Happy New Year!
2021 promises to be a big year as the Melbourne market looks to put the year of COVID19 behind it.
But whilst 2020 had its obvious frustrations, particularly those looking to find their dream property and those holding off selling due to the unfavourable conditions, 2021 might just provide the perfect storm for a both sides of the buying and selling coin.
Some buyers will have used the extra time to save up larger deposits, particularly if they were able to maintain stable employment and found a reduction in other expenses, such as eating out and reducing debt, particularly credit card debt.
On the flip side, potential vendors an their agents may now be thinking about timing their sales to ensure they are not part of a flood of stock on the market.
There are plenty of reasons to be excited about participating in the property market in 2021, but before you jump in, here are five things (three for purchasers and two for vendors) you should consider before diving in.
Advice for vendors selling property in 2021
1. Ensure you conduct new searches and update your Section 32 before sending out a contract of sale
It might be true for many vendors that contracts of sale and section 32s (AKA Vendor’s Statements) were drawn up as part of a plan to sell in 2020.
Whilst it is tempting to use the contracts you previously obtained, it is always recommended that all relevant searches are conducted, and a fresh Vendor’s Statement is produced for attachment to the Contract of Sale.
For example, if the property you are selling is part of an Owners Corporation (formerly known as Body Corporate), annual fees may have changed as a result of the Annual General Meeting, or a special levy may have been raised by the committee.
These all need to be disclosed in the Vendor’s Statement and may be missed if a new Owners Corporation Certificate is not requested.
The same is true of council rates and other potential outgoings on the property which may have changed.
2. Ensure you review special conditions, particularly around finance
Aside from the need to update the Section 32 of any contract that was prepared in advance of a sale that did not go ahead, it is advised that any special conditions in the contact be reviewed.
If your circumstances have changed and you require a shorter settlement, or if you have new requirements around whether or not the sale can be made subject to finance, for example, then it’s important a new Contract of Sale is drawn up to reflect these changes.
Whilst this does generate extra expense, it is a small price to pay to ensure you and your rights are protected before proceeding with any sale.
Advice for purchasers buying property in 2021
3. Build a team of experienced professionals
Buying property is a big deal.
Whether its your first or your 10th, you should always seek the guidance of trusted professionals when purchasing property.
This isn’t a shameless plug for conveyancers, either.
It takes a team of experienced professionals to truly make the dream work.
You should consider having the following on your “property team”:
- A trusted and reliable mortgage broker
- An experienced accountant
- A buyers advocate who understands the market
- An expert conveyancer
4. Check when the contract was drafted
Just as it is advised that vendors should update their Vendor Statements and Contracts of Sales, it is equally important that potential purchasers do not make assumptions about the Contract of Sale and its contents.
Check the Vendor’s Statement (Section 32) to see when the searches were conducted and make sure they are up to date.
If they are not seek advice immediately.
5. Pre-purchase review
This ensures you have a complete understanding of the contents of the contract BEFORE you sign, but also helps to ensure you have clarity on what is possible with the property.
For example, if you are looking at a property as a potential development project, you need to ensure there are no covenants stopping you from knocking down the house and building two or more units.
It is important that when you engage a conveyancer in Melbourne to conduct a pre-purchase review of the contract you tell that conveyancer what you plan to do with the property.
Are you hoping to build an extension? A deck? Install a pool?
Any of these sorts of works might be prohibited if there are restrictions on the title to the property.
If you’re looking at these sorts of works, a pre-purchase review is the first step to ensuring you will be able to do what you want to do with the property. If a pre-purchase review does not answer all the questions you have, then you may be referred to another expert, such as a town planner or land surveyor for example.
Other common things to look out for pre-purchase include:
- unfair special conditions and default clauses
- correct completion of the particulars of sale
- finance condition
- settlement terms
- vacant possession v subject to lease
- outgoings including land tax
- special levies
- building permits, final approvals, and warranty insurance
- owners corporation
- title encumbrances
- works in surrounding areas
Tick Box Conveyancing’s pre-purchase contract reviews can shine a light on these issues and provide you with a plain-English report on what to consider and what steps to take next.
In the process of negotiating for the purchase of any property, Tick Box can represent you in seeking alterations to the proposed contract or any of the conditions contained within it.
Even if you do not require conveyancing services straight away, we may be able to help with a referral to one of our trusted partners.