Buyer Beware – Hidden Traps that are Easy to Miss

May 25, 2018
building inspector and buyer looking at new property

Buyer Beware – Hidden Traps that are Easy to Miss

An oft quoted phrase, “buyers beware”, is often applied to property transactions. The reason is that the rules when it comes to real estate, heavily favour vendors and vendor rights. As a buyer, this means you have to take precautions and be proactive and knowledgeable in order to protect your own interests.

It seems like common sense, but a shocking amount of people buy property in an impulsive fashion. In fact, more than one in ten properties sold at auction are bought by people who saw that property for the first time that day. This kind of attitude is extremely risky and you can find yourself spending thousands on hidden fees and fixing hidden problems the property has.

It’s essential to go into any property transaction fully informed and with a solid strategy. Here are some key tools and considerations to avoid the hidden property traps too many buyers find themselves in.

Property Inspections

From dry rot and rising damp to electrical faults and roof leaks there are a variety of potential problems that can plague a property you are considering buying that may be difficult to diagnose at first glance. That crack could be minor or it could mean the whole foundations are failing. If there have been extensions of renovations completed without the right permits, it may be your responsibility.

It’s easy to get carried away and focus on the positives when looking at a property for the first time. You’re more focused on the style, layout, design features and the possibilities it presents. It’s only later down the track that you realise the host of nasty problems that can exist.

The only sure way to evaluate the any issues a building has is to get a property inspection completed. This involves an expert investigating and detailing every problem and potential issue with the structure, what needs to be down to fix it and how much it will cost.

Land Surveys

Buyers might also want to consider getting a land survey completed, especially for older properties or few new homes built on land in an established suburb that has been subdivided. This is in case any boundaries have moved over time accidentally or intentionally or have been inaccurately measured.

Don’t assume that what you see is what you get. Plenty of property owners erect fences or walls through casual agreements with neighbours and without demarcating a property’s boundaries.

Hidden Costs

There’s much more to financing a property purchase than mortgage deposits and repayments.  Make sure you are aware of all the costs you’ll face and have the appropriate financing for it. Many buyers, especially first home buyers, can get caught out by the various hidden costs.

These include:

  • Stamp duty, which will vary in cost depending on the property value, what it’s being used for and whether you’re eligible for concessions or exemptions.
  • Lenders mortgage insurance, if you are borrowing more than 80 per cent of the property’s asking price.
  • Legal/conveyancing fees
  • Independent home valuation
  • A property inspection and strata report
  • Council rates and strata fees from settlement

According to the Housing Industry Association, the typical stamp duty bill accounts for about five per cent of a property purchase, with the average Victorian paying $24,100 in stamp duty. Meanwhile the other costs listed above can account for thousands more.

Need Conveyancing Services in Victoria?

If you need assistance with property conveyancing in Melbourne or property law advice in Victoria, talk to the experienced team at Just Conveyancing. Contact us online or call us on (03) 8580 2276 today.

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