Key Things to Know Before Buying a Property
What are some of the things you need to consider before buying a property?
Buying a property whether it is your first home or an investment home can be an exciting and emotional time. You have found the exact property that you have been looking for and you don’t want to miss out on it. But before you enter into a contract for the purchase of a property there are some critical things that you should do:
Obtain a copy of the Contract – before properties are listed for sale a draft contract for sale must be prepared and available to any potential purchaser. The contract for sale will contain valuable information about the property. The contract for sale is available by request from the real estate agent, so do not be afraid to ask for it.
Obtain pre-approved finance – whether you are buying your first home, a second or third home or another investment property to increase your portfolio, you should ensure that you have your finance approved before you start looking for property. Your bank or mortgage broker will be able to tell you how much you can lend based on your earnings and your current debts. You will then be in the position to know exactly what price range you should be looking in and you will avoid the disappointment of finding your perfect home only to be told that your budget will not stretch that far. It is important to remember though that any pre-approval that you obtain from the bank is always conditional on the bank’s valuation so you should never enter into a contract before you have unconditional finance approval from your bank or finance provider.
Obtain your pre-purchase investigations – before entering into a contract we also recommend that you obtain a pest and building report. The pest report will tell you whether there are any termites, termite activity, wood borers, white ants etc. that may have done substantial damage to the property which is not always visible to the untrained eye.
A building inspection will tell you about the structural integrity of the house. The building inspection will also tell you whether any costly repairs need to be carried out to the property. This can be give you room and reason to negotiate the purchase price with the vendor if you have not already entered into the contract.
In certain circumstances you may also like to consider obtaining a survey report depending on the age of the property, your plans for the property and whether any recent improvements have been carried out to the property. This report will give you information on the location of any structures in proximity to boundaries and may also give some insight into the likelihood of any council approvals for existing structures.
If you are looking at buying a strata property ie a unit, apartment or townhouse you should obtain a strata inspection report. A strata inspection report will disclose, among other things, the strata levies that are payable in respect of the property, any by-laws (rules) that are applicable to the building, the financial health of the body corporate and whether the body corporate is or has been involved in any disputes (which could include disputes about the building, defects, repairs, etc).
The above reports can be costly when compared to other fees charged by your solicitor during the conveyancing process and they can take some time. However, the cost of the reports are minimal when compared to that of the purchase price of the property. The reports can provide you with invaluable information that can save you significant funds and stress in the future and may prevent you from making a regrettable investment decision.
Obtain legal advice – As soon as you obtain a copy of the contract you should make an appointment with one of the team at Osborn Jensen Lawyers so that we can review the Contract and provide you with sound advice about the nature of the property and the special conditions contained within the contract. We can also recommend additional special conditions that you may want to negotiate with the vendor to protect your position. The scope of any additional special conditions will depend on the instructions that you provide to your solicitor which is why it is imperative to obtain this advice before entering into the contract for sale.
If you have any questions in relation to the above or you are looking at buying or selling property then please do not hesitate to contact Alison Garland.