6 Signs You Should Pull The Pin On Your Purchase
When I was buying my first house, I was presented with all sorts of obstacles.
Finance extensions, a seller who initially refused to sign the Contract, a tonne of criticism from so called “friends” and last but certainly not least, a building and pest report that showed there were active termites on the property.
TALK ABOUT DRAMA!
NO WONDER FIRST HOME BUYERS ARE SCEPTICAL OF BUYING ANOTHER PROPERTY WHEN THEY HAVE TO DEAL WITH STUFF LIKE THIS STRAIGHT OFF THE CUFF!
But for the record, I didn’t cancel the Contract like you’re probably thinking.
You see, I’ve learnt over the many years of buying and selling property that there are times when you CANCEL, and there are times when you CONTINUE.
LET ME EXPLAIN.
A novice buyer would have probably freaked out and pulled the pin at the point of termites but it was lucky for me that at the time, I had some very experienced advisors around me who explained why it wasn’t such a big deal and why I needed to move forward.
AND LUCKY THEY DID, BECAUSE IN 18 MONTHS, THE PROPERTY'S VALUE HAD RISEN BY $120,000.
When you’re buying, there are certain things that can happen and certain circumstances where you definitely should pull the pin on the contract.
I’LL IDENTIFY 6 HERE.
1. The property is valued SIGNIFICANTLY LOWER than the agreed purchase price.
2. You’re stretching beyond your means to get finance because of a low valuation.
3. There has been a SIGNIFICANT amount of damage caused by termites that has corrupted the integrity of the structure of the building, to the point of beyond repair or beyond how much work YOU want to put in.
4. There are LARGE structural defects to the building or a major structure attached to the property, like a pool.
5. The body corporate records have been misrepresented SIGNIFICANTLY and / or a search reveals extensive and ongoing issues within the body corporate.
6. You discover there is an issue with the Title. eg. a Caveat has been placed over the property.
Some of these CAN be worked through and re-negotiated but my overall advice would be to terminate and find another property.
Realistically the fall-out is too much for most people to work through when it comes to these kinds of matters.
You’ll notice I’ve repeated the word SIGNIFICANT several times and the reason for this is that unless the problem is big enough, most things that crop up during the buying process can typically be overcome with the right negotiations.
BUILDING AND PEST INSPECTIONS ARE ONE OF THE BIGGEST DEBATED AREAS WHEN IT COMES TO BUYERS CANCELLING CONTRACTS.
Issues that appear significant to first home buyers and novice investors are usually overlooked or massaged by more experienced investors.
This is where you need to rely on the advice of a trusted professional like a Buyer’s Agent or experienced investment expert for strategies to overcome such obstacles.
OTHERWISE, THE WRONG CALL COULD COST YOU IN THE LONG RUN. JUST LIKE I WOULD HAVE LOST OUT $120,000 IF I'D MADE THE DECISION TO TERMINATE MY PURCHASE.
Turns out the termite activity was only in a certain section of the property, and the minimal amount of damage was able to be fixed once the termites were eradicated.
It was never a problem again.
IT WAS REALLY ABOUT ME GETTING OVER MY FEAR OF THE SHOCK FACTOR ASSOCIATED WITH BRINGING THE WORDS TERMITES AND PROPERTY TOGETHER.
If you're buying for the first time, or even perhaps the next time, you need to learn to recognise when you’re acting out of fear, rather than rationale.