What due diligence is required before buying property?

Hi, I'm thinking about buying my first property. I am mainly looking at units, and they seem to all be auctions.

What searches/due diligence would you recommend before buying? I have heard about building/pest reports, but is it really worth getting those every time you are interested in a property, when you might not even be winning the auction?

I know I probably sound really ignorant, but hoping someone can help me out and suggest things that I should be doing before I buy!

A strata search is what you require on a unit not a P&B which would be covered by the BC.

Here's a post I made 18 months or so back with a start of a list on some DD:
http://www.somersoft.com/forums/showthread.php?t=48346

Happy researching, Alan.

Thanks for the link. How does one do a strata search?

You can get one from the land titles office. Pay and receive it electronically, too easy.

Interested in what you mean in saying that P&B inspections would be covered by the BC?

Don't have an answer, but asking, is way better than learning from mistakes

Experimentee said:

Thanks for the link. How does one do a strata search?

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One the front page of the contract of sale, at the very bottom in a box, is the name & address of the strata management company for the unit block.

If you know what you are looking for you can book an appointment with them to inspect the strata records. This shows how they spend money on maintenance, what they propose to spend into the future, what the levies will be, what issues arise at their meetings, how much money they have in cash in the admin fund & the sinking fund, how much insurance they have and what their insurance policies cover etc.

If you don't know what you are doing (and it sounds like you don't ) then you can engage a strata search company to do this for you - it costs about $200-300 generally for a full report.

Skeetaboat said:

Interested in what you mean in saying that P&B inspections would be covered by the BC?

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When buying unit, the building externals (walls, windows, etc) is covered by the Body Corporate. Likewise it is the BCs responsibility to arrange and pay for pest control (termites etc).

Getting a P&B report on a unit is really only for the internal of the unit (the vast majority of which are double brick). So a Pest report will only tell you if the unit has cockroaches or ants for the most part (and I don't care about that as you can get it sprayed for about $150 which is cheaper than a Pest report anyway).

A Building report will only tell you if the kitchen cupboards doors close properly and the internal doors etc. I can figure that much out myself. I don't need to spend $300 on a report for that. Windows, fire doors etc are all the BCs responsibility.

If there are issues with the building itself then this will turn up in a strata search, as it will be documented at one of the BC meetings and they will be calling for reports from building consultants and so on, as well as raising a special levy to fund repairs (if there is not enough cash in the sinking fund), or initiating court actions against a building company.

You're a good guy Propertunity.

I hope they appreciate the time and effort someone with your expertise is offering for free.

Kudos.

I just came across a curley one actually specific to Queensland that i had never heard about...recent introduction to many parts of Qld.

we are building currently, requested a boundary relaxation on a small block...sounds simple enough...well hell no! paid initial council fees etc, they came back three weeks later and said no....but...we had to fill in more forms plus pay another $495 for a special hearing about our request....because of our relaxation request it triggered something call "iconic places" which Qld has............its a whole lot of garbage actually....

Be careful buying property and wanting to request a relaxation......its a total circus...six weeks later and it has just been resolved, all because of 30cm...

more info:

www.dip.qld.gov.au

Propertunity said:

If you know what you are looking for you can book an appointment with them to inspect the strata records. This shows how they spend money on maintenance, what they propose to spend into the future, what the levies will be, what issues arise at their meetings, how much money they have in cash in the admin fund & the sinking fund, how much insurance they have and what their insurance policies cover etc.

If you don't know what you are doing (and it sounds like you don't ) then you can engage a strata search company to do this for you - it costs about $200-300 generally for a full report.

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Propertunity I must thankyou for your willingness to put years of experience and knowledge on the forum for all to read. Credit to you it is invaluable info for investors still finding their feet.
I have never engaged a strata search company before but will be soon. Do they just give you an overview of the figures or do they advise you of the state of affairs according to the figures.
Also are all strata search companies the same basically or is it worth getting a referral?

Dazz said:

You're a good guy Propertunity.
I hope they appreciate the time and effort someone with your expertise is offering for free. Kudos.

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Well thank you

RickF said:

Propertunity I must thankyou for your willingness to put years of experience and knowledge on the forum for all to read. I have never engaged a strata search company before but will be soon. Do they just give you an overview of the figures or do they advise you of the state of affairs according to the figures.

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They will usually summarise on one page and then go into lots of detail on the subsequent pages. They also make comments on the 'harmony' of the building - i.e. if there are complaints / disputes etc.

RickF said:

Also are all strata search companies the same basically or is it worth getting a referral?

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I have seen the reports of a number. They basically all have to tell you the same info but they may present it in different ways. Much of a muchness I would say.