This article is for general information purposes only and reflects the state of information at the time of publication. It is not legal or financial advice. Always seek professional advice tailored to your specific circumstances before making decisions.
Buying or selling property is meant to be a joyous occasion. You’re dreaming of owning your slice of our great land.
But here’s the rub: property transactions are a high-stakes legal process. It’s easy to feel confused, overwhelmed, and unsure who to trust, and there are plenty of financial snakes lurking beneath the shiny veneer of glossy brochures and charming agents.
These “hidden costs” aren’t always big bills upfront; sometimes they are the lost leverage or the disaster you inherit later. Luckily, knowing where the traps lie is half the battle!
Here are three common money pits savvy buyers learn to avoid:
1. The Trap of the “Free” Report
You’ve found the perfect home, and the agent kindly sends you a link for a pest and building report. It’s cheap, it’s neat-looking, and it’s convenient. What could possibly go wrong?
The Hidden Cost: Unreliability.
If a report has been commissioned by the vendor (the seller), you generally cannot legally rely on it if structural problems arise later.
The Takeaway: Your independent report is your safety net. Always arrange your own independent pest and building reports. They are your only real legal protection against expensive physical risks.
2. The Unapproved Extension
That gorgeous deck or spacious granny flat might have sold you on the house, but are they actually legal and what are the hidden costs of Inheriting someone else’s unapproved works?
When you buy a property, you take on the legal responsibility for everything to do with it. If a renovation (like a new garage, extension, or pergola) was built without the proper Development Application (DA) and final occupation certificates, that issue becomes yours the minute settlement happens.
A common surprise is the “granny flat” that looks perfectly liveable but is only approved in Council records as a shed. It can’t legally be rented out or lived in.
If Council records show a structure was never approved, they can send a letter months later demanding you lodge a retrospective DA or remove the structure. This involves weeks of stress and thousands in consultant fees that you hadn’t budgeted for.
The Takeaway: Property due diligence is not optional. You need to check that every addition has the required approval. Skipping this step can turn a safe investment into a ticking time bomb.
3. The Cooling-Off Period Penalty
The agent says you must sign immediately or you could lose the property, but don’t worry, you have a cooling-off period, right?
The Hidden Cost: Paying to change your mind.
Many buyers think the cooling-off period, typically five business days in NSW, is a risk-free safety net that lets them get reports done later.
This is a myth.
Once contracts are exchanged, the vendor holds the upper hand. If you find issues after exchange and ask the vendor to fix them, they can simply say “No”.
If you choose to rescind (pull out) during the cooling-off period, you automatically forfeit 0.25% of the purchase price.
The Takeaway: Get your Pest and Building reports before exchanging contracts. Only exchange when you are clear, comfortable, and covered.
