You have found it! The home of your dreams! The investment property you have been looking for!
You have inspected it and you can’t wait for it to go to Auction so you can BID BID BID!
BUT WAIT! Have you had the proposed Contract reviewed and have you consulted a lawyer / conveyancer?
What for you ask?
Well, let’s consider the following dilemmas that can take place:
- You bought the property at auction but 2-3 days later changed your mind on the purchase.
- You would have liked to pay a reduced deposit.
- You would have liked a longer period of time to settle as you were also looking at selling your current property.
- You realised that you only obtained pre-approval finance and not final approval finance in writing.
- You learn that the stove, dishwasher, blinds, light fittings, sheds or other is/ are not included in the purchase or not in good working order as promised to you.
- You learn that you cannot use the property for the purpose you intended i.e. building or business.
- You are restricted from demolishing, building or altering the property.
- You learn a building on the property was illegally built and does not have proper approvals and there is a risk of demolition.
- You learn the property is infested with termites or has other building defects.
- You learn there is aircraft noise in the area of the property.
- You learn that the fence is not located within the correct boundaries of the property.
- You learn the strata levies are high due to building defects.
- You learn that your pet is not allowed in the unit.
If you attended upon a lawyer / conveyancer prior to the Auction you would have been provided with some handy information that would have avoided the above:
- When you buy at Auction there is no cooling off period i.e. you do not have those 5 business days to walk away and change your mind. Note: This also applies to a property purchased on the day it passed in at Auction. Therefore you are bound to complete the Contract and pay the purchase price.
- Your lawyer / conveyancer can correspond with the seller’s representative prior to the Auction requesting that if you are the successful bidder that the deposit be reduced or that the settlement period be extended /reduced or clarify in writing the inclusions / improvements of the property and their working order. In addition, the proposed Contract will have standard and special conditions which lawyers / conveyancers will review and request amendments for your best interests.
- Your lawyer / conveyancer will confirm with you on how you will be financing the purchase and ensure that you have written final approval from the lender. The lender may require information on the property which your lawyer / conveyancer may be able to assist.In addition, your lawyer / conveyancer will ensure that you have taken into account stamp duty, mortgage insurance and other expenses so that you have sufficient funds to complete the purchase.
- Your lawyer / conveyancer will review the proposed Contract. They will provide advice and recommendations for searches to be conducted prior to Auction such as valuations, building inspections, pest inspections, strata roll inspections, surveys; and zoning, use and noise enquiries with the local council. Subject to the outcome of the above searches, your lawyer / conveyancer may request additional conditions to be inserted in the proposed Contract or a reduced purchased price or further documents to be provided by the seller.
As you can see, having the proposed Contract reviewed by a lawyer / conveyancer is imperative.
Please note that some of the above information does not just apply to purchasing a property at Auction but when generally purchasing a property.
Next post?.…Let’s examine what is usually in a Contract and what we learn about a property!
Disclaimer: Please note our blog is for general information only and accuracy of information is not guaranteed. It is not offered as and does not constitute specific legal advice or opinion for you to act or rely on. You should seek legal advice in your state before acting on relying on this information.