How to reveal your prospective property is what you actually want
Posted 23 months ago
A solicitor’s guide to uncovering what you are buying and the hidden costs within the Marketing Contract
If you’re a prospective buyer and you’ve found a property that appeals to you and is in your price range, it’s time to begin reviewing the finer details. This is to guarantee the property aligns accordingly with your best interests.
The first step is to make sure you’re getting what you want!
It’s important that you look through the Marketing Contract to reveal what you are actually buying. Some tips on what to look for in the Marketing Contract are:
1. If it is vacant land
Are there any restrictions on what you can do with the land? For example, how is it zoned and what can you build? Are there any easements, restrictions or other encumbrances noted on the title to the land? Where are they located? Will it prevent you from building your house where you want to build?
2. If the property has a house
It is essential to ascertain what is being included with the sale (the inclusions) and what condition the house is currently in. Things to consider when determining this are the pest and building reports. Are these available and should you obtain them? Structural & termite issues can be a huge financial burden. We recommend acquiring current reports prior to the purchase of any property with a building.
3. If the property is a Unit
It is important to research the strata by-laws included within the marketing contact. Specifically: are you able to keep a pet? is smoking prohibited? and, are there any noise restrictions? Another related concern is the cost of the annual strata levies in addition to other costs.
It’s a good idea to inquire with regard to the broader legal concerns that may have been overlooked, but will significantly impact you subsequent to purchase. Some additional questions you can pose to ensure your property is everything it appears, include:
Are there any developments planned nearby – is a block of flats going to be built next door?
Do improvements have all the necessary Council approvals?
Is there a swimming pool, and if so, is it compliant?
Are there any outstanding Council Orders? Is council enforcing any action against the current property owner?
Are there any existing disputes with neighbours? These may include disputes such as over-hanging trees or fences.
The second step is to reveal what your purchase is going to cost.
Namely, are there any hidden costs?
A common misconception when signing the Contract, is that you are only agreeing to pay the price outlined on the front page. This is often not the case.
Yes, the Price is going to be the most significant expense, but make sure you consider and understand all of the costs and when these have to be paid, prior to signing a contract for purchase of property. Some hidden costs to be aware of and common timings of these payments are:
The Deposit. How much is the deposit that you have to pay – can you pay less than 10% of the price?
Stamp Duty. How much stamp duty are you going to have to pay? You will need to pay this at the time of settlement if you are borrowing money, or no later than 3 months after the date you sign the contract.
Land tax. Will you have to pay and land tax? Does the contract allow for an adjustment on land tax?
GST. Will you have to pay GST on top of the purchase price or is it included?
How much will the pest and building reports cost?
How much will you need to pay in legal/conveyancing fees and property searches?
How much are the bank fees?
How much will it cost to Transfer the ownership of the property into your name?
What rates and charges and levies will you need to pay?
Your solicitor can help you understand what you are buying, the questions you need answered and the trips and traps to avoid before you sign the Contract. Don’t get pressured to sign the Contract before you have all the answers you need. Once the contract is signed and the cooling off period is over, there is no turning back.
Now you’re informed on the nitty and grittier details of your prospective property, look out for our blog next week to further understand the key stages within the process of purchasing a property – The Conveyancing Process.
*Note this article does not represent legal advice and prospective purchasers should obtain legal advice as early as possible and always before entering into a contract for sale.
Get advice early! We are here to help – If you have a question about anything in this article, call us on 02 8095 7977 or DM our Facebook or Instagram page and we will be more than happy to answer your questions.