Due diligence in purchasing a property in Syd

Discussion in 'The Buying/Selling Process' started by Pixie, 8th Mar, 2015.

  1. Pixie

    Pixie Member

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    In such a flaming hot market in sydney, how does one do their due diligence (pest and structural inspection) when purchasing a place. Properties get snapped within one inspection opening.. Literally one days time...

    Is there anyone out here on somersoft who doesnt do inspection? Has this work out fine?
     
  2. Propertunity

    Propertunity Real Estate Buyers Agent

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    They do get snapped up within hours or a few days. That is not to say you have no time to conduct your DD. You get a 5 day cooling off period in NSW (once contracts are signed and a 0.25% deposit paid). This is plenty of time to do your DD. :)
     
  3. Biz

    Biz $17 DOLLAS YO!

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    Forget DD in this market. Just bring plenty of lube and you'll be good to go.
     
  4. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Use a BA if you're out of town & rely on their team to undertake all necessary inspections etc during the cooling off period, just worry about getting your ducks lined up.
     
  5. Hetty

    Hetty Member

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    If there are faults, do you get the deposit back? I read somewhere that you get it back bar $100 but then I've heard of others losing their money.
     
  6. Propertunity

    Propertunity Real Estate Buyers Agent

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    If you rescind the contract by exercising your cooling off rights then you forfeit the entire 0.25% deposit.
     
  7. Hetty

    Hetty Member

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    Gosh, that's a lot of money to lose if there are issues.
     
  8. Propertunity

    Propertunity Real Estate Buyers Agent

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    You need to also keep in mind that you can use reports to renegotiate the price during the cooling off period. So all need not necessarily be lost.
     
  9. Moveit

    Moveit Member

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    Propertunity, how likely is it that the price would come down during such negotiations? Just wondering what the vendor has to gain - if the buyer doesn't like the results of the building/pest inspection, then won't the vendor just say take it or leave it (and leave the 0.25%)?
     
  10. fusion9

    fusion9 Member

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    Having just lost 1.2k in DD from an auction which I won, that passed in...I was wondering the above too.
     
  11. chylld

    chylld Member

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    A property came up yesterday which I really like. Agent had clued me onto it beforehand so the listing confirmed it was what I wanted and within minutes I had a B&P inspection booked. Contract in hand as well and ready to make an offer as soon as the report comes back.

    Someone will probably still beat me to it :D
     
  12. fusion9

    fusion9 Member

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    Do people always get the B+P even for 500-600k apartments? Seems like in general it's the strata report thats key.

    Last one I did had a likely incoming 20k levy. Funny, in the contract my solicitor asked if they knew about any incoming levies and the reply was 'not to the vendors knowledge'. Except the strata report said they were present at the meeting heh.
     
  13. chylld

    chylld Member

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    I've relied on strata reports for apartments too... seems to reveal an awful amount but probably doesn't make the B&P totally redundant.

    Good catch on the upcoming levy, I had one recently too that was clearly marked in the upcoming maintenance costs schedule but when I quizzed them on it, they said "ummm no probably, umm that one you don't have to worry about. Yeah"
     
  14. Mick C

    Mick C Mortgage Broker

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    Agent simply won't even take an offer.....it's a sellers market- the agent can sell and will sell...no point dealing with a buyer over the phone or via email ( as it's a quick process and less headace to deal with a buyer that he agent has seen and is willing to sign NOW !!! like literally NOW)

    So i always suggest my clients, if your buying in Sydney- make sure you go to the inspection + try to ring the agent and try to get an inspection before that sat...OR if the agent will only open that sat ( common ) make sure you make an offer that day ( just ask the agent how his doing the offers)!
     
  15. Mick C

    Mick C Mortgage Broker

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    ^ very true....esp the building reports :)
     
  16. chylld

    chylld Member

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    I also read that if the building inspection uncovers serious faults, and you forward these on to the agent, then the agent is obliged to disclose these faults to all interested buyers. Is that true?
     
  17. Scott No Mates

    Scott No Mates ...and people wonder why?

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    That's only $2,500 on a $1,000,000 property - barely lunch money
     
  18. Pixie

    Pixie Member

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    Honestly those inspection reports means jack all in Sydney.


    So what if it reveals issues, more than likely the vendor will not reduce the sell price as there is a stream of potential buyers who is willing to take this risk...

    I ended up Getting reports done so that I know what needs to be fix when I move in rather using it as a negotiation tool....
     
  19. chylld

    chylld Member

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    They don't mean jack all then do they :) But yes I agree that a few problems on the report is going to do jack all in helping you bring the property price down as there will always be another buyer who either has not done a report, or doesn't care about / underestimates the costs of those problems.

    I see it as a buyer protection tool, not a bargaining tool. Reminds me of an open house I saw recently where a buyer complained to the agent "why is there carpet in the dining room?? why???"
     
  20. Terry_w

    Terry_w Member

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    "I" just bought a property in Sydney and here is what happened. Made offer and started finance app same day and ordered valuation. Went back and forth for a few days, finalised price. Then received contract and started negotiating terms. finalised terms after a few days. Then I did the building and pest inspection. found somethings wrong, as there always is, and negotiated the price down. They were constantly pushing to exchange, but told them had to wait till finance unconditional. Paid 5% deposit, refused to accept their special conditions about deposit being 10% in installments. Told agent I would hand deliver executed contract, but posted it to him, allowing a few extra days. Finance fully approved and then I allowed agent to exchange. Got it for under valuation price.

    I tried to negotiate terms so I could get the full 0.25% usually forfeit back if I exercised the cooling off period, but they were happy to just wait until finance was fully approved and exchanged on that basis with a 66w so no cooling off.

    There were supposdely other buyers who had requested contracts, would I like to increase my offer blah blab, but I held my ground and actually reduced my offer. All up I delayed them around 2 weeks.