Sydney Morning Herald, Feb 23 2007
By Susan Wellings

The road to your dream home is full of potholes and dead-ends. These are the most common.
Buying a house is one of the most important – and costly – decisions anyone ever makes but many people seem to devote more homework to choosing a car.

The problem is there are huge traps waiting for those who simply don’t do enough research beforehand.

So what are the biggest, most expensive and potentially most ruinous traps that the unwary buyer can blunder into?

Just believing the agent

It’s one of the oldest traps in the book: the estate agent tells you how much the vendor expects and you take that to be the market price. “But that doesn’t mean the property is worth what the vendor wants,” says buyer’s agent Dennis Kalofonos, principal of Sydney Property Finders.

“You need to check all the information you’re given, you need to test everything they tell you. Unless you hire a buyer’s agent to be wary for you – that’s our job – you have to beware of everything yourself.”
At the end of the day, the sales agent is working for the vendor, however friendly and conspiratorial they’ll seem with you. The vendor is paying the agent to achieve the highest possible price.

Not checking the neighbourhood

It’s important to know exactly where you’re going to live. Are there any primary and secondary schools close by, public transport options and good community facilities?

“Check the transport options to see how good access is to the city, and older people should know how good the local medical services are,” says Michael Finger, of Ray White Double Bay.

Giving inspections a miss

This can be one of the most costly false economies of them all. A combined building and pest inspection, which will usually cost from $500 and take about two hours depending on the size and type of house, can unearth all sorts of hidden nasties, such as structural defects, dry rot and termite infestations.

“It’s consumer protection,” says Stephen Ransley, the general manager of Tyrrells Property Inspections. “A building and pest inspection combined, from someone suitably qualified and licensed, is absolutely necessary.”

Ransley says many people get mates or retirees from the building industry to do cut-price inspections for them – and often end up paying the price. One man bought his house and only realised when he moved in that there might be a problem when termites flew out of the walls and cavities. It cost him $50,000 to get rid of them.

“You need an expert who knows what to look for,” Ransley says. And, of course, the prospective buyer should make sure to read the report he has commissioned. Many don’t.

No price research

Many people still don’t do any research on the price of property, which can prove costly in the long run. “There are still so many people out there who just seem to wing it when it comes to property,” says Michael McNamara, housing analyst at Australian Property Monitors. “It doesn’t make sense.”

Today, there’s so much information around for home buyers to take advantage of. Access is often easy and it’s relatively cheap, he says. With Sydney homes spending an average of 115 days on the market, there’s usually plenty of time to check on them.

McNamara recommends potential purchasers buy an APM Home Price Guide (, from $60), which gives a report on a property’s history and how much a property last sold for, which makes it easy to work out its current value. “We’ve also got a product called Home Price Guide Live, which gives you a user name and password to do searches online, which is close to what the real estate agent would use when trying to appraise a property,” McNamara says.

“Also, our software will create a current valuation. By doing that research, [buyers are] empowering themselves.”

Believing the boundaries

In old areas, try to get a survey included with the contract to make sure the boundaries are as stated, says Matthew Hayson, of Corben & Hayson in Balmain.

Scheduled inspections only

It’s not enough to go along to the inspections on, perhaps, a Saturday morning and Wednesday evening. “Before you buy a new property, be sure to visit it at different times of the day,” says HomeSource managing director Pia Vogel.

“Coming back to the area in the early morning, evening and night will give you a good indication of the noise and feel of the place. There would be nothing worse than buying your dream home that was quiet and peaceful when you visited it during the day, only to find that the neighbours or local traffic keep you awake all night.”

Dan Joseph knows that only too well. He fell in love with a beautiful home in a cul-de-sac in Manly on the Saturday afternoon but, when he went back to check it at 5pm on Monday, he found a different picture.
“Fast cars were roaring into the duplex next door and one guy was shooting hoops out the front of his place, with really loud rap music blaring out,” says Joseph, 32. “There was a real hood vibe about the place and there were shopping trolleys outside every house, all the way up the road. It was all so different from the image I saw on the Saturday.”

No easement checks

As well as sending a copy of the sales contract to a solicitor or conveyancer, agent Luke Barbuto, of Pacific Payne Real Estate, recommends telling them of any plans you have for the property. “For example, if you are hoping to put a pool in the backyard, tell the solicitors so they can check for easements that might prevent that,” he says.

Ignoring dodgy work

Bar worker Jennifer, 32, recently bought an old house in the inner west, loving the fact that it had a garage at the back turned into a single unit that she thought her elderly mum could move into at some point in the future. But she didn’t check that the work was legal or compliant.

“And it turns out it’s not,” she says. “I’m now living in fear of upsetting any of the neighbours so that they’ll report it to the council. They all know it was done on the sly, without permission, so they could dob me in at any time. The strain is exhausting. I’m thinking of trying to sell, but if anyone else checks …”

Planner Rob Power says all the checks should be done before purchase, to make sure you’re never in this position. All work done, from a simple extension of a room to a new storey on a house, from a new deck out the back to a garage built at the front, should have council approval with a certificate of confirmation from the certifying authority.

“If you buy a place that hasn’t been built in accordance with council approvals, it can expose you to action,” says Power, a senior associate with The Planning Workshop Australia. “Everyone should ring the manager of the building section of their local council to do their checks.”

In the worst-case scenario, you could be ordered to pull down illegal work. That fabulous two-storey home with magnificent deck could revert to a cottage.

In addition, most finance companies won’t lend money against a renovated property that does not have council compliance.

Not talking to locals

Have a chat to the council, to police and to neighbours to see what might be the major problems in the area. The council will be able to tell you if there’s a current development application on that piece of waste ground opposite for a major supermarket and 20-storey block of apartments. The police can tell you if you’ve moving into the worst area for crime in the region.

And neighbours will be able to tell you everything else that’s good (street parties, a real sense of community) – and bad (that pub on the street that’s noisy and specialises in knife fights after hours).

Tribal mistakes

It’s important that you choose somewhere to live that suits your lifestyle, says House Search Australia director Jacque Parker. If you’re into cafe society and night clubs, then you really should try to live in an area where you can do that, instead of a rural region. “I’ve got one client at the moment who bought a house in Toongabbie but who’s now realised he’s made a mistake and is looking to buy in the inner west,” Parker says. “He missed all the cafes and restaurants, and all his friends who lived there. It can be an expensive mistake to make.”

Similarly, if you have a young family, you won’t want to buy in a suburb full of renters who travel to the city every day. “And there might be no child-care services and facilities there,” Parker says. “And no company.”


Damian Richards has some heartfelt advice for fellow house hunters: don’t do anything until you are sure you know what you are buying.

“The house might look perfect, but get an expert to make sure that the foundations and structure are also up to scratch,” the 34-year-old says. And he should know.

The national sales manager for an equipment financing firm was on the verge of buying what he thought was his ideal home when he found out the immaculate renovation job was masking serious construction and pest problems.

Fortunately, his offer of $872,000 for the three-bedroom house with water glimpses was subject to a reasonable pest and building inspection report.

“We were under a lot of pressure by the agent not to do an inspection, but to just swap contracts. Even though we liked the idea of settling before Christmas, we didn’t trust a lot of what we were being told.”
Despite mounting pressure, Richards sent a copy of the contract to his solicitor and ordered a pest and building inspection. As well as some worrying discrepancies in the contract, the pest and building report revealed extensive termite damage throughout, termite nests still packed into the walls, and rafters that were so rotten the roof wouldn’t hold the weight of the building inspector to check for further damage.
“To be told you would need $50,000 to replace the roof alone made it easy to pull the pin on the whole sale,” he says.

Richards is still hunting for his dream home.

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