By Louise MacCallaugh - 15 Jun 2012
Last week's announcement that the OCR will remain unchanged is
good news if you're looking to purchase a new home ... provided you
can find a house to buy! Reports of limited residential housing
stock are rife, creating a fertile environment for vendors to
achieve premium prices. However, it is also a time when
purchasers may be tempted to take additional risks in an effort to
secure a property.
In this market we strongly encourage purchasers to seek legal
advice before attending an auction or placing an offer on a
property. Your lawyer can advise you of potential issues with
the property title and ensure that the agreement contains clauses
to protect you. Remember, real estate agents act for the vendor and
have the vendor's interests in mind.
Things for purchasers to bear in mind in a competitive real
estate market are:
- Don't rely on verbal information you receive from the real
estate agent or vendor. Ideally all queries relating to the
property should be put in writing (eg. via email), particularly if
the query relates to the quality of the house (for example has
the vendor had any issues with leaks? Has the vendor carried out
any repairs or other building work on the property?)
- If you're buying a unit or an apartment, obtain a copy of the
minutes for at least the last three meetings of the body corporate.
Body corporate minutes contain very valuable commentary about
potential issues with a property that may not have been disclosed
by the vendor.
- Don't rely on your bank's pre-approval letter if you have the
opportunity to add in a finance condition to the contract. Most
pre-approvals are conditional on the bank approving the sale and
purchase agreement and your bank can refuse to lend if they are not
satisfied with an aspect of the agreement.
- Don't rely on a pre-purchase inspection report prepared for the
vendor. If the report is inaccurate, you may not have a right of
recourse against the company that prepared the report for the
vendor.
- Do your homework. There is a lot of free information
available on the internet about particular areas but nothing beats
taking a drive around the suburb you're interested in and, better
still, knocking on the doors of neighbouring properties to get an
idea of potential problems with the house you are interested in and
neighbourhood.
For more information contact Louise MacCallaugh.