In property as in life, there is simply no substitute for experience.
Experienced specialists learn to spot nuances and quickly pick up on important matters that others deem inconsequential or miss altogether. We are also skilled at managing relationships and dealing with other professionals. Experience helps build networks with like-minded and trustworthy specialists in other fields. We rely on our contacts to help work through any challenges and find appropriate solutions.
This is perfectly illustrated when I quickly spotted an issue that could have brought an entire deal undone and left my clients without a home.
Limited Title – A Potential Deal Breaker
I was helping a family find a home in Sydney’s inner city.
They had recently arrived from the USA and were unfamiliar with the intricacies of buying property in Sydney. They wanted a renovated four-bedroom property that was within walking distance to the University of Sydney where one of them worked as a senior lecturer.
The couple were working with an experienced mortgage broker and had secured pre-approval for finance so they felt confident things would run smoothly.
I found a beautifully renovated terrace with four bedrooms, two bathrooms, and a courtyard. There was even rear lane access. It was a dream come true for my clients. The deal was negotiated and signed at $2.075 million.
However, it was during my initial read through of the contract shortly before my clients’ very first inspection of the property that my radar picked up on a potential stumbling block for inexperienced players. I spotted something that could have caused a hiccup when the formal loan application was made. I knew steps would need to be taken early to avoid the buyers being unable to purchase their dream property.
Having previously worked as a property solicitor, I was well aware that the property was on what is known as “Limited Title”. Limited Title stems from 1863 when NSW transferred from the old land titling system to the new Torrens title system. At the time, the Government did not conduct individual surveys of every property as part of the change. As a result, the actual boundaries of many properties in older suburbs and throughout inner Sydney are currently unconfirmed by the State’s lands department – now called NSW Land Registry Services.
Most local owners do not worry too much about Limited Title. After all, if the dimensions and boundaries are in dispute, one would have thought this issue would already have arisen by now. Limited Title is quite common throughout the inner city and in particular in suburbs such as Newtown, Glebe, Darlinghurst, Redfern and Surry Hills for example. It is possible to have the Limited Title registration removed, but it does involve an expensive survey process. As such, most locals simply let it be.
However, I knew from experience that it could cause a problem with finance. The clients had sourced their preapproval from Bankwest – a Western Australian based financial institution. I suspected the lender would be unfamiliar with the relic of Limited Title in Sydney’s inner city.
The Solution
When my clients confirmed their interest in the property, I contacted their mortgage broker who I had worked with before and explained the situation. He understood the problem. He immediately contacted Bankwest who confirmed that Limited Title was not acceptable for the lender.
The solution was to have their mortgage broker seek another lender more familiar with Limited Title properties. He found that one of the Big Four was able to finance the deal and accept the security. Accordingly, I negotiated the purchase with a five day cooling off period to allow sufficient time to switch to the new lender. My clients had plenty of time to reorganise their paperwork and receive unconditional finance approval before expiry of the cooling off period.
Under normal circumstances, a solicitor may have picked this up during searches and contract review, but that could have been days or even weeks later. Either the buyers would not have proceeded with the purchase or worse still, they may have proceeded but realised only after unconditional exchange of Contracts that there was a major problem with finance.
The Lesson
This deal illustrates a couple of important points for buyers.
Firstly, dealing with an experienced and highly specialised buyer’s agent not only improves your chances of finding and securing the best possible property, but it can also ensure that purchasing a property is a smooth process.
This covers all facets of the purchase and due diligence process from understanding local town planning matters; to the implications of buying under a particular entity; to the appropriate clauses to negotiate in a contract – all these elements and more can be discussed with your experienced buyer’s agent.
Secondly, having a network of professionals who can communicate quickly and easily to resolve issues will prevent problems from developing well before there is a costly or unsatisfactory outcome. There is no doubt that experts like dealing with fellow experts who know their stuff. It creates a seamless process and brings about a win-win for all stakeholders.
So, please don’t miss important and potentially expensive problems by going it alone. Instead, draw on the experience of a well-connected buyer’s agent with local knowledge and a wide network of contacts. I will ensure you secure your deal efficiently and with minimum stress.
Call me today on: 0405 134 645
