Buying a property?
There are 5 things you need to know.
Property prices in Victoria have generally been falling during the past 18 months. While this may open up opportunities for buyers (in particular first home buyers who for many years have been priced out of the market), there are still a number of factors that buyers need to consider and do their due diligence on:
- A falling property market certainly opens up opportunities for buyers however credit has tightened up, particularly when it comes to investment properties. Our recent experience is that banks are taking longer than usual to approve loans. In the past banks would frequently approve loans within seven to fourteen days of application being made. This process now often takes longer and sometimes twice or three times as long. If you are making an offer to buy a property, you should take this into account and ensure that you allow plenty of time for your bank to approve your loan. It also goes without saying that unless you have all of the funds required to make your purchase, you should ensure that your contract is marked subject to finance.
- The standard general condition in the Victorian contract of sale of land only requires the seller to ensure that the property sold to you is in the same condition it was in when you signed the contract. This means that you take the property together with any defects it may have. This makes it crucially important to carefully inspect the property.
- Before you sign the contract, you should ensure that the contract is made subject to a building and pest inspection report being obtained from qualified professionals because structural defects and the presence of pests can be extremely difficult to detect unless you know what you are looking for and where to look. If the report discloses major building defects or the presence of pests (ie. termites or borer beetles for example), and provided the clause in the contract is sufficiently clear, you will be able to cancel the contract.
- Aside from pests and serious structural issues, there may also be minor defects with the property that are uncovered as a result of an inspection taking place or as a result of your own due diligence. If you uncover faults such as broken-down fixtures or fittings you would want to ensure that you do so before the contract is signed so that you can try and negotiate on and impose any repair and rectification requirements on the seller.
- Review contract and section 32 statement
- It is important to have the contract of sale, section 32 statement and attachments to the section 32 statement carefully reviewed to determine if there are any restrictions on your ability to use the property (such as easements or restrictive covenants) or any encumbrances over the property (such as mortgages or caveats that would need to be discharged at settlement).
- Use of property
- It is also very important that you work out whether you can use the property as you intend to. This needs to be investigated before the contract is signed. For example, you may wish to subdivide the property into x number of lots however there may be planning or zoning restrictions that may prevent or restrict further subdivision of the land. If you are buying a commercial property, there may be planning restrictions that may prevent you from operating a certain type of business from the premises. All of this should be investigated before the contract is signed.
Parkston Lawyers is able to assist you with all the legal and conveyancing requirements of selling your property so please do not hesitate to contact us on firstname.lastname@example.org or (03) 9989 0912.