Tomorrow I will finally be settling on a property that we bought in country vic. It's been alot of work to get to this point. We offered substantially less than the listing price, and ended up getting it – Yay. However, I learnt a very valuable lesson.
On the day that I signed the contract, I had a look at the property (owner occupied, fully furnished and lived in) and went ahead. When I say look, I mean walked around the house, looked out the windows, opened a few wardrobes – nothing intrusive! Geez, it's not my house and I wasn't even comfortable nosing around as much as I did. Now, I was under the impression that I would do an inspection prior to settlement – once it was vacated, and use the information gathered from that to negotiate a reduction in the price, or an amount to be held for cleaning, repairs etc.
Seems that I was mistaken. I did an inspection last week – and there are quite a few hidden problems – nothing major so far though. For example, a majority of the blinds won't open/close, kitchen is pretty grubby, there is a huge scratch on the tiles (there was a rug on top of them), the carpets are pretty filthy (furniture was on top of these), keys for locks were missing. Not to mention, I've not yet checked the appliances to see if they are working (the electricity had been switched off when I did the final inspection).
I reported all of these issues to my solicitor, and it turns out that it's just 'too bad'. The condition that it was in on the day I signed the contract, is the condition that it was sold in – and there isn't anything I can do other than have an amount withheld for which an arbitrator will distribute for repairs etc as they see fit. The vendor won't budge on it.
I think that this means, next time I buy a property, I will have the vendor or estate agent move furniture around, turn on dishwashers, start up the ducted vacuuming, open all the cupboards, and anything else that I can think of BEFORE I sign anything.
I know that I can't complain too much – I did get it for a bargain, but I really didn't expect to have to fork out a likely 1 – 2k in clean up, repairs and general maintenance when, on the face of it, it was presented so well.
I'd really love to know what experiences/lessons/advice others who have done this a few times might have for me. Don't hold back from telling me that I'm expecting too much if that is indeed the case
Thanks,
Amanda.That's normal. You don't go thru every drawers/windows/locks/power point before you move in. Even if you bring it up before signing it's unlikely the owner will care to fix them for you unless they are really desperate to sell and you want to stipulate into the contract. But in that case it's easier to just bargain another $1-2k or so… but really it's getting small minded.
Cut people some slack – you already bought it at bargain price…
i tend to agree with the previous poster.
you said you paid less than the property was worth. why would the vendor want to assist you further.
good luck with your purchase.
just out of interest why did the vendor sell for less than it was worth?
regards.Real estate purcahsing is still buyer beware
Even if you didn't buy the property at a bargain price, there is still nothing you can do. Your solicitor is right – what you sign up to buy is what you get. If some of those things happened between the time you signed the contract and the date of settlement, then you would have some recourse, but you have no evidence of that.
I wouldn't even bother with an arbitrator. You will just end up forking out more money for a hearing that you won't win.
You are right. It is a valuable lesson. Buying a property is the most expensive item you will ever buy. If you buy a car you take it for a test drive and check that everything is working. Why wouldn't you do the same for a house? You are very fortunate that it is only small issues costing $1 – $2,000. Consider it a relatively inexpensive learing experience and perhaps start a checklist for the next property you buy. Write down everything that you think you should check in a potential property. That way, if there are any problems, you can negotiate repairs/cheaper price, BEFORE you sign a contract. Also, documenting issues will help if damage occurs between signing of contract and settlement.
Cheers
K
The price you paid sounds like it reflected (or grossly over reflected) the condition of the property. As Linar points out, there is little you can do after you have signed the contract other than to ensure that what you have contracted to buy is delivered eg that the curtains as inspected are still in the house, that the stove is still in the same condition eg not working etc.
If you haven't undertaken to get a building/pest inspection then you must do all that the building inspector would have done on your behalf – check the structure (where accessible), check for termites, make sure electrics/taps work, doors aren't binding, holes in walls/floors/ceilings etc as well as taking many pictures.
Thanks to everyone for their input. I am pleased to say that I was clever enough to have Pest and Building inspections done, and include a clause for them in the contract.
In response to Pully above, it turns out that the vendor had defaulted on their mortgage, so it was kind of like a fire sale I guess. I found out about it when settlement was delayed, and it was because the bank had referred this mortgage to the Collections Department (or something along those lines).
Beware of standard building inspections. I know that in some states (NT for one) all a building inspection does is check that the building complies with Council requirements. It doesn't check that things are in working order, quality of the build, salt damp etc. I also recommend that you get your building and pest inspection clauses written up by your solicitor/conveyancer. I have recently seen some pest inspection clauses restrict the getting out clause to evidence of "major" damage. This means that if the place is crawling with termites but they haven't yet caused "major" damage, you can't get out of the contract and you can't force the vendor to spray. The cost of doing that will be borne by the purchaser.
Buying and selling property is a tricky business. I have been doing it for quite a while and even I got rapped over the knuckles by my conveyancer the other day for having some clumsy wording in a contract that prevented me from claiming default interest when the purchaser was dragging his heels.
My advice is to surround yourself with the best people, the best conveyancers, property managers, tradies etc. And if you ever want to venture into development, make sure that the town planners at the local Council are your friends. One upon a time I was a lawyer and the best advice I ever got was to remember that the most important people in the Courts are the Court Registry staff. I saw them make life hell for solicitors who were rude and dismissive towards them. Same goes with local Councils.
I hope all goes well with the inspections.
K
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