Purchasing a property is often one of the largest financial considerations an individual or family can have in this life, so it is critical to make sure that you have the best advice on hand and are informed in making your decisions.
Too often we hear about property buyers who incur additional, unnecessary costs because they were unaware of their obligations.
Prior to the exchange of Contracts to purchase a property, it is advisable to undertake many checks and balances including the obtaining of certificates, statements and reports.
To assist you, below are some of the more important things you’ll need to consider. These considerations may differ depending on whether you decide to buy the property at auction or by way of a direct or “straight sale”.
Please understand though that every situation is unique. Other considerations may also have to be undertaken depending on your individual circumstances.
If purchasing the property at auction:-
Steps need to be taken even ahead of the auction day.
Firstly, make sure your loan is pre-approved. If you are the successful bidder at the auction and your loan is subsequently denied, you must still purchase the property. There is no Cooling Off.
Secondly, it’s imperative that at least 1 – 2 weeks before the auction date, you get in touch with your solicitor. You will need to address appropriate steps with your legal representation.
Your solicitor will review the Contract relating to the property and request certain amendments to its terms and conditions as necessary and desirable to you. These amendments may vary based on your individual requirements but may include aspects such as settlement dates, penalty clauses or rates of deposit.
During this period of time, your solicitor will also assist you in the required levels of due diligence on the property (see below) and correspond with the vendor’s solicitors to ensure that terms are agreed.
If you are then the successful bidder at the auction, the Contract is altered to reflect the agreed amendments and terms prior to your executing it.
If purchasing the property via a direct or “straight sale”:-
You may place an offer on the property prior to speaking to your solicitor but do not sign anything. Remember that until exchange of Contracts, your offer can always be withdrawn.
Once an offer is accepted, your solicitor undertakes the review of the Contract and requests various amendments to its terms as necessary and desirable to you.
Your solicitor will also assist you in the required levels of due diligence on the property (see below).
Make sure that you have unconditional finance approval prior to exchange of Contracts. You need to be aware that in most cases, once Contracts are exchanged, there is no cooling off period and you are obliged by law to purchase the property even if finance is not approved!
Due Diligence
Whether buying at auction or by way of direct or “straight sale”, it is recommended that the following be due diligence be undertaken prior to the auction date or exchange of Contracts:-
● Obtaining and assessing all property condition reports
These include but are not limited to pest reports, building reports and strata reports
● Sighting relevant approvals
The current owner of the property must have all approvals associated with the structure on the land available for you to review and check. Otherwise, it is a good idea to approach the relevant Council for these details.
● Ensuring that the property is suitable for your purposes
It’s easy to get carried away in the moment. We always remind our clients to really assess if the property is right for you.
● Checking that everything in the property is in working condition
For your investment security, it is important to check every single switch in the property, the hot water system, air conditioning, alarm etc.
● Seeking the right legal advice
Navigating your way through the purchase of a property requires sound, reliable and considerate legal advice. At Zelden Solicitors we are here to help you make sure that the purchase of your property is done in exactly the correct way, ensuring that the Contract is right for you and that you know everything is in capable hands.
Reach out to us today to talk about your conveyancing requirements.