Buying a home or investment property will probably be the most expensive thing you ever do. It is important to understand what is involved in the process. Consider the following before you commit to buy.
Doing your own conveyancing is risky. You can't get the same insurance available to a licensed conveyancer or solicitor. If you make a mistake, and suffer loss as a result, you will be unable to get financial compensation. If you use a solicitor or conveyancer and suffer loss as a result of their negligence, you may be able to take action against them.
Get your own independent financial advice about insurance, getting a mortgage and the fees you are likely to have to pay. It is illegal for real estate agents to give financial advice.
There are tools and information available to help you. MoneySmart has mortgage and other calculators.
Be sure the property you are buying is what you want. ‘Cooling off’ periods for residential property sales are not recognised in Tasmanian legislation. Also, there is no legal obligation for a purchaser to disclose defects in the quality of the property for sale. This is known as vendor disclosure. Asking the right questions could save you money and trouble. “Buyer beware” is the position you should take.
Some properties might have significant faults that lead to major repair costs. Without a pre-purchase inspection, this information might be unknown to purchasers. Some contracts allow for negotiation on the price or to get out of a contract if there are substantial repairs required. A qualified building inspector, surveyor or architect will determine if there are any:
A consumer can ask the Council if it there are any relevant records in relation to the property for sale. A Land Information Certificate (often called a 337 Certificate) can reveal:
There is a fee of around $200 for this search (Hobart City Council, November 2016).
Other searches are usually started after a contract has been signed unless legal advice recommends otherwise.
The Tasmanian Law Society and the Real Estate Institute of Tasmania publish a standard form contract. This type of contract is used for the majority of property sales in this state. Standard sale contracts contain limited ‘get out’ clauses. The most common ones are conditions to get finance and building inspection clauses.
Consumer can take some simple steps to see if there are restrictions or obligations involved when buying residential property. Make sure you read and understand all the terms, conditions and 'fine print' before you sign a contract. Keep a copy of all documents you sign.
There are strict rules about how an auction is conducted when selling a property. Those rules as well as an Auction Information Statement must be on display before and during an auction. The Statement sets out the law relating to auctions in Tasmania. Property being sold at auction cannot be made subject to conditions, such as finance. Also there is no cooling off period.
More information about buying and selling property is available from the Real Estate Institute of Tasmania.
The Tasmanian Government has supported the Law Society of Tasmania and the Real Estate Institute of Tasmania in a recent review process of the standard form contract. Vendor disclosure and cooling off periods have been added as an option for purchasers and vendors to use in the contract for the sale of residential property. This contract will be released in early 2017.
More information and/or complaints about property agents is available from the Property Agents Board - Tasmania