We signed a contract to purchase a Victorian property, buildt…

I would strongly suggest you get a properly legally qualified property lawyer in the current circumstances. Conveyancers are sometimes legally qualified and sometimes they are not. Non-legally qualified conveyancers are not allowed to give any legal advice to you. Having said that, I can't see a way out for you; the building insurance guarantee for an owner/builder will not now give you cover, if the building was completed 15 years ago. The vendor also does not have to tell you about termites - you have the option of obtaining an inspection report on this before signing. The reason I asked about a finance clause is that you might have been able to avoid the contract if your lender didn't approve a loan. If you had this clause and told the, say, bank about these potential problems, then they might have just said no loan, and you could then have terminated the contract. I again suggest you have a solicitor take over - I would not be comfortable with a conveyancer recommend by the vendor's agent. I am a bit too far away from the action and cannot see the documents, so it would be best to see a solicitor to see this through. I could recommend someone if you want me too (but I'd would need to know what area you are in).

I think this probably answers your questions, but if there is anything else please come back to me, I am happy to address any further concerns. I should have added that you might consider it a better option to terminate the contract and forfeit the deposit (I don't know if the full deposit was $10,000 - 2% only at this stage??). This may be a better option in all the circumstances, but this is a decision only you can make. You would definitely have to see a solicitor about this because terminating a contract of sale has to be carried out with the utmost care.