Know your rights before buying house
When you are in the market for a house - especially for the first time - it can be easy to feel as though you are on the back foot.
You might be dealing with a smooth-talking real estate agent and a vendor who thinks the market is on their side. But buyers have a number of rights to protect them. Knowing them will help you to avoid being burned.
First, get legal advice
Before you do anything, get in touch with a good lawyer you can trust. You are allowed to have them look over any sale and purchase agreement before you sign it, to flag potential concerns. They will also check the title for you.
You can make an offer subject to as many conditions as you like. This might include things such as a building report, LIM, finance, sale of another property, or even just your solicitor’s approval. In a hot market, an offer with a lot of conditions may not be as appealing to a vendor. But the agent should not put pressure on you to leave out anything that is important to you.
Once you’ve signed
When your signature is on the dotted line, the agreement is legally binding. If a condition cannot be met, for example you get a building report that finds serious issues, you can pull out while your agreement is conditional, or renegotiate the price.
Dealing with agents
Real estate agents act for the seller. But they must also ensure they treat buyers fairly and they cannot put either party under too much pressure. They cannot withhold information about a property or give you inaccurate information. They also cannot make any claims they do not have evidence for.
Once your offer has gone unconditional, but before it settles, you are entitled to conduct a pre-settlement inspection. You should check whether the chattels listed on your agreement are still there and whether anything has been damaged since you signed your offer.
If you spot a problem, contact your lawyer immediately, who will deal with the vendor’s solicitor to get it fixed. Just finding it is dirty is not enough - if you are really worried about getting a clean how you will need a condition in your sale and purchase agreement requiring a full commercial clean before settlement.
Buying off the plans
If you buy a property that has not yet been built, the situation is a little trickier. Most developers include sunset clauses in their contracts that allow them to back out if a property has not been built within a set period of time. When prices are going up quickly, these are unpopular with buyers.
The clauses help developers if costs have blown out, construction has proved more difficult than expected, or there have not been enough sales. But while buyers get their money back, the delay can leave some out of pocket.
Many agreements allow developers to make changes to the plans up to a certain level without consulting buyers. Your lawyer should point this out to you. To avoid getting caught, do as much due diligence on the developer as you can. Get updates through the development process.
If something goes wrong
Your first recourse is usually to your lawyer. If you feel a real estate agent has let you down and not complied with the law, you can complain to the company they work for, or to the Real Estate Agents Authority.
Research, advice and planning can help you on your way to buying your first home.