Section 32's

[Philzsay]

I am planning on buying property for the first time in my life!

Now I have started to recieve Section 32's for the couple of properties I have expressed an interest in. I was wondering whether anyone had any advice on things beside the obvious to look out for?

I am starting to get my head around words like 'encumbrances', 'easements' and 'caveats'...gee its like learning a new language...

I read through these documents with a fine tooth comb, as if i'm a lawyer, but obviously I'm not. Anyone have any suggestions about possible 'red flags'? Anyone ever come across a major problem with their property purchase, which they could have avoided if they went over the sec 32 better? I'm just trying to learn from others mistakes!!!

 

[Leper]

Now I have started to recieve Section 32's for the couple of properties I have expressed an interest in. I was wondering whether anyone had any advice on things beside the obvious to look out for?

The bit that's the most fun is not the legal side in my view (you pay your solicitor to deal with that), it's dealing with estate agents and learning how to read through their BS.

For example, if they tell you they have a higher offer and the owner will sign if you go $1,000 over that, ask them to show you that offer, which must be in the form of a signed S32. 99 times out of 100 they will be just bluffing you.

One agent I purchased through once actually worked for me more than his clinet (the owner). I offered $633k, but he had me write $620k on the contract, then cross it out and write my (higher) real offer so the owner would think the agent had done the hard yards to extract another $13k out of me. The owner accepted and I was a happy chappy, but the agent was not doing the right thing by his client as I was prepared to pay $640k.

I dunno what got me onto that, but I could write a book on these shonks.

 

[FIGJAM]

If anything, I'd be less worried about the legal side of things, than I would be the condition of improvements. If it wasn't blatantly newish and in good nick and with a concrete floor, I'd always get a building report. Especially if an older period style, they will pick up stuff that you wouldn't possibly know (they do go OTT sometimes, but it's better to know than not).

Very rarely have I come accross whacky easements which cut accross properties which would adversely affect their marketability. More often than not you have a sewerage and drainage easement running accross the rear boundary and that's about it. Just check the Title Plan. It's fairly self explanatory.

Caveats won't bother you, as they will be cleared by the current owner prior to handover. They're simply charges against the current owner's property, and you will probably get one yourself with the fancy term "mortgage".

Covenants generally have an effect, as they may limit future development potential, such as multiple unit restrictions and building height. 9 times out of 10 though, they are rubbish about not using the site for mining purposes or junk yards! About 1 in 50 would have a covenant though, so probably won't have to worry about that.

Make sure you detail all chattels which are to be included in the sale price. Also be wary not to be roped into any peculiar special conditions.

I'd definitely be more cautious about improvements and as Leper said, the shifty SOB's selling them. And if your confident about the price you're offering (remembering that you now have a pretty good idea about the market) then great, if not, get a valuation.

Oh yeah, and make sure you're a fair distance from power lines (100+ metres...at least). Banks hate em!

 

[peternorth]

bought a house recently and settlement is this FRIDAY!!! cant wait.

get the solicitors to look through section 32 for you, its money well spent.

easements? i had no idea what that was until i bought the house. its something to do with water/drainage/sewage me thinks

dont let the real estage agent BS. I went in and told him im a first home buyer but went straight onto the front foot, took the bull by the horns and dictated terms. i maintained pressure on him at all times.

he always said that there were lots of ppl interested in the place and they wanted to put in an offer and i should move fast. in 2 weeks i bought the house! original asking price was 475K but i got it for 450K. agent kept saying he wont go for anything below 460. and he kept saying "Ill be honest with you". Lesson:

- never trust an agent, especially those who say "ill be honest with you"
- find out what the prices of houses in the area are going for. for me it was easy cause it as a townhouse in a lot of 14
- enter a figure that you are comfortable with. even if the agent says the vendor wont go for it still put it in! chances are if the developer/builder is working on other projects he/she will go for a good price because he/she will want the $$ quickly.
- keep hastling the agent after you put in a bid. email/phone to make sure u show ure interest.

 

[Deemoaner]

This link is worth having a look at:

http://www.jenman.com.au/DSA.php

Otherwise just try the Jenman site generally:

http://www.jenman.com.au/index.php

Agents will hate you but if you take your time and educate yourself (the Jenman site will help) you can make sure you don't get ripped off.

Remember your the one who has to live there in the years ahead so make sure you will be happy and pay the right price.

Besides the property boom is over so don't be afraid to pass on a property and move on to the next one. There are currently more sellers than buyers and there will always be another property on the market.

Let someone else rush into the deal and pay too much.

Good luck

 

[eays]

The bit that's the most fun is not the legal side in my view (you pay your solicitor to deal with that), it's dealing with estate agents and learning how to read through their BS.

For example, if they tell you they have a higher offer and the owner will sign if you go $1,000 over that, ask them to show you that offer, which must be in the form of a signed S32. 99 times out of 100 they will be just bluffing you.

One agent I purchased through once actually worked for me more than his clinet (the owner). I offered $633k, but he had me write $620k on the contract, then cross it out and write my (higher) real offer so the owner would think the agent had done the hard yards to extract another $13k out of me. The owner accepted and I was a happy chappy, but the agent was not doing the right thing by his client as I was prepared to pay $640k.

I dunno what got me onto that, but I could write a book on these shonks.

thats a great little tip leper!!! Got any more or any other stories of "shonks". Love listening to stories like that!!

 

[Philzsay]

Thanks for all of the help and words of advice everyone, it is much appreciated.

I have been searching for property for quite a while now, I am one of those people who need to know every single little thing! Hell, when I will be spending roughly half a million dollars it is not a decision to take lightly! A fair few of the local real estate agants are starting to know me (and the missus) quite well. Gee, I think they were amused when a year ago when I first went to open days to gain a feel of the market I used to take a clipboard and had a self made proformer taking down notes of the house. I know the area I'm looking at now so well that I reckon have have just a good idea about price as any of the agents would.

I am comfortable with knowing the state of houses and what work needs to be done. I have a mate who is a professional building inspector who checked out the one place we bidded at auction for, and will check out any other places we are seriously interested in. Best part is that he accepts payments in the form of beer which is much cheaper!

Anyway, thanks again for all your help guys!

 

[The Big Pineapple]

Thanks for all of the help and words of advice everyone, it is much appreciated.

I have been searching for property for quite a while now, I am one of those people who need to know every single little thing! Hell, when I will be spending roughly half a million dollars it is not a decision to take lightly! A fair few of the local real estate agants are starting to know me (and the missus) quite well. Gee, I think they were amused when a year ago when I first went to open days to gain a feel of the market I used to take a clipboard and had a self made proformer taking down notes of the house. I know the area I'm looking at now so well that I reckon have have just a good idea about price as any of the agents would.

I am comfortable with knowing the state of houses and what work needs to be done. I have a mate who is a professional building inspector who checked out the one place we bidded at auction for, and will check out any other places we are seriously interested in. Best part is that he accepts payments in the form of beer which is much cheaper!

Anyway, thanks again for all your help guys!

Where abouts are you looking?

 

[FIGJAM]

easements? i had no idea what that was until i bought the house. its something to do with water/drainage/sewage me thinks

They're the most common.

They also include rights of way, so be sure that you don't have a right of way easement running though your main bedroom, or you will have some strangers admiring your technique!

Party walls (adjoining common walls...possibly like your townhouse) are also easements, as you can't mess with that wall.

They're just charges over a part of land which others need to use from time to time.

 

[Philzsay]

Where abouts are you looking?

Essendon, Strathmore area.

I only wish property prices were linked to the footy teams performance

 

[The Big Pineapple]

Essendon, Strathmore area.

I only wish property prices were linked to the footy teams performance

Had a feeling you might have been. Sounds like I'm at about the same stage.

I'm looking around Kensington though.

 

[Leper]

thats a great little tip leper!!! Got any more or any other stories of "shonks". Love listening to stories like that!!

Not so much a story, but advice.

The auction system is designed to intimidate and control. The way the agents dress like mafia bosses; the fast talking; the theatrics. Do not let these Wayne Kerr's intimite you with this.

Some of my pointers to show the auctioneer you as a buyer have the ultimate power include:

* Upset the momentum of bidding by bidding differently to what the auctioneer is demanding. If they want $5k increments, offer $10k. Or $1k. Even $1. If they don't accept the bid, question why not. Threaten to walk away if they don't - they'll be doing the vendor a disservice if they don't call your bluff.

* Question the auctioneer during the auction. Ask if a bid is a dummy bid (although I think these have to be declared these days, but what the hell, question it anyway!).

* Intimidate your opposition (the other bidders) and stand up the front next to the auctioneer and bid.

Bottom line is don't be intimidated. Control the show yourself. This may not always work of course, but fk it - have fun!

 

[FIGJAM]

That's some ordinary advice Leper!

They are under no obligation to accept a $1,000 bid, nor do they or should they have to give you an explanation. If it's clearly early on in the bid, then you'll just be irritating other bidders (there's a difference between intimidating and irritating). By all means do it if it's close to what you think it's worth.

Secondly, you can question bids all you like, but the odds of you coming accross a dummy bid would be 1 in 10,000 auctions. Vendor bids have to be declared.

Suffice to say, you can be the alfa-purchaser, without being a knob!

 

[Leper]

Fair call.

Not really done any of this myself (only ever bought at auction once), but this is the sort of thing I believe buyers' advocates do. And yes, they can be knobs themselves (like anybody!).

I guess what I was trying to say in my own knobbish sort of way was not to let the auctioneer intimidate you.

 

[eays]

They are under no obligation to accept a $1,000 bid, nor do they or should they have to give you an explanation.

Why not??? are there rules to an auction which state that bidders can only bid in certain amounts?? or is the auctioneer just able to reject a bid at his discretion if it doesnt meet the increments they request??

thanks for the info fellas, i'm obviously inexeperienced at this sort of stuff but looking to buy soonish so the more info the better.

 

[FIGJAM]

They have the right to refuse bids at all times. I work in real estate and have seen it happen dozens of times.

If it is against the interest of the flow of the auction they will do it. It'll generally be below the reserve price, at which point them refusing a bid isn't against the interest of the vendor.

If you're doing it too early, I guarantee you that the agent and spectators/bidders are thinking of a word starting with w and ending in anker!

 

[FIGJAM]

Fair call.

Not really done any of this myself (only ever bought at auction once), but this is the sort of thing I believe buyers' advocates do. And yes, they can be knobs themselves (like anybody!).

I guess what I was trying to say in my own knobbish sort of way was not to let the auctioneer intimidate you.

I'm not calling you a knob Lep!

Buyers advocates won't even start bidding until they know it's live. At which point the tactics you mentioned come into play. A knockout bid, or prudent bidding will help your position. You have to time it right though, which is all I was saying.

 

[medusala]

If it is against the interest of the flow of the auction they will do it. It'll generally be below the reserve price, at which point them refusing a bid isn't against the interest of the vendor.

If you're doing it too early, I guarantee you that the agent and spectators/bidders are thinking of a word starting with w and ending in anker!

A large number of auctioneers are arrogant prxcks. They want to keep the auction flowing, its in the bidders interest to slow it down.

The best buyers advocate I have seen told me the best way was not to make a public spectacle like one well known duo but rather knock out most bidders by making an early bid just under where he thought the reserve would be.