Top three legal tips for buying property
It’s easy to get swept up in emotions when you think you’ve found your forever home, especially when you’re a first home buyer or you’ve been searching for ages.
Our team has reviewed tens of thousands of contracts + section 32s / vendor statements over the years. Here are our top three legal tips for buying property BEFORE you sign a contract.
Carefully inspect the property
A standard clause in the contract requires the vendor to deliver the property to you at settlement in the condition it was in on the day you signed the contract, although fair wear and tear is permitted. If the air conditioner or hot water unit wasn't working on the day you signed the contract: that's what you bought = buyer beware. Turning on all appliances and remote controls during your inspection (before you sign the contract) will give you an accurate picture of the condition of the property, and you may be able to negotiate on price if something like a rangehood button or garage door isn’t working. If the vendor agrees to fix something, a special condition in the contract must be carefully worded by our office (not the real estate agent!), to ensure the vendor is financially incentivised to fix the item before settlement day.
Check your finances
Don't rely on a pre-approval; it’s always subject to a property valuation. Before you sign a contract, show it to your lender/broker, so they can advise you if your pre-approval still covers you. At auction, you’re buying unconditionally, so you need to show the contract to your lender well before auction day. If you’re making an offer on a property for private sale, allow at least 14 days for finance approval under the subject to finance or loan clause. All the lenders, big and small, are overstretched and short-staffed at the moment, so the more time you can get in a subject to finance clause, the better.
Do your research
Understand the zoning and overlays affecting the property. You can ring the Council to confirm how densely the land can be developed. If relevant, read the Owners Corporation information to see if there are any major issues with the building or residents. If it's a recently built home, research the builder online - are they still registered? What is their reputation for defects? And visit the property at different times of the day and night, to get an idea about noise, congestion, the neighbours and sunlight.
Note: the above is general information and should not be considered as legal advice.
Photo by RODNAE Productions