We’ve reached the culmination of our Brisbane Purchase Case Study for one of Property Zest’s clients, Luke. Before Luke became the owner of another property, there were several tasks to be done and in this part 7 of our series, we tackle the things that needed to be accomplished between signing the contract and settlement.
For those of you who just came across this part of our case study, we’ve rounded up the series for you here:
Part 2 — Setting Buying Criteria
Part 3 — Narrowing Down Locations
Part 4 — Brisbane Purchase Case Study Part 4—Location Down to Two
Part 5 — Zeroing in in North Lakes
Part 6 — Going for the’Best and Final’ Offer
One of the first conditions of Luke’s contract was a satisfactory building and pest inspection. Like we always do, we obtained quotes from several providers in the area before finally settling for a certain building inspection company.
Now you’ve seen a building and pest inspection report, haven’t you? They’re lengthy, wordy, and the ironic part of it all is that they often include so much information yet say very little of the things you need to know! That is why whenever possible, I recommend that you be present during the building and pest inspection so you will have a better understanding of the issues that the property may have and the significance of those issues.
In our case, I attended the inspection of Luke’s property and was pleased to find out that no issues are present with the property. A bonus experience was that I learnt a lot about termites, building materials and common problems found within residential dwellings in the area. Very useful information there!
The thing with SMSFs
Arranging finance can be a stressful experience for buyers as it is and when one is buying in a self managed super fund, the stress level could be higher as there’s so much paperwork to be done. That paperwork needs to be passed around and some parties may not be as cooperative or as expedient as you would like them to be!
This is not to say though that things are completely out of your control. You can do your share of expediting things by being organised and being on top of the things that needed your attention. If one party requests paperwork, don’t be the cause of delay and ensure to hand it back to the requesting party ASAP!
I was a fortunate to be Luke’s buyers agent as he was on top of every documentation request made of him and was fast in doing so. We were able to make it to our 21-day finance period without a holdup; however, the bank wasn’t able to make it to the actual settlement time so we had to extend settlement by 2 days. Those two days can be a cause of worry as vendor can charge penalty interest for those two days!
We informed the agent about Luke’s hard work getting everything accomplished everything from his end—and lucky us, the seller did not charge penalty interest.
Time to get insured
Another vital thing to do between purchase and settlement is getting insurance on the property. Once a buyer enters into a contract, he/she will be liable for that property. Should something happen to the property during the conditional period, a buyer could pull out of the contract based on one of his/her conditions; however, it is always best to get covered immediately.
In Luke’s case, after obtaining several quotes we opted for a company that he had used before for building and landlord insurance. They offered Luke a competitive price, which Luke took immediately.
We mentioned during the first part of this series that the property Luke has chosen is an ex-display house that is currently occupied by tenants who maintain the property in its display condition and who’d be happy to stay on. Dream property, eh?
While the property is currently handled by a rental manager, as a standard practice at Property Zest, we did scout for comparable quotes from other property management companies. Luke, however, decided to keep the current manager after speaking to her, just to see how things will go.
The tenants are currently on periodic lease—something that I do not recommend. While many believe that it would be easy to remove tenants on a periodic lease, that is not quite true. Such contract/setup also gives the owner little certainty over future tenancy. Luke was aware of these things and was planning to address the issue with the rental manager.
It has been mentioned several times on the blogs and on our podcast episodes here at EPI how settlement time can be pretty fast in Queensland. In Luke’s case, settlement was done two days later than first planned and now, he’s officially the owner of this immaculate ex-display house in North Lakes.
It has been another successful case study purchase. Do watch for our next post as we round up this case study in a summary video. See you then!