I was recently asked by a client if due diligence was a waste of time and money. I was surprised that someone would ask this question, especially if they were about to invest their hard-earned money into an investment property. After digging deeper there was an assumption made by my client that sellers always do the right thing and properties generally comply with the local regulations.
From my experience, this is unfortunately far from reality, I shared an example of a property I recently purchased for a client. The house was owner occupied and only a few years old, this was the sellers dream home they had built by a reputable local builder.
As part of our service, we conduct strict due diligence, no ifs or buts. We conducted a Council building approval search and we discovered the dwelling approval hadn’t been finalised through Council. This may alarm some people but it’s surprisingly common. For this reason, it’s a standard search we conduct and more importantly I include a special condition in the contract of sale that requires the seller to do all necessary works and obtain all such final inspections and local authority approvals. If not completed the buyer has the right to terminate and get their deposit refunded in full.
This special condition gave me the opportunity to negotiate with the seller and get them to undertake a new building development approval from a private building certifier and ensure everything was finalised through Council before the settlement date.
As it turns out, the builder still had a good working relationship with the original private building certifier and they quickly worked together to finalise the paperwork to get the Council approval before settlement. If it wasn’t for our special condition this situation would have been entirely different and the new buyer would have been left in a stressful position, to start the approvals from scratch without having the local knowledge or personal relationships.
If you’re thinking of investing in property and don’t want the worry and stress, then maybe it’s time to book a one on one private consulting call with Simon.
“Simon, we would like to sincerely thank you for your efforts in helping us acquire our investment property. We are very appreciative of the time and effort you put into making the whole experience stress free and enjoyable. Your professionalism and understanding of our needs and your assistance every step of the way was so reassuring. We certainly look forward to working with you again. Once again, a big Thank You!”
Lexi and Ramesh Pillai – Menai, Sydney