There are two types of buyers. Savvy buyers know when to strike to snare a property and what their legal requirements are in relation to contracts. They are also aware of the length of any cooling-off periods and when the final deadline for payment falls.

Naïve buyers are not aware that signing on the dotted line ties them into a series of a contractual obligations in relation to settlement timing and payment schedules.

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Buyers’ agent Janet Spencer says such ignorance can leave buyers with a nasty financial headache to the tune of thousands of dollars.

“At an auction … once your hand goes up and your bid is accepted it is a legally binding contract that you can’t get out of unless you’re prepared to lose a substantial amount of money (a deposit),” says Ms Spencer, who is the director of Kew-based Buyer Solutions and the Victorian representative for the Real Estate Buyers Agents Association of Australia (REBAA).

“A private sale gives the buyer a cooling-off period of three days in which they can change their mind once they’ve signed a contract. But you can’t change your mind a week later and expect to get your deposit back. A little light reading of the sale contract – about five minutes – is well worth it. It is a good idea to have the contract vetted by a lawyer or a conveyancing expert before you sign it.”

Ms Spencer says the consequences of being naive can be “financially disastrous” for those buying their first home. So she says it’s important to have expert advice to ensure you are not buying a lemon.

“A buyers’ agent can take a lot of the pain out of the buying process by researching the area, negotiating price and ensuring all the legal and contractual details are taken care of,” she says. “Many people may not be aware that you can arrange 30, 60, 90 and 120-day terms when it comes to final settlement and payment. A conveyancer and/or a lawyer will conduct checks on the property to ensure there are no outstanding debts on it or special caveats attached to it such heritage listings, planned building work or council restrictions.

“These enquiries are a check to ensure that all issues are disclosed in the contract. And on settlement day they will help to ensure payments are made on time and you get what you pay for.”

Ms Spencer says those wanting a “buyer beware’’ type guide or list should visit Consumer Affairs Victoria’s website where they can access “a due diligence checklist’’ for consumers.

‪See www.consumer.vic.gov.au for more. 

This story was brought to you by The New Daily using data and other information from its real estate content partner, realestateVIEW.com.au