Dooley Blog

A recent article in the Sydney Morning Herald discussed a bank’s recent practice of ‘blacklisting’ certain buildings on which they refuse to lend finance. This means that whilst you have a pre-approval to borrow a specific amount, the bank may later not agree to lend you any money if your ‘perfect place’ happens to be on their blacklist. There are several reasons why a property might end up on a bank’s blacklist, which may change from time to time.

This highlights the importance to ensure that you seek legal advice on your Contract before you sign and have the agent exchange the Contracts to ensure that the appropriate conditions are added to the Contract and so that you have time to obtain an unconditional loan approval from your bank to be certain that you will have the money to complete your intended purchase.

If you are worried about missing out on the property, at worst, you should ensure that when the real estate agent exchanges the contract that you have not waived any cooling off period. This will ensure that you have time to confirm with the bank that they will lend you the money you require to purchase the property. If you are purchasing a property at auction, it is important that you are aware that there is no cooling off period therefore, unless you have previously obtained legal advice and negotiated with the Vendor for the Contract to be ‘subject to finance’, you will be bound to purchase the property whether or not the bank lends you the money.

Spending the time upfront could save you tens of thousands of dollars in lost deposits if you fail to complete a purchase because a bank refuses to lend you the money.

If you would like to discuss your proposed purchase, please contact us.

For most people purchasing a home is the single largest expenditure that they will make during their lifetime. For the average person the purchase of a property is a lifelong aspiration and usually involves a long term debt; yet most purchasers are happy to take a gamble when making their purchase by saving on the smaller yet some of the most crucial items involved in the purchase process.

In Sydney the average purchaser will spend over $500,000 purchasing a home for themselves and their family. Yet we often find that they will try and cut corners and save costs on simple, cost effective and highly important aspects of the purchase.

Of course it goes without saying that due to the complex and significant nature of purchasing a property we always recommend a competent lawyer is used to represent you in the transaction. The cost of a lawyer, is minimal and highly valuable say, compared to the cost of losing your 10% deposit.

We also often find that purchasers are hesitant to pay for important searches and inspections relating to the property. Many people will take the gamble in purchasing a property without paying for an inspector to complete a pest and building inspection (or in the case of strata purchase, a strata inspection). They do not want to pay the extra ~$500 involved in ensuring that the purchase of this major assest is of sound quality.

It is such a risky gamble to spend so much money on a home for you and your family and not complete the basic essentials in investigating exactly what you are paying for.

Most properties will have some sort of fault or require some rectification works to be completed. No property is perfect – even a property that is less than 6 years old. It is always best to discover what this fault may be from the outset so that no nasty surprises come your way down the track and so that you know that you are paying for the actual value of the property and not for a property which may require thousands of dollars in rectification works.

Discovering problems with the property you are purchasing before you enter into the contract may also give you bargaining power do negotiate a better price or at the very least will inform you as to the actual total cost of your purchase.

Understandably, some people who have been attempting to purchase a property without success may find this a very costly procedure in conducting inspections over each failed purchase. To try and minimize your costs it is a good idea to try and discover if an inspection was conducted over the property recently by another potential purchaser or if the home owner has an existing inspection report. Further to this you may be able to find out the name of the agency who organized previous inspections and see if you can source an updated report at a reduced price.

Our Property team would be pleased to help you by providing guidance and information on your purchase. Please contact our Property team or call us on 9890 4755  for peace of mind.