22 January 2016

What to ask before buying

Buying a property is a major decision, money invested in obtaining the right expert advice may save you many thousands of dollars later.


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As a serious buyer, it is important to know that you are dealing with a serious seller, and not just one who is testing the market.

Have a look at what sales method the seller has chosen. Some, such as auctions and tenders require an investment on the part of the seller - itself an indicator of the sellers motivation.Secondly, look to see if the seller has invested in marketing. Again, it is a good indication of a motivated seller if there has been an upfront investment of a few thousand dollars.

'Nothing is more dispiriting than emotionally bonding with a property, investing time and money due diligence, building inspections, valuers and lawyers simply to find the seller has a ridiculous price expectation.'

It is a legal requirement that we disclose any known or suspected defects to potential purchasers. Ask the agent whether they are aware of any ‘defects’ with the property. These may include, but certainly are not limited to weather tightness issues, defects with the title (particularly important with cross leases), defective chattel, presence of asbestos, un-permitted works, non issue of code compliance certificates and much more. Be sure to make diary notes of the answers in case the information proves to be questionable at a later date.

 

 

Ask whether anyone has had a building report done. If so, does that buyer continue to have interest. If not, what was in the report to deter them. It is also important to ask the agent if they are aware of any plans for future development in the area which may impact upon the property. This information is also available on the council website.

‘We always find it intriguing that many potential buyers do not obtain expert advice as they don’t want to find anything wrong with the property they have fallen in love with. Such a casual approach may prove to be extremely costly at a later date’

Understanding the offer process is also crucial. What you need to be aware of is that unless the marketing states a specific process i.e.with auctions marketed as ‘will not be sold prior’ vendors may choose how they handle any offers. This may include requesting the agent to notify all interested parties that an offer has been presented and requesting whether any other party wishes to write an offer. A vendor may also choose to bring an auction or other advertised sale date forward or simply accept an offer without reference to other buyers. Not all companies will contact all interested parties if an offer is presented so ask what the company policy is around offers and the pre-auction process.

Our advice to all interested buyers is to seek what advice you need as expediently as possible so that you are prepared should another offer be presented. Similarly, ensure all draft contracts, titles, cross leases, LIMs or other documents are checked by your lawyer before signing. If a property is marketed with some form of set date of sale, don’t assume that it will continue to remain on the market until that date - it may well be sold prior unless marketed otherwise.

July 2018 Update

From 1 July 2018, lawyers and conveyancers are required to verify the identity of their clients in accordance with anti-money laundering legislation. If your lawyer cannot verify your identity in line with the legislation, they will not be able to act for you. If your lawyer cannot act for you, you may not be able to satisfy the conditions of your property purchase and will not be able to settle your property purchase or sale. For more information about identity verification please read this flyer here.

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