No matter who you are, a well-seasoned real estate tycoon or a first home buyer; some purchasing dangers will apply across the board.
There are even state to state variations to be aware in regards to how the purchasing process works, which could catch an interstate purchaser off guard. Take for example New South Wales, who take offers and negotiate before a contract is signed. Here in Queensland an offer is usually made on the contract itself, making it immediately binding once fully signed by both parties.
Ideally as a buyer you should be treating every new purchase as a first-time experience, conducting research into small or large changes that could have occurred within the industry. Legislation is a prime example of an ever-changing aspect that effects how we purchase properties, making the employment of a good conveyancer of utmost importance.
Also be aware that unless you’re buying unconditionally, your contract should be subject to a property inspection, and that this is not standard in all contracts, across all states. In some states they will have to be added at the time of purchase.
If you’re looking into purchasing into a strata situation then be sure to go over the costs, insurance and fund balances with a fine tooth comb, focusing particularly on any pending legal matters that could result in liability against the property owners.
It’s a good idea to be present at any on-site inspections as well. Lived in properties are usually far from perfect and the written reports that you will read nearly always sound worse than what would be given verbally in person. This is due to liability that dictates a lot of standard disclaimers that are mandatory in written reports.
The detection of termites on a property might seem like a deal breaker, but it doesn’t have to be. They can be killed off most of the time and affordable repairs can be done to the property, putting in a barrier treatment can turn the situation around you can even ask the seller to assist financially.
But be cautious about using your inspection time to negotiate. It can be a good tactic to quote repair costs and make a case for a price reduction but it can send Vendors running to another buyer and terminating your contract.
A buyer’s or a seller’s market is what will dictate the outcome of subsequent negotiations, and as the buyer in a negotiation you’ll need to be prepared to walk away, but used properly, indifference can be a powerful tool!
Some experienced buyers will choose to purchase without the reassurance of financial approval but for most, the safest option will be to have your contract subject to finance.
And finally, when borrowing for any property purchases follow the sound practice of adding a 2-3% buffer, regardless of how the rates are looking at the time. Then re-calculate repayments at that higher rate to make sure any rises in rates won’t affect your affordability.