Purchasing a home?
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Purchasing a home is one of the most important and costly decisions individual will make in their lifetime. Here are some tips to help minimise the stress of purchasing a property:
- Conduct due diligence: Ensure that your lawyer reviews the contract & vendors statement to ensure your expectations are met. You may need to insert necessary conditions to the contract such as building and pest report inspections or finance clauses. Taking this approach ensures you understand your rights and obligations that follow once you enter into the contract.
- Conduct an inspection: It is imperative that you inspect the property. You will be able to ascertain if there are any problems with the property such as mould, water stains, termite manifestation and the like. You can check if the appliances are working and also find out their age. In addition, making sure that all permits for any works conducted have been obtained and are compliant. You should also measure the land to ensure the measurements are in line with the plan boundaries.
- Obtain finance: If you are obtaining finance it is vital that the application has been commenced prior to the contracts being signed. Lenders may take time to approve a loan and therefore having this process started allows for certainty with the contract moving forth. In any event, the contract should always be made conditional on loan approval being obtained by an agreed date. If you are purchasing a property at auction, there is no cooling off period. The contract therefore becomes binding once signed and you have an unconditional obligation to pay the deposit and the balance of the contract even if finance is not approved. The majority of homes that are bought by private sale will have a cooling off period of three business days from the date of signing. It is therefore imperative that you carry out the relevant checks before auction and to ensure that you have unconditional funds available to pay the deposit.
- If you choose build a new home or extend the home, you must check with the local council to see if there are any restrictions or planning approvals that may be needed. This is where a title search will be needed to check to see if there are any easements or covenants that could restrict you from building on or demolishing the home.
What happens when I purchase a tenanted property?
It is important before you purchase a property is to find out what the tenancy agreement is between the tenant and the current owner. The agreements can either be periodic or fixed term. If it is periodic tenancy it means that there is an indefinite period on the other hand a fixed term is when there is a certain time that is agreed between the tenant and land lord.
What you will need to know to eliminate any risks associated with the purchase under a tenancy agreement?
- It is a good idea to ask the current landlord the background of the tenant, including their career, how long they have been at the property and their record of paying their rent on time.
- You will need to check the lease agreement that the property is currently under, aside from the terms also have a look at the bond held and how much the tenant paid per week.
- It is important to make sure you ask the seller to check if there are any potential damages or existing issues that may cause concern. You want to avoid any unnecessary costs once the transfer of ownership has been completed.