Buying a Home

The role of a land (Real Estate) agent

Land agents (also known as real estate agents) represent the vendor (the seller). Typically, the real estate agent’s role is to obtain the best possible price for their vendor. While the agent ultimately represents the vendor’s best interest, a good real estate agent is generally expected to treat each buyer fairly.

The contract of sale

Any agreement for the sale and purchase of land must be in writing. This is a legal requirement. In South Australia, there are three (3) dominant standard form contracts provided by the Real Estate Institute of South Australia, Society of Auctioneers and Appraisers (SA) and the Law Society of South Australia. Each standard form contract shares common particulars while also other distinct conditions different to their counterparts.  While it is true that most contracts in South Australia are standard form contracts, it is still important to have it checked by a qualified professional (i.e. a licensed conveyancer or a solicitor) as they possess special knowledge about real estate contracts. This ‘special knowledge’ can help detect any insertion or deletion of a standard term. 

Amongst other things, standard form contracts generally share the following particulars

• the full names and addresses of all parties (the vendor and the purchaser)
• the exact description of the land being sold
• the details of all included and excluded chattels (i.e. fixtures and fittings)
• the purchase price
• the deposit amount
• the settlement date

Special conditions

To make a contract of sale conditional upon an event (or set of events), special conditions are incorporated and are in addition to the general conditions of the standard form contract. Common examples of special conditions are:

• Subject to finance
• Subject to sale and settlement of purchaser’s property
• Subject to building & pest inspection

When a special condition is not met, and provided that is has been drafted correctly by a qualified conveyancer or solicitor, the purchaser can generally cancel the contract or request for an extension of time. If a contract is terminated pursuant to a special condition, the vendor must return the deposit back to the purchaser.

What to do before signing a contract (or at least prior to the expiration of your cooling-off period)

Whilst you are searching for your new home, you may find the one. You might fall in love with this home at first sight. But, as they say, “don’t judge a book by its cover”. Unfortunately, our eyes can trick us from time to time, and a professional building inspector may become handy during your shopping phase. We usually look through the home and fall in love with what we see, however, a sound buyer will always ensure that the building is inspected for structural & pest issues before entering into an unconditional contract.

As for the contract and Form 1 (vendor’s statement), they mostly outline and comprise of information relating to the land itself, and not always the improvements (e.g. the dwelling or home) on the land. Your conveyancer or solicitor does not have access to visually inspect the property and the scope is usually limited to reviewing the documentations received via email (or post).

A Building & Pest Inspector typically charges between $500-800 to carry out an inspection. We recommend looking through Google to see which inspector suits your needs.

What to consider before buying an apartment or unit

Before considering purchasing an apartment or a unit, an astute buyer will make sure that they understand the operations and finances of the strata/community corporation. In the Form 1, you will find a copy of the community/strata corporation searches. These searches can be very informative and generally, they must provide the following information:

• How much money must be paid for the maintenance, management and upkeep of the common (shared) areas.
• Arrears/debt owing to the community/strata corporation for the unit being purchase (if there are any).
• Assets and liabilities of the corporation.
• Details of any significant expenses incurred or about to be incurred by the corporation (i.e. replacing a lift or paint).
• Copies of minutes of (annual) general meetings by the committee (also known as the AGM) for the last 2 years.
• Statements of accounts and financial records of the corporation.
• Articles or by-laws of the corporation currently in force.
• Current insurance policies (for the common/shared area).

Before purchasing a unit or lot, consider the following:

1. Have I received independent advice or a second opinion on the documents relating to the corporation?
2. How are disputes resolved within the corporation (remember: you don’t know who your neighbours will be)
3. What are the rules about having visitors and parking?
4. Are there any arrears on my proposed unit or lot?
5. How do the contributions and other charges compare with other (similar) corporations?
6. Are there any reserve funds (i.e. sinking fund) for emergency expenses and major maintenance costs such as painting? If not, why?
7. Is the unit accessible?
8. What maintenance services are provided? What are the charges for these? 
9. What are the restrictions on the use of my unit/lot and the common property?
10. Can I store my caravan/boat or bicycle?
11. Is my pet permitted to live with me?
12. Do I need to contribute to any major expenditures? (also known as special levies)
13. Are there any structural problems in the building?
14.  Upon perusing the plan, does the actual boundaries match with the boundaries shown on the plans?