Five home buying traps a conveyancer can help you avoid
I had the opportunity last week to meet with 30 or more conveyancing lawyers at a conference in Brisbane. Most homebuyers (me included) seem to ignore conveyancing until after we have put in an offer (or signed a contract) on a property.
The reality is, the Conveyancer is your legal representative that makes sure you don’t fall into an expensive or disastrous trap. Potentially blowing your money, getting less than you expected or some other problem.
Here are 5 potentially disastrous reasons why you need a conveyancer to help you before buying:
1 - If you have used the “wrong” entity to buy the contract.
Should you sign jointly with your partner? use a trust? A company? Or use your superannuation? Getting this wrong can have massive tax implications, and can put your assets at risk. At the very least you are going to have to re-do the contract and pay contract stamp duties and legal fees twice.
2 - You have signed a contract with no due-diligence clause
Let me guess, you have seen the house twice or maybe 3 times. What type of title is it under? Is the block surveyed? Are there easements, major pipelines or powerlines through the block? Is the property heritage protected? Are there intolerable noise issues or security risks at the property?
A due diligence clause gives you time to investigate these issues and if you find something serious enough, you can get out with only a small penalty and with your deposit. In Queensland, many agents will provide a contract without a DD clause. You conveyancer can make sure this is included, and with the appropriate wording and duration so it will work.
3 - You have gone unconditional on a property at auction
This is quite common – especially in Queensland. It is part of the reason why there are so few auctions and also why the clearance rates in QLD are so much lower than the rest of Australia. Being blunt, if you haven’t done a building inspection, haven’t properly checked the title and other issues you are crazy to be bidding.
Odds are if the property is at unconditional auction there is likely to be a major problem. Your conveyancer can help you do the necessary checks before the auction. It may seem expensive and a likely waste to do this before you bid – but with clearance rates below 50% in QLD, you actually have a pretty good chance of picking up the property if you do decide to bid.
4 - You haven’t properly itemised what is in the contract of sale
Houses come with a lot of “stuff”. Did you assume the shed was part of the contract? Are the boundaries of the land clear? Solar panels on the roof? Are things like power, pool, plumbing etc.. actually working? Will the owner clean up the property? Will there be tenants or is the property vacant?
If the contract is signed, your conveyancer can do little to help you deal with these issues. You may get less than you anticipated, and may have a whole bunch of costs that you didn’t expect.
5 - A previous owner has made unapproved changes
Guess what? Once you have signed unconditionally, these unapproved changes are all yours. This can prevent you from doing further renovations. The council may require you to remove the changes (at your cost). Parts of your property may even be deemed unfit for use.
A conveyancer can help you ensure that any modifications to the property have been properly approved. If they have not, then the onus can be put on the seller to resolve these issues at their cost.
In the struggle that is buying a house, we all tend to focus on the exciting part of finding a property and “wish” that the boring legal stuff is just quickly resolved by our conveyancer. And I have personally done the wrong thing by leaving the legal/conveyancing to the last step. Queensland has some of the weakest buyer protections in Australia – so if you make a mistake, there is little you can do to get out of it.
In reality, your conveyancer is a partner in the buying process. Engage one before you start seriously looking. Meet with them and let them explain the buying process and how to avoid the traps.
Having spent the last few days surrounded by Conveyancing Lawyers – I was completely impressed at how much they want to help homebuyers to get the right outcome.