Top 5 Things to Consider When Buying
The top five things to consider when buying a house or land:
- Do Not Sign Anything
- Do not make Assumptions
- The Question of Land Development
- Pre-approval on Your Loan Means
- Building a Dwelling or Checking an Existing One
Do Not Sign Anything
Most people sign a contract under the guidance of the agent, which in some cases, may not be in their best interest. A lot of people have no real idea what they are signing and can be easily swayed or are under a false impression that some thing or be under a false assumption about their contract. It is a common mistake to 'assume' that everyone has the same idea or thoughts as you. Not only does the contract have to 'spell out' exactly what is wanted, it has to be worked correctly. What can I do?
Many people buy 'subject to' many different things, but when things go wrong, the actual wording, can make all the difference in achieving what you really want. Low Cost Conveyancing Services can provide such a service in which we can formalise special conditions to achieve a satisfactory outcome for the client.
Subject to Pest Inspections - A Common Trap
A common problem that keeps arising is when a client tells the vendor that they want the the contract 'subject to a building and or pest inspection report'. We have noticed a trend in which some agents often inform clients that they have a 'standard' clause about building and pest inspections. Low Cost Conveyancing Services often finds that 'standard' clauses are heavily weighed in the vendors favour and not in our clients. In a majority of 'standard' clauses, there is often a reference to 'major structural' or 'major pest infestation'. Such clauses should be avoided. Major structural and major pest are exactly that, major. In most cases when a condition is worded in this fashion it has little protection for the client. What if the report shows moderate or some problems at the property? What if the report shows previous pest infestation? In many cases that 'standard' inclusion keeps you in the contract and you cant exit under that clause. Get us to sort this at the start, before you sign.
Never Assume Inclusions
Chattels or goods coming with a property are often another area in which problems can arise. E.g.. 'Coming with this property is all electric light fittings, fixed floor coverings and fixtures and fittings as expected.' Do you know exactly what is coming with a property from this description and more importantly would a third person (e.g. A Magistrate or VCAT adjudicator) know exactly what was being sold with a property. Clients often say 'but I assumed it was coming with the house' or 'the agent has a picture of it on the website.' ASSUME NOTHING!!! Grey area's are often dishwashers, TV antenna's, remote controls for the automatic door lifter or split system, upright stoves, fly wire screens and removable clothes lines. Always assume, that if it isn't in writing, it does not exist!
Low Cost Conveyancing Services often look at contracts where people get us to do their Conveyancing in Melbourne or in Victoria where we consistently see inadequate descriptions relating to goods or chattels being sold with a property. Stop the problem before it arises! What to do? Get us to give you advice first, before you sign. If you have just signed a contract get us to look at it during the 'cooling off' period.
If we don't know the answer, we will find the answer!
Low Cost Conveyancing Services Melbourne team has a wealth of experience to assist you in avoiding a problem before it becomes one. Hassle free, is stress free and stress free is a happy transition from buyer to owner.
Do not make Assumptions
We go the extra step to explain what happens, why it happens and what can be done to help make the whole process just that bit easier. How? Part of our service is to give value added products free of charge to our clients! We will give you an easy to follow checklist that can be easily printed and will guide you step by step through your buying or selling process. Plain English explanations in 'easy reading terms' where by if you follow our simple checklist, it really takes away a lot of that uncertainty.
We give all our clients easy to read 'fact sheets' explaining what happens and why it happens, along with 'pitfalls' and ''land mines' that other clients have experienced. Low Cost Conveyancing Services also gives 'moving checklists', 'special offers', 'finance responsibilities', 'quick facts', 'title collection', 'will kits' and so much more!
Having a team of staff on hand to assist with your queries or questions is part of the confidence that you can have when dealing with a professional business. We encourage email questions to office so that timely and accurate responses can be given to you. This is a major difference between the way we do business compared to our competitors. We have experienced staff to help and assist our clients. We have several staff members on hand to take your telephone query all the time, during business hours. We are never further away than a phone call or an email. Now that is reassuring!
The Question of Land Development
Subdividing land is not something to be entered into lightly. From dividing a block into two, four or more blocks can be an expensive task! It can also be extremely costly if not done properly the first time. Low Cost Conveyancing Services assists in and around Melbourne with all aspects of Conveyancing relating to subdivision. People often confuse Conveyancing with Surveying. We are not surveyors, they 'survey' the land, we do the paperwork to assist in it becoming a reality! Clients often make the mistake of not checking with their lender first about what they plan to do. If a mortgage is held by a lender over the land, they call the shots! If your lender doesn't consent, then it wont happen. Speak to your lender or broker first, then to a 'surveyor' then us for assistance. If you are unsure where to start with the whole process, just start by calling one of our friendly team.
We'll help you through the process and give some guidance and tips to minimise costs. How can you we minimise costs, call our office now and find out!
Pre-approval on Your Loan Means
You should nearly always make a contract subject to loan approval. Frequently clients get told they are 'pre approved' and have nothing to worry about, by their banker or broker. Time after time we see clients get in trouble because of this. No matter how certain you are, make your offer subject to formal finance approval. In todays climate, 14 days seems to be about the average time it is taking lenders to 'formally' or 'unconditionally' approve a loan. If you are buying land and getting a loan for 'house and land' then allow 60 days as the building contract will need to be sighted by the lender and it can take forever to get it from the builder. Of course every case is different, so call us now to find out what you should do. Low Cost Conveyancing Services deals with these situations all the time. Often clients complain that the agent is chasing them for the loan approval. Never tell the agent it has been approved! Wait till you have it in writing and get us to inform the agent and any one else that wants to know. Don't get misled or trapped into saying something you are not 100% sure about. Who is looking after your interests?
Pre-Approval is not Formal Approval
Clients often mis construe 'pre approval' with 'formal approval'. The reality of 'pre approval' is that it is nothing more than a statement designed to take you out of the market for searching for a loan. The broker or banker will tell you that you have 'pre approval' often based on what you tell them without having supplied any factual information or proof that you can actually pay the money back. A 'pre approval' is designed to rope you in to a false sense of security so that person or institution gets first go at your business. Nearly every 'pre approval' is subject to, you, proving proof of everything you have stated or disclosed. I.e.. Payslips, tax returns, valuations on the property being bought, credit checks being conducted and so much more. DONT BE FOOLED. Till you have an 'unconditional approval' or a 'formal approval' in writing, you have nothing.
Anything that is 'subject to....' is a pre approval and can't be looked at any better than an indicator that no one is bound to. It often sounds great and is confidence building, but often gives false security.
Examples of this could be be e.g.. You are looking at a $500,000 property and the banker or broker says 'congratulations, you are pre approved for $550,000' and clients thinks that because the property is only $500,000 that they have $50,000 left over and don't have to come up with any money. It doesn't work that way! No matter what amount is 'indicated' to you, as a general rule only a percentage of the value of the property you want, will be given by the lender. Often the maximum a lender will give is 95% of the value of the property, LESS, stamp duties, costs, lending fees, mortgage insurance and all sorts of other associated costs that most people don't take into account. In reality you will need 5% + + at best. This usually equates to many thousands of dollars to first home buyers or first time buyers. Second and subsequent buyers are usually only too aware of this because a majority got a nasty surprise first time around.
Low Cost Conveyancing Services emphasises these shortfalls and makes every client aware of costs that their lender may have 'forgotten' to tell you. Our informative fact sheets and easy to read correspondence will go a long way to preparing you for settlement from the start, not 5 minutes before the end
Building a Dwelling or Checking an Existing One
Today its far more becoming common practice for buyers to make their offer subject to various external inspections i.e. 'building inspections, pest inspections and or soil (geotechnical) reports. Why do I need one? There is little consumer protection when buying a property of any sort. There are ways to limit yourself from buying 'a lemon'. For houses/dwellings/buildings pre inspection reports can give you insight into what you buying. However with liability concerns and the willingness by some to sue at the drop of a hat, many building inspection services will have so many general comments and assumptions that some clients often comment that they need legal advice just to get through the report that they have purchased!
Most clients make the mistake of getting a clause inserted into the contract that the agent suggests. It will often refer to 'major structural defects'. What about 'moderate' or 'some defects' or 'cosmetic issues'. Rarely do clients take into consideration that although a property has not structural defects it will may still have 'cosmetic issues' which can be very expensive to rectify. E.g.. Gutting needs replacing, tiling needs attention, carpentry work needs doing, concreting needs attention. Things like these can cost thousands, but you still cant get out of the contract! Not major structural issues..........see us first.
Earlier I touched on the practice of some agents to include 'standard conditions' relating to building inspections, Low Cost Conveyancing Services helps clients in this area. A 'standard building inspection condition done by an agent often means little to no protection for you. Conveyancing in Melbourne and throughout Victoria offers no guarantee or protection in relation to building inspections. Get the right clause at the start that may assist your situation. Get Low Cost Conveyancing Services to taylor a clause to your needs.
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