Monthly Archives

October 2017

How potential buyers best prepare for the day of an auction?

We have written about this before, but we are continually asked about how potential buyers best prepare for the day of an auction –an auction can be a stressful occasion!

It can move so quickly that you don’t fully register what is happening until afterwards. For potential buyers, this can mean getting swept up in the drama and bidding more than you can afford.

To stay grounded on the day, there are several things you should do ahead of time. The first is to speak with a mortgage adviser early in the process. They will be able to give you expert advice on what to expect, how to work out your budget and help arrange a pre-approval. Remember, you cannot bid at auction if you don’t have your finance arranged: It is cash, unconditional.

As a buyer, you’ll want to be calm and composed. Auctions can seem intimidating if you’re not used to them, so do your research and ask family and friends about their experiences bidding so you know what to expect. Attend auctions to get a handle on how they work. There are many articles online with tips from top auctioneers (like familiarising yourself with the auctioneer’s style) and the dispelling of strategies (such as holding back throughout the bidding). This knowledge can help you feel more assertive on the day.

Lastly and most crucially, make sure your budget is established (which your adviser can assist you with). Stay up to date with market rates to try to figure out how much the property could go for. Decide both on what you’d like to pay for it and how much you’d feel comfortable going up to if need be. Identify what your price limit will be.

It’s important that you put boundaries in place to make sure you don’t go over your limit. Even the most sensible person can get disorientated by an auction’s high stakes drama and sense of urgency, but once that adrenaline dissipates, you could be left feeling anxious about having committed more than you can afford. Having a buyer’s advocate or family or friends there with you can help you stay on track and avoid getting in over your head.

Whether you secure the home of your dreams at your first auction or become a regular fixture at a few auctions, being prepared will put you in a good position to make the most out of this fast-paced and exciting event!

Tips for a good Final Inspection

Some careful planning and a thorough inspection can make the difference between a smooth settlement and an expensive, frustrating or delayed one.

A final inspection is legally your opportunity to inspect the property prior to settlement to ensure it is in the same condition as the day you purchased it, but what does that really mean?

Basically, it means that you must be satisfied that the vendors are leaving the property vacant of their possessions and in as-inspected condition. You don’t want to move in and find a pile of old paint cans to get rid of or patch up the hole in the wall where they removed their TV bracket.

We recommend that your final inspection takes place three to five business days prior to settlement. If there are items of concern this time frame allows for everyone to sort it out without a mad rush at the end between the solicitors.

When you book this in with your real estate agent, remember to ask if the gas and electricity will still be connected in order for you to test the electrical appliances. Be prepared with the contract conditions so you know what chattels are included or excluded.

If you see obvious damage, take a photo of it and report it to the agent and your legal representative on the day. If the vendor says they are not going to fix/remove the item, then talk to your agent, and report it to your solicitor. It is unlikely that settlement will be held up for a few paint cans but sometimes vendors do need to be reminded of their legal obligations.

Some tips on what to look for in your final inspection:

  • Electrical appliances – are they all in working order? If not you can request the vendor fix it prior to settlement.
  • Keys. Are there window locks? Are there patio bolt keys? Gate keys? Shed keys?
  • Are garden sheds clear of any unwanted items, paint tins and old garden tools?
  • Is the underneath of the house clear of junk and debris?
  • Remotes – heating systems, garage doors; ensure they are left behind.
  • Are the correct number of rubbish bins on the property?
  • Hot water system – does hot water come out of the tap?
  • Are all the chattels still present?
  • Are any instruction manuals available for the appliances?

That’s a quick run down for you, but as always, if in doubt, ask your solicitor.

Body corporate warnings

Q: We read your last two articles about apartments with interest. We are about to buy an apartment to renovate and just wanted to get your opinion on body corporates and what we should be wary of. We have read some real horror stories! Angela M.

A: Firstly be sure to get all the information from the selling agent: A pre-contract disclosure, copies of recent body corporate meeting minutes, financial statements, budgets, body corporate rules and the long-term maintenance plan. Be sure to read everything! The rules especially will give you an idea of whether the apartment block will work for you. If in doubt about anything then ask the agent or your lawyer. This is a very important step because this will tell you whether the building is well managed and well maintained and whether you are likely to be happy there.

If you are buying an apartment in a very small block you may find that the body corporate is not being run legally. Beware! And speak to your lawyer.

Even in a well-run complex remember that the body corp will be run by owners in the block, and it is a democracy. Not everyone will agree on everything so be prepared for a possible occasional ’confrontation’!

One of the major areas of contention is often around on-going maintenance: Some owners will want the block and common areas kept at their best, while others may not want to spend the money. Reading the BC minutes should give you a good idea of how well the complex is run.

In terms of renovating – read the body corp rules. Most complexes will allow ‘redecorating’ but may require notice of anything more than that. Generally, if you want to make a change that requires building consent you will need to get the approval of the body corp committee before starting any work.

Our strongest advice is to get on the body corporate committee. This will at least give you some control over the destiny of what may be your largest asset.