Check the property title for single dwelling covenants and ensure your borrowing capacity is current. These two factors can either significantly limit the property’s future value or prevent you from settling the contract.
Single dwelling covenants
Many estates in Officer and Pakenham from the late 1990s to 2010s have restrictions limiting the land to one home. This prevents subdividing or dual occupancy and can suppress the price of larger blocks by $30,000 to $60,000 compared to unrestricted titles.
Precinct and block size
Verify if the property is in Pakenham South or Old Pakenham, as they are different markets. Pakenham South features modern homes on 350 to 500 square metre blocks, while Old Pakenham offers larger blocks of 600 to 900 square metres with more renovation and development potential.
Total settlement costs
Budget for expenses beyond the deposit, such as $1,200 to $2,000 for conveyancing and $500 to $800 for building and pest inspections. For a $600,000 purchase, the total cash required for settlement is approximately $45,000 to $60,000.
The honest reality
Two recent rate rises have changed borrowing capacities across the board. A pre-approval obtained six months ago is outdated and may no longer be accurate for your current financial position.
Questions to consider
- Is there a single dwelling covenant on the title that would require a costly and lengthy VCAT application to remove?
- Does the block size align with my long-term goals, whether it is the modern standard of Pakenham South or the larger lots of Old Pakenham?
- Do I have the necessary cash for connection costs and inspections in addition to my 5 or 20 percent deposit?
Talk to KR Peters for a straight-talking appraisal with no obligation.
krpeters.com.au
Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.