What Can Go Wrong When Buying A house? Well just about everything!
Often when individuals ask this question it is too late and they are knee deep in fighting expensive fires.
Conveyancing is a very important aspect of purchasing your home which often is undervalued by individuals that underestimate the risks associated with buying or selling a property. This article is not intended to scare you but rather to provide you with some examples of why you need a lawyer by your side that will guide you through the process of buying ensuring that your interests are protected at all times and the process is stress-free for you and the family.
1. Can you afford it?
Before even walking in the door to a property ensure you know what you can afford. Consider all the “hidden costs”.
When purchasing a property costs to consider are pest and building inspection costs, bank charges, registration fees, stamp duty, legal costs and search costs, etc.
You may need to speak to your bank/mortgage broker, Solicitor, your Accountant and even your boss.
a) What fees will the bank charge – do you have to pay mortgage insurance?
b) Is your job secure?
c) Will your parents Guarantee your loan if needed?
d) Are you eligible for any stamp duty concessions or first home owner grants?
e) What searches do you need to conduct and how much will they cost?
f) What if there are issues with the property that may require repairs after settlement?
g) When do I need to pay for all these costs?
If you have not sought to find out all costs associated with buying your new property and have not got enough money to pay for it at settlement you cannot settle and will be in breach of the Contract. Always over budget for what costs may be involved in buying, it can be a nice surprise after settlement if you have not spent it all
2. Are you Certain you know what you are buying Before signing the Contract?
Don’t Assume – unless it is noted in the Contract, there is no agreement. If there is a feature of the property that is being advertised i.e. a Bar or television unit, don’t assume that it forms part of the sale of the property.
3.Have you received verbal advice that is not in the contract?
Even if you have been advised by the Agent that “the bar is included” it must be included in the Contract. After the Contract is signed it may be too late to negotiate an agreement with the Seller, they are not obliged to leave it.
4. Contracts may look like simple documents, but often the simple things can be overlooked.
Any errors in the contract can prove to be costly. Ensure your FULL NAME is noted including all middle names, ensure the Contract is subject to what you require. You have a right to obtain legal advice prior to entering in to a Contract.
5. Don’t Rush
Buying your first home, another property or an investment property is a massive financial decision to make. Don’t feel pressured. Take the time to get advice. After the Contract is signed by all parties it may be too late to actually get what you thought you were contracted to buy.
6. Is the Property you are buying been built properly? Have the relevant approvals to undertake the works been done and were they properly certified?
Any improvements built on the property will generally need Council approval. It is common that approval has been obtained but the Final Certificates have not issued. These are 2 different things. In Queensland, it is “buyer beware” if the Contract does not provide for Final Certificates you may not have any rights to request that the Seller obtains them. Making an application to Council to finalise an improvement involves an application fee to Council and may require works to be completed to enable a Final can issue. This can potentially cost thousands. By obtaining advice prior to entering in to a Contract, your risk could be avoided and give you rights under the Contract.
7. Does your Purchase need to be Conditional on the sale of your home?
If you are selling your home to buy a new property it is strongly recommended that the Contract be made subject to settlement of the sale of your home. A simple condition noting “this Contract is subject to the sale of the buyer’s property” is not enough. Until you have sold your property and have received the money there is a risk your property won’t settle. Don’t put yourself at risk, if the condition that forms part of the Contract isn’t correct you may be in a position that you have to buy your new property BUT have not sold your existing property.
8. Have you agreed to Realistic time frames?
Before agreeing to sign a Contract, calculate when the dates are due. You may already have commitments or be overseas and the proposed dates are not convenient. This is your chance to propose dates that work for you. Once the Contract is signed the Seller is not obligated to change the date.
9. How much Deposit can you really afford?
Do you have money in the bank? There is no requirement to pay a large deposit when you enter in to a Contract, although it is preferred. If you know you don’t have $20,000 in the bank – don’t sign a Contract that says that you will pay $20,000 in 14 days’ time. You need to agree on an amount that you can afford.
If you can’t pay the deposit when it is due and the Seller doesn’t agree to amend the terms of the Contract, you will be in breach of the Contract and the Seller has a right to terminate the Contract.
10. Have you chosen the right lawyer to do your conveyancing?
Saving a few dollars in your conveyancing is the last thing you should worry about when something goes wrong with your purchase. The old saying you get what you pay for unfortunately is true in every industry including law. Don’t be tempted by silly up front pricing. Chose a lawyer that will stand beside you when things go wrong and provide the level of assistance to protect your investment.
Costs associated with conveyancing are very small in contrast to the price of your home or the potential loss of a deposit. Is it really worth introducing risk and stress into your purchase to save a few dollars?
Our team at A.L.F. Lawyers is ready to assist you with the purchase of your property. We guarantee you will always deal with just one professional person for your entire conveyance.