Buying a house in Tasmania
Navigating a Tasmanian real estate contract, here's are a few handy tips!
When buying a House in Tasmania, a real estate contract generally has a defect limit, and prior to May 2017 it was 1% on every contract. Now days I've seen it anywhere between 1 and 5 percent and I have even seen 10 percent a few times.
The problem with a high defect limit,
Let's say you write 5% down for the defect limit and the house is selling for $600,000, the defect limit is $30,000 then the building inspector finds quite a few defects while doing the building inspection, you then get quotes to repair the defects and they come back at $25,000, you are going wear that $25,000 on-top of the purchase price of the house, because the defects are less than the defect limit.
If it’s over the 30k, to certify $30,000 worth of defects you will need quotes, as I had an agent, ask me to prove it recently. On top of that, trying to get trades to come and quote is very hard to do in the time frame, as trades are so busy here in Tasmania. It can become very stressful really quickly, as the building inspection clause is usually only 7 -14 days max.
So try to keep the defect limit on the contract to a minimum of around 1% or no greater than $10,000
If a house is in good condition, why do they want a high defect limit!
A few things that can help
Add the 3-day cooling off period to the contract and make sure you line up your building inspector and get it done in those 3 days.
Get a building inspection before you sign the contract which is common on the mainland or just say NO! It's only going to be 1%
If you are sill unsure, give me a call 0417589089
Get a good lawyer or conveyancer:
If you do it yourself and make a mistake, you could suffer a loss as a result and will be unable to get financial compensation.
The buyer becomes liable for damages to the property once contracts are exchanged. I've seen a house that was unoccupied and someone broke in and lit a fire on the timber floor after the contract was signed.
Make sure you have the building inspection clause and the 3-day cooling-off period, In the contract:
Plus a minimum of 7-10 days period to get the building inspection done. (Christmas time longer, 21 days)
Don’t use a real estate recommended Building inspector!
Would you buy a car from a used car salesman and get it checkout by his mechanic or your own!
Get a fully licensed and insured local building inspector and research him:
You're about to spend your life savings so be careful.
Check to see if he is a licensed builder with the Department of Justice Tasmania
Ask to see a copy of his PI insurance
Because without PI insurance a building inspector can't certify the defects if there is a problem.
Try to line up the building inspector early
To take advantage of the 3-day cooling-off period.
Not getting a building inspection is like playing Russian roulette with your life savings!
I get people ringing every month with sad stories about how they brought a house without getting a building inspection, it's got major issues, and can I come and have a look!