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One Buyer’s Journey: A Cautionary Tale About the Importance of Building a Good Property Team

08-Dec-2017
As reported in the Sydney Morning Herald, all seemed well for the Texan property magnate Matthew Hyder as he and his wife moved into their new luxury home in Sydney's Bellevue Hill. This was the culmination of months of research, visiting properties throughout Sydney's most prestigious suburbs, and sealing a good deal on one particular mansion which had taken his Mrs Hyder’s fancy.

The property the Hyders were moving into had been put up for sale by banker, Edward Jewell-Tait, in 2014. The advertisement for the property noted that it had four bedrooms, three bathrooms, a double-garage, and was a mere stroll to local schools. The agents, McGrath real estate, had also advertised private off-street parking and ‘driveway parking’. This was ideal for the Hyders and they happily proceeded, eventually offering more than valuation in order to secure the property.

The Problem

Nothing had seemed out of order until one day Mrs Hyder noticed some trucks parked in the driveway. They belonged to workmen who were doing work on an adjacent property. Mrs Hyder confronted the workmen and asked them to remove their vehicles from the Hyders’ driveway. The workmen refused, telling Mrs Hyder they had every right to park their vehicles there because the driveway was a right-of-access, and what they were doing was entirely lawful.

The Court Case

The Hyders disagreed and ended-up taking McGrath real estate to court arguing they had been misled by deceptive conduct on behalf of the real estate agents. The right-of-access, they said, should have been disclosed up front.

Though the court agreed that Mr and Mrs Hyder were misled, Justice Guy Parker noted that McGrath real estate were relying upon information given to them by the vendor. The vendor had failed to disclose to McGrath real estate that the property had a right-of-access. Possibly this was because the vendors had never been troubled by the existence of the right-of-access. It didn't bother them, as it may not have bothered anyone else. However, buyers who are not used to these kinds of property nuances, which are very common especially in the country, expect to know about anything which might affect their use and ownership of a property.

Justice Parker dismissed the action against McGrath real estate, finding against the Hyders in this case, and asking them to pay legal costs to McGrath. Justice Parker noted in his findings that the right-of-access had, in fact, been disclosed in the contract of sale. The Hyders' solicitors for the property transaction had full access the contract and were instructed by the Hyders to proceed.

When he was asked why they had paid $400,000 over valuation, Mr Hyder responded that it was simply due to his wife having fallen in love with the property. Justice Parker said it was clear the purchase was an emotional one, probably motivated by the property's aesthetic appeal and its location close to shops and schools rather than the total amount of car parking space available.

Avoiding Feelings of Being Let Down

In the Hyders' experience, there is probably a sense of feeling let-down. Most buyers and vendors only go through this experience of selling or buying a home once every 15 years or so. They don't have the experience and knowledge of the industry and local by-laws, zoning, regulations, and quirks of ownership like access-roads and caveats, that professionals in the industry have.

Vendors and buyers come to industry experts such as real estate agents, property managers, conveyancers, valuers, and pest and building inspectors, to buy the experience and knowledge they don't have. Property investors, especially, are looking to assemble an excellent team to help guide them through the property market, helping them to invest in and make a good return from real estate.

Mr and Mrs Hyder's experience provides a cautionary tale about the importance of having a good team behind you as you enter the property market. As an investor, you need good people on your team from every expert area.

While your experience of property investing may not reach the highs and lows that Mr and Mrs Hyder's journey did, it is just as important to make sure your expert team is delivering the best service in your interests as they possibly can. Your real estate professionals need to go the extra mile so you can make the best decisions on the properties that you buy and sell, hold and improve, and build-up into an excellent real estate portfolio.

Do you have any questions about your real estate portfolio? 1on1 Property is here to help. Whether you are new to investing or experienced, give 1on1 Property a call on 4014 1900 and let us help you with your real estate questions.

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