Now that your search has ended, and you’ve finally found a property which ticks all of the boxes, you probably think that you are guaranteed smooth sailing from here. While in most cases, your biggest problems will be packing and organising the removalists, sometimes things don’t always go to plan. Unfortunately, some buyers find themselves in difficult and uncomfortable situations when it comes to the purchase of a property, so we’ve put together a list of 5 potential pitfalls to avoid.
You don’t have a binding sales contract in place
Simply paying a deposit or verbally agreeing to purchase a property does not mean the property is yours. Remember that a contract only becomes a legally binding agreement once both the buyer and seller have signed. Prior to this, either party may withdraw from the sale without any penalties.
You’re gazumped
If there is no legally binding sale contract in place, you are at risk of being gazumped. Gazumping is a term used to describe the situation where a buyer has not yet signed a sale contract, but has verbally agreed or paid a deposit for a property, and the vendor then receives, accepts and signs a contract with another buyer – generally with a higher offer.
While the deposit will be returned, no compensation is payable for any legal advice, title searches, or inspections the original potential buyer may have arranged and paid for.
Discovering the property is not in the same condition
It’s your responsibility as the buyer to ensure the property is in the same condition as it was when the purchase contract was signed; otherwise you may be in for a nasty surprise after you take ownership. Arranging an inspection as close to settlement as possible is advised to give you the opportunity to check that:
• Any appliances that are included are still in the property and are in working order.
• Fittings including light fixtures, blinds, curtains, and awnings are still in the same condition they were in when the purchase contract was signed.
• There is no new damage to the property.
• The owner/tenant has vacated and left the property in reasonable condition, if the property is being purchased unoccupied.
If you do discover any issues, it’s important to notify your solicitor and the real estate agent immediately to discuss what steps need to be taken to rectify the matter.
Discovering structural or pest damage after settlement
Can you imagine taking ownership of your new property only to find it’s infested with termites or has significant structural issues which are going to cost you thousands to repair? Don’t let yourself be caught out.
Building and pest problems don’t discriminate, so it’s essential to arrange pest and building inspections in Melbourne, and anywhere else around Australia. This is a vital step before your property settles, regardless of the location. Many buyers obtain inspections during the cooling off/conditional period of the sale, giving them an opportunity to address any problems with the seller, and in some cases, not proceed with the sale if matters can’t be resolved satisfactorily.
Your settlement doesn’t go ahead
Your solicitor or conveyancer will normally arrange with a lender the details of the transfer of funds to the vendor for settlement. However, if something does go wrong, and settlement doesn’t process as stated in the contract, the vendor may be entitled to charge you interest or fees. It’s a good idea to double-check the arrangements.
As you can see, many of these issues can be avoided, with a little planning. Hopefully, being aware of potential pitfalls and getting some professional advice will ensure your next property purchase is hassle free.
By Darel McBride
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