Due Diligence Needed Before Buying a Property

If you have a certain property in mind that you want to purchase, are you also willing to start with the actual business of purchase; the pre-settlement inspection, the conveyancing bit, the signing of the contract of sale and so on?

As an investor you most likely would want to know all about the rental yield of the neighbourhood, the comparable sales figure, the history of capital growth, zoning restrictions (if any), among other things. You will find that it is wise to ask a few more questions as part of your sue diligence.

What is the vendor’s reason for sale?

Before buying a property, try finding out if the vendor already bought a property he wants to purchase with the proceeds of your sale. I am sure there is no better bargaining chip than this, especially if the property has passed the average time-on-market stats. It is because this would imply that the property has been resting among the listed properties for some time now and the vendor will be only too eager to sell it off.

Local council approval

You should also find out as much as you possibly can about the local council approvals before buying a property. For instance, was there a load-bearing wall that the owner blew off thus inviting the council’s wrath? In such cases, you may find yourself seeking “denied approvals” from the council at a handsome cost on a later day. Talking on it, I must confess that knowing all that is worth knowing about encumbrances and easements are a must, too.

Undisclosed lease

Try probing the vendor, his agent, the property manager or the letting agent if there is a case of undisclosed lease. I mean I have fought for clients who were duped with a farce contract of sale that showed vacant possession even as the lease document clearly showed a fixed term lease (unexpired).

These are just a few among many things that can go wrong if the vendor has got delinquent intentions. The old proverb rings true- better safe than sorry!

At Caputo Lawyers, we can deftly take up cases where you have suffered from farce contract of sale or have been duped by the vendor. Fee free to get in touch with us here.