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First home purchaser series - Part 2: Signing the agreement

By Michael Bennett - 10 Sep 2019

You've got your deposit, you've found the right property, now a multi-page document is sitting in front of you and a real estate agent is asking you to sign. It is imperative that you get in touch with a lawyer before you enter into an agreement. The best chance of you negotiating favourable terms is before you sign. This is even more important if you are planning on buying a property "off the plans" that has not yet been subdivided or built. More information about buying off the plans is available in a previous blog.

If you have already signed an agreement, don't worry, we can still work though the agreement with you.

There are a number of things that you can make an agreement conditional on that must be satisfied and confirmed before you are required to pay your deposit, or complete the purchase.

Due Diligence

This is a catch all, general condition that allows you to investigate any aspects of the property or your ability to purchase. You can cancel the agreement with no detriment if something isn't right, or you simply change your mind.

This will also allow us a chance to review the title to the property for any interests or restrictions registered against it that may affect your use or enjoyment of the property.

Land Information Memorandum and Council Property files

More commonly known as a LIM, these reports can be obtained from the Council and contain a wealth of information from whether the property is prone to flooding or excessive winds, through to whether there are any outstanding building consents yet to be signed off. This may also include details of prior contamination, asbestos issues or engineering reports in respect of soil instability. You can make your agreement subject to you ordering a LIM and being satisfied with the information in this.

As a LIM report does not include house plans, we recommend that you do obtain the Council's property file in respect of the property. The property file will give you copies of the house plans and all other information held by the Council in respect of the property. It is important that you do check that the house plans correspond with what is on site. If it does not, then this needs to be addressed prior to confirming an agreement as unconditional.

Finance

If you are yet to receive confirmation from your bank regarding loan finance, you can make your agreement subject to being able to arrange finance. This provides you exact figures to take to your bank and the ability to budget whether you will be able to afford the repayments and outgoings on the property.

Building Report

If you are buying an existing home, you may want to have a professional look through the property in order to ascertain if there are any structural or building issues. There are a range of inspectors available who will investigate the property to varying levels of detail. If the property is on a cliff or on a steep site, you should consider having an engineer inspect the site and check for evidence of any land instability or any movement in the dwelling.

If you have anything else that you would want included as part of your pre-purchase investigations, let us know and we can insert clauses into the agreement to allow you time to satisfy yourself of any concerns before being locked into the purchase.

Get in touch with Michael Bennett or a member of our property team before signing up.

 

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