5 Important Things to Consider When Purchasing a Property
With the federal election result decided, we have seen an increase in the interest in people looking to list their property for sale and people looking to buy property.
For the people looking to buy, there are 5 things that all purchasers should consider when purchasing a property to make sure there are no surprises before or after settlement.
Obtain a Building and Pest Inspection
We recommend having a building and pest inspection done prior to the signing of the Contract of Sale or making the Contract of Sale subject to a building and inspection. By making a Contract subject to these inspections, if it is found that there is a major building defects or a termite problem, you as a purchaser could then avoid the Contract or negotiate a new sale price.
Obtain pre-approval or make the contract subject to Finance Approval
You should ensure that you have finance in place or pre-approval from your lender. As the Royal Commission into banking has made banks tighten their lending for property purchases, it is now even tougher to obtain finance. We have seen on occasions where finance that had previously been approved was subsequently declined. By making it subject to finance, it allows you to keep your deposit if finance is declined.
Measure your boundaries before you buy
You should measure the property to ensure that fences are in accordance with the title plan. General Condition 3 of the Contract of Sale states the purchaser accepts the title boundaries as they are currently fenced. If the property is not fenced in accordance with the title boundaries, an adverse possession claim may be required, or you may have to incur the costs of having your fence moved onto its correct alignment.
Make sure any plans for future development is acceptable to the planning authority
You should check with the local council that any plans for future development or use is acceptable to the council (ie. extra dwelling on the property, using a factory as a home) otherwise you may not be able to use the property for your intended use.
Take out insurance once you have signed the Contract of Sale
Once you have signed the Contract of Sale, you have an insurable interest in the property. As you would with a car, you want to protect your most valuable asset. To avoid the risk of the Vendor’s insurance lapsing between the date of Contract of Sale and settlement, take out insurance to avoid any surprise occurrences (ie fire, theft or damage)
If you have any questions regarding the contents of this article, please do not hesitate to contact Phillips & Wilkins and our Property Team of solicitors and conveyancing clerks will be able to guide you through the property purchasing process.
At Phillips & Wilkins, Chris practices in the areas of Property Law, Conveyancing and Family Law. Chris has grown up in the Northern Suburbs and continues to be a part of the local community as being a member of the Old Paradians Amateur Football Club and the Mill Park Cricket Club. Learn more about Chris' legal experience.