When buying a property, many people believe the hard work is done once you’ve signed the contract to purchase. Unfortunately, there are still many hurdles to negotiate before you are handed the keys to your new property.
You may already have your conveyancing to-do list, however here are five common mistakes that we have come across that buyer’s often do not think about:
1. Stamp Duty
“It should only be about $200 to cover this, we’ll be right…”
Wrong! We often come across people (the majority are first home buyers) that severely underestimate the cost of stamp duty. This amount changes depending on the property value and other circumstances. Before committing to a property, contact your Solicitor to ensure that you are provided with an accurate estimate!
We have done a couple of example purchase scenarios and the amount of these stamp duties and the additional costs are below:
- Mary and Bob are buying a house in Brisbane valued at $550,000. Mary is a first home buyer but Bob has owned an investment unit before. Both Mary and Bob intend on living in this property as their place of residence. Their stamp duty would be $10,600.
- Brett and Glen are buying a property in Townsville for $330,000. It will be an investment property as they are intending on fixing it up and flipping it. Their stamp duty will be $9,975.
2. Pets
“Fluffy is going to love his new home!”
Don’t get too excited about taking your pet with you to your new property until you have read the Body Corporate By-Laws. When completing searches, we are often finding that Bodies Corporate are including a by-law to exclude pets on the property without approval. Make sure that if you intend on taking your pet with you to the new place that you speak with your Solicitor to ensure that the appropriate approvals are sought before you purchase.
From our experience, certain breeds and sizes of dogs are easier to get approvals for so if you have a medium to large dog it is best you look into getting these approvals sooner rather than later to ensure the approvals are finalised before you settle.
3. Council Approval
“I’m pretty sure the pool has been approved?”
Before purchasing the property, make sure any additions or fixtures to the property have been approved by Council. The last thing you want to happen is for you to have to pay for Council approval only to find out that you will be responsible for taking it down as it is not compliant.
BTLawyers previously acted for a couple that had recently purchased their dream home with a beautiful deck out the back. Unfortunately for them, the deck was not approved and built over a council drainage easement. They had to modify the deck before it received approval to ensure it did not conflict with the drainage easement. This process was very costly and took close to 6 months to finalise.
4. Building and Pest
“We don’t really need to pay for that building and pest report do we?”
Unless you are a building and pest contractor, the answer should always be YES. A building and pest report is something that we believe is necessary for all purchases as it gives a report on the property including fixtures and additions that require council approval. The last thing you want is to find out that your property is actually placed on a sink hole right after you’ve settled. There may even be an opportunity to re-negotiate a purchase price or have issues with a property rectified before settlement if a building and pest report shows defects.
5. Insurance
“But I thought you had this covered?”
REMEMBER – insurance is on you as the buyer from 5:00pm the date after the contract is signed. Ensure that you have this sorted as soon as possible to avoid the house going up in flames… followed by your bank account going up in flames!
Worried about buying a house? Give us an obligation free call on 07 3211 2233 or visit www.btlawyers.com.au.
BTLawyers – Brilliant Thinking, better outcomes.
