Buy a home not a headache

Kapi-Mana News - - OPINION -

Buy­ing a property is prob­a­bly the big­gest fi­nan­cial trans­ac­tion that most people will ever en­ter into. But how do you en­sure that the prop- erty is safe to buy?

A re­cent ex­am­ple shows what not to do.

Sarah and Andrew had been go­ing to open homes for months.

Fi­nally they found a property they in­stantly fell in love with. They had been look­ing for ages and, wor­ried that some­one would buy it, put in an un­con­di­tional of­fer.

Un­for­tu­nately, the property had been ren­o­vated by an owner who had not ob­tained the re­quired build­ing con­sent for the ad­di­tion of a mas­ter bed­room en­suite.

If Sarah and Andrew had been more care­ful and had the property thor­oughly checked out be­fore sign­ing an un­con­di­tional agree­ment, they would likely have dis­cov­ered the miss­ing build­ing con­sent.

That way they may have been able to make their of­fer con­di­tional on the seller tak­ing the nec­es­sary steps to rem­edy the sit­u­a­tion.

Be­cause they didn’t sign a con­di­tional agree­ment, Sarah and Andrew’s op­tions to re­quire the seller to fix things were limited and they are now in­cur­ring that ex­pense them­selves.

There are many ways you can check a property be­fore you are locked into a pur­chase.

The fol­low­ing are five golden rules. Where ap­pro­pri­ate you should con­sider in­clud­ing these as con­di­tions in your Agree­ment for Sale and Pur­chase to en­sure you are not bound to pur­chase un­til you are com­pletely sat­is­fied with the property: Get a builder’s re­port. These come in all va­ri­eties, but com­monly in­volve a suit­ably qual­i­fied builder go­ing through the property to check its struc­tural in­tegrity and the qual­ity of con­struc­tion.

Re­ports can also cover wiring, in­ter­nal mois­ture lev­els (ie, is it leaky?), plumb­ing and roof­ing.

Ob­tain a Land In­for­ma­tion Me­moran­dum re­port from the lo­cal coun­cil.

Such a re­port for the property is com­piled from coun­cil records.

It will tell you whether con­sents have been granted for any build­ing work and also whether that work was signed off with fi­nal com­pli­ance.

It will also pro­vide in­for­ma­tion as to where the un­der­ground ser­vices are lo­cated, an aerial pho­to­graph of the property and de­tails as to any his­tor­i­cal haz­ards that may have af­fected the property in the past.

Have your lawyer search the ti­tle to the property.

The lawyer act­ing for you will search the ti­tle and ad­vise on mat­ters that you need to know about.

They are look­ing for things like re­stric­tions and other im­ped­i­ments on the ti­tle.

Of par­tic­u­lar im­por­tance are the con­tents of rights, called ease­ments, where there are shared ser­vices and rights of way for ac­cess. Ob­tain a val­u­a­tion. You may wish to make your pur­chase con­di­tional on re­ceiv­ing a sat­is­fac­tory mar­ket val­u­a­tion re­port.

It is bet­ter to know the value of what you in­tend to buy be­fore be­ing con­trac­tu­ally bound.

These are car­ried out by reg­is­tered valuers and use com­par­a­tive val­ues of sur­round­ing prop­er­ties to find the mar­ket value.

If you are bor­row­ing money for the pur­chase, the lender will of­ten re­quire this re­port as a con­di­tion of ap­prov­ing fi­nance.

Make sure you have ar­ranged fi­nance to buy the property.

No mat­ter how per­fect the property is, in most sit­u­a­tions you will not be able to fol­low through with the pur­chase with­out some bor­row­ing.

You can shop around and find the lender that best suits your needs, or get a mort­gage bro­ker to do this.

Fol­low­ing these golden rules will help pre­vent nasty sur­prises be­fore you are con­trac­tu­ally bound to pur­chase.

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