4 Basic Things to Look for When Buying a Property!

It can be an exciting yet daunting time buying a property. It is also a significant investment, so it is important that you do your due diligence before purchasing a property.  Here are four basic things to consider before buying a property.

1.  Check the condition of the property  

Remember you are buying a property as is. You need to consider the principle of “Caveat emptor” meaning “buyer beware”. You are responsible for identifying any issues with the property before you purchase it, as you could be stuck with the property after the purchase.

There can always be hidden issues with the property such as termites and structural defects that can be very expensive to fix. When purchasing a house, you should ask for a building report and pest inspection report to help you identify any hidden issues. If you are wanting to purchase a unit, it is a good idea to ask for a strata report that will show you a history of issues, current issues and future plans for the building. You may like to obtain a copy of the building report for the complex as well.

It could be a good idea to ask for a private inspection, where you can look around at the property and hopefully notice any visible issues. There are some very simple things you can do such as turn on all the taps and the heater or air-conditioner to check they’re working. You should also check any other appliances that are included as fixtures that they are working properly and that you are happy with the way they work. You can also open and shut all the doors and windows to check they close properly and there are no cracks or damage. A window or door that doesn’t close properly or won’t open at all could be a sign of structural damage.  Lastly, check for any signs of rising damp or even mould.

2. What is happening around the property?

It is vital that you do your research to see if there are any planned developments in the area surrounding the property you are considering. Changes in the vicinity can affect the property’s amenity. For example, is there a block of DA approved units planned to be built, that will obstruct your views or create traffic congestion in your street? Is the zoning around the property changing? It is a good idea to make enquiries with the local council before you exchange contracts. Check to see if there are any zoning changes that could impact the property’s use or value. It can also be prudent to check for zoning changes even after you exchange contracts as any change before settlement are at the purchaser’s risk. This becomes more relevant the longer the settlement period is after exchange.

3. Is your finance approved in writing?

Confirm that your finances are approved in writing before exchanging contracts. It can be very costly if you have to pull out of a purchase because your finances are not approved before settlement. For example, you can lose your whole deposit and can even be sued for damages if the vendor sells the property for less to another purchaser.

Be careful when you are simultaneously buying and selling property. For example, what happens if your sale doesn’t settle but you are committed to settling your purchase soon after? A conveyancer can help you with strategies to reduce risks, such as arranging bridging finance.

4. Check the contract

Engage a conveyancer or lawyer to check the contract, as there can be some very nasty terms that will need to be negotiated out of the contract. For example, if you buy a property and the contract says that the deposit can be released to the vendor, you may not get it back even if you legally can get out of the contract.

There are certain statutory warranties provided by law and a purchaser has a right to rescind a contract for a breach of a statutory warranty but only prior to settlement. An experienced property lawyer can explain if a statutory warranty has been breached by the vendor.

You will also need to consider things such as cooling-off periods, and settlement periods that can often be negotiated. Furthermore, the contract may outline problems with zoning or sewer easements, which you will want to identify before you sign the contract.

It is recommended that you speak to a conveyancer or lawyer before purchasing a property. Contact us for a free thirty-minute consultation with a conveyancer or lawyer specialising in property sales.

Any information on this website is general in nature and should not be taken as personal legal advice. We recommend that you speak to a lawyer about your personal circumstances.

Photo by Binyamin Mellish