors have enough equity in the house and we should sign to release the deposit.
I am wary however, and I did a quick Google search to find out more but am confused. I am also concerned that the existing mortgage is high (almost the sale price) which means the equity in the property is significantly less than the deposit amount. If they were to use the deposit for purchasing another property then there would not be enough money at settlement to cover the mortgage. Can we know that they're not going to spend the money on something else or why they need the funds early?
Within the section 27 there is a statement that the mortgage allows for further advances and has an amount written next to it - does this mean this is how much the vendor could potentially draw down from the mortgage in addition to what they already owe?
What are the risks of releasing the deposit early. If we say no and don't sign the section 27, does this prevent the deposit funds being released until settlement or do they just get released in 28 days anyway after the section 27 is served.
I am planning to speak to our solicitor tomorrow to find out more, but wanted to get some other opinions as he has already said in his letter that he thinks we should release it and I'm not sure I'm comfortable with that without being fully informed.Apologies if this sounds a bit garbled - feeling a bit confused so anyone with knowledge of this area in victoria would be greatly appreciated!