For this months Five by Five I would like to introduce Gino Adoranti from Australian Property Legal. Gino has provided some great tips you should consider if purchasing a property.
Purchasing a property can be a daunting task. Using a solicitor can help take the stress out of the process and ensure that your interests are protected. This is intended to be general information only. You should seek advice from a solicitor who will be able to provide you with advice tailored to your specific needs. The following are 5 things to consider when purchasing a property.
1. Have a solicitor go through the Contract for Sale
The Contract sets out the terms of the purchase. Since all properties are different some contracts may contains terms that may not be in your favour and may favour the vendor at your expense. A solicitor will be able to explain the terms to you and liaise with the vendor’s solicitor to ensure that any unfair terms are either renegotiated or removed altogether. A solicitor will also be able to identify from the Contract, if there are any restrictions on what you can and can’t do with the property. This is particularly important if you are planning on carrying out building work on the land.
2. Pre-purchase inspections
These include, but are not limited to, reports such as a Pest Report, Building Report and a Strata Report (if purchasing a unit). When purchasing a property a purchaser usually buys it “as is”. It is therefore, important to carry out pre-purchase inspections before exchanging contracts with the vendor, as these reports may reveal problems with the property which could result in major expenses being incurred to rectify the problem. A few hundred dollars up front could end up saving you thousands if, for example, you discovered after you own the property, there were termites in the property or some structural problem.
3. Ensure finance is approved in writing
Most people, when purchasing a property will require a loan from a financial institution. It is important to have the loan unconditionally approved in writing prior to being committed to a contract or ensure that the contract is subject to you getting finance approved. Otherwise, if your finance is not approved for some reason, such as a default in your credit history that you may not have been aware of, you will still be obliged to complete the contract or risk losing your deposit.
4. Pre settlement
Settlement is when you are required to pay the balance of the purchase price and when you get the keys to the property. You usually are not required to attend settlement. Usually, the solicitors and the representative of the respective financial institutions attend and swap the title documents for the balance of the purchase price. Your solicitor will then contact you to let you know you are now the proud owner of your new home. Immediately before settlement, you should carry out an inspection of the property to ensure the property is in a similar condition as it was at exchange of contracts, fair wear and tear excepted. Also, you should take out insurance over the property prior to settlement.
Since you are now the owner of a significant asset you should consider having a Will prepared or updating an existing Will. This is a document your solicitor will be able to prepare or review for you. When you buy a property there are two ways you can choose to own it. Firstly, Joint Tenants which means if one owner dies the remaining owner/s are entitled to the property regardless of what is contained in the deceased’s person’s Will. This method is usually used by most couples who buy a property together. The second way to own property is as Tenants in Common. This is usually the method used by business partners or people who are not closely related. In this instance, the deceased’s persons share in the property would go to the person nominated in their Will.
If you require assistance when buying or selling a property, please give Gino a call on 0249411844 at Australian Property Legal. Gino can help you with all your property needs.