Entering a Contract to Purchase Property

  • Entering a contract to purchase property

When you’ve been researching the market to buy an investment property and you find what seems like the perfect deal, it can feel like you’ve done all the hard work. But then comes the contract and this is where dream deals can become nightmares if you don’t get it right.

Of course, if you’re like most regular people, a contract is complex, dense and just about impossible to understand, which is why you need the right team of professionals around you.

Engage a solicitor

This is the most crucial step when it comes to a legally binding contract.

A solicitor, or conveyancer, who specialises in property law can explain the contract to you in regular language, guide you through any legal intricacies of the transaction and protect your interests throughout the whole process.

They’ll review the contract, ensure compliance with relevant laws, answer the many questions you might have and flag anything that doesn’t look right.

Review contract terms

The terms and conditions of the property contract will outline the obligations of both parties to the sale. Settlement dates, deposit amounts and any special condition are especially important factors. Your solicitor can help you wade through complex or unfamiliar terms and clauses.

Check title and condition

The property’s title and condition needs to be verified by ordering building and pest reports and strata reports where relevant.

The building report can identify any structural issues or give other insights that may affect whether the property suits your needs and where you should set your budget limit. For example, finding out the property needs $25,000 worth of work could be a catalyst to negotiating a cheaper purchase price to cover that.

Pest reports are essential for uncovering issues like termites or rodents that can not only be expensive to take care of but can also affect structural integrity.

Strata reports for apartment complexes or other strata titled residences are essential for understanding what your obligations are as an owner, including shared responsibilities and potential costs.

Zoning and regulations

Australia’s property market is subject to many restrictions and regulations, so you need to understand the zoning laws and regulations pertaining to your area.

Local councils often have specific zoning requirements that dictate how a property can be used and what you can and can’t do to it if you are looking to develop or renovate.

You could be surprised to find the home is in a flood zone or requires special asbestos removal before even minor improvements are made. Depending on your plans, a single rogue regulation could be a deal breaker.

Benefits of working with a buyer’s agent

Buyer’s agents specialise in representing your interests and have a wealth of experience in dealing with the many curveballs you can encounter on an investment journey.

An example at the contract stage is that a buyer’s agent can review building and pest reports on your behalf and then tailor what they find into the negotiating process.  They will also work closely with your solicitor to make sure the transaction is carried out properly and efficiently.

Overall, there are many other ways buyer’s agents can guide your investment journey.

First, they will have existing market research and analysis that they have gathered from researching certain areas over and over again for a period of time.

Then, they can carry out property inspections on your behalf, providing you with an evaluation of the condition, potential issues and data from an educated buyer’s perspective.

When it comes time to negotiate, they already have the market knowledge and are more likely to be taken seriously by selling agents, especially if they have bought in that market many times already.

Someone like B Invested founder Nathan Birch, for example, doesn’t need a selling agent to tell him what a property is worth in a market. He is likely to know better and that gives his clients a serious advantage at the negotiation table.

Buyer’s agents also have access to off market properties, which can mean the best deals. They have built up an extensive network and know which agents are looking to offload properties without going through the entire listing process and subsequent campaign.



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