5 Legal Questions To Ask When You've Decided To Buy A Property
Here’s a good article written by LawPath for our clients.
There’s a reason why buying a property is seen as one of life’s milestones - because it’s one of the most important decisions you’ll make. After you’ve decided to buy a property, there are certain things you should be aware of, and important legal questions you should ask yourself to get organised before settlement day arrives.
Read on to find out what questions you should be asking so that your purchase is successful and well-planned.
1. What is my price range?
Before you even start looking for a property to buy, you should discern what kind of budget you’re looking at. It is important that you understand the impact that a buying a property will have on your income and general financial position. Property is not cheap, and this is one investment where you will have to calculate your financial capabilities down to the cent. A good way to determine what price range you’re looking at beyond your finances and what you’re willing to spend is observing the property market. What are the average prices? Are there any areas where there is more value for money than others? Property prices can no doubt be hard to predict, but there are always particular areas that are booming and will be worth a lot more than their current listing price in a few years. This is a particularly important thing to look at if you’re purchasing your property as an investment, rather than a personal residence.
2. How will I fund the purchase?
Financing a property is no easy feat. A lot of people don’t just have the money lying around to buy a property, which is where a mortgage comes in to fill the gaps. It is standard that upon settlement, a deposit is paid which is 10% of the sale amount. After this, a mortgage is normally paid in monthly installments. Be sure to check the interest rate and conditions of the loan, compare different mortgages, and find one that suits your particular circumstances. It is also important that you understand your obligations under a mortgage - what you are expected to pay and what will happen if it falls into arrears.
3. Who will my conveyancer be?
Start doing your research on conveyancerswho not only will undertake your sale at a reasonable price, but also efficiently. Make sure you find a conveyancer who has expertise in the property laws of your State, and understands the process back to front. It is also a good idea to get a breakdown of the fees you will have to pay, whether this be an hourly rate or fixed price. The solicitor you choose will have the entire property settlement in their hands - so be sure to choose the right one.
4. What Insurance will I need?
Even before you move into a property, it is important that you have insurance to protect you if anything happens. Legal responsibility for a propertytechnically only comes into effect after settlement, however, it is recommended that you purchase insurance as soon as the contracts are exchanged. Determine what insurance suits you best. Common insurance needed is house and contents insurance, building insurance, public liability insurance and others depending on the property you intend to purchase and what you will be using it for.
5. How will I make sure the property is in the condition I expect it to be upon settlement?
Plan so that you can make adequate inspections of the property before settlement. Firstly, check, recheck and triple check the contract to make sure the information accurately reflects the property that you think you’re buying. After this, plan to have at least 3 inspections, 1 prior to purchase, 1 after purchase, and one in the days leading up to settlement. These are all important as one will show you what you’re looking at buying, the second what you’ve just bought and the third, what you’re going to have legal title in. Sometimes, certain issues with a property are not disclosed by the sellers, and are only discovered after settlement. Post-settlement, any faults you find can be hard to question, let alone undo. Purchasing a property is one such area where buyers remorse won’t help you.
Purchasing a property is no doubt exciting, but it’s also a process where you need to be vigilant every step of the way - even as early as deciding to buy a property in the first place.
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