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Things to consider when Purchasing a Property

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Things to Consider

The current property marketing in Sydney is constantly changing. If you have purchased a property in the past, you may have experienced the rush and urgency placed by all parties in exchanging contracts and placing a deposit. The lead up to securing the property of your dreams may be one of the most stressful times. This is because of time restraints and urgency required in acting on the matter.

Any property lawyers in Sydney will strongly advise all parties entering the property market to consider the below-listed items to avoid being out of pocket thousands of dollars, being disappointed with your purchase or being a party to a law suit.

  1. Why are you buying a property?

Commonly, the reason properties are purchased are:

  1. An investment property deriving rental income (whether it be residential or commercial);
  2. Your principal place of residence; and
  3. A development opportunity.

Ask yourself this question from the outset. It is crucial to know why you are buying a property as it sets the stage for what is to follow.

  1. Have you arranged your finances?

Once you know exactly why you are buying a property in NSW, your lender/broker will be able to advise you on your borrowing capacity. Having an answer to question one above is vital. If the property is being purchased as an investment property deriving income, the rental income itself may be taken into consideration when determining your borrowing capacity. Once you are aware of your borrowing capacity, you will then be able to determine a price guide for your property purchase.

Do not sign any contractual documents for a property purchase until you have your loan approved. If you sign a contractual document for a property purchase and you are unable to have your loan approved, you may be liable to lose your deposit and may also be sued for damages.

  1. Always have your contract reviewed BEFORE signing

Contact your property lawyer in Sydney to arrange for your contract to be reviewed. The contract of sale may contain clauses and/or dealings which could substantially impact your ability to use the property for your intended purpose. A solicitor should provide you with advice on the contract, special conditions, dealings and annexures which will better assist you in determining whether the property is a suitable purchase.

If the property is a free hold property, items which may influence your decision to buy the property include easements, restrictive covenants, council policies and sewerage service locations.

If the property is a strata titled property, items such as by-laws, special levies, disputes or defective works may influence your decision to purchase the property.

Further, there may be special conditions which impact the settlement date. Settlement may be subject to the occurrence of an event and you may be waiting longer than anticipated to settle and utilise the property (e.g. grant of probate, issue of an occupational certificate, registration of strata plan).

  1. Order a pest and building report or a strata report

A pest and building report is carried out by a building professional and can assist you in determining whether there are any defects in the property which you can not identify and whether you will need to set aside additional funds to remedy the defects in the property.

A strata report will reveal whether there are any upcoming special levies, whether the property is in arrears for strata levies, any anticipated work to be carried out to the common areas and generally if there are any disputes or issues in the building.

Your property lawyer should guide you throughout the entire process. Contact our office today to see how we can assist you.