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How purchasers can avoid ‘The Block’ situation
After a record-breaking sale on Channel Nine’s last season of “The Block” fell through, an industry expert has issued some advice to buyers looking to avoid a similar predicament.
Despite the COVID-19 downturn and falling house prices, “The Block” couple Jimmy and Tam managed to scoop a record-breaking $1.066 million profit (including a $100,000 first place prize) during the live auction in November.
However, a month after going under the hammer, Channel Nine made a shock revelation just before Christmas, announcing that the sale had fallen through after the buyer failed to meet the deposit requirements.
At the time, Channel Nine issued a statement, noting: “Everyone at The Block and Nine are very disappointed for Jimmy and Tam that the sale of their home was not completed as scheduled.”
The winning Block house sold to 28-year-old Emese Fajk for $4.256 million during the live, televised auction, just shy of $1 million above the $3.29 million reserve.
This made winning couple Jimmy and Tam instant millionaires, with the pair seemingly walking away with over $1 million in total prize money.
But things turned sour a month later, when the settlement date was reached and the buyer was a no-show, stripping Jimmy and Tam of close to $1 million, but not the winner’s title.
“Jimmy and Tam remain the winners of The Block 2020 as they would have secured the win on the previous bid.
“We will now work with them and their agents to finalise a sale as soon as possible, and we are confident of a positive result for this unique property,” Channel Nine said.
How to avoid a similar situation?
Aus Property Professionals founder and buyer’s agent Lloyd Edge has given investors a few handy hints to avoid a similar situation:
- When buying apartments, it’s crucial to look at the by-laws and a strata report which will help you determine whether there is a healthy and friendly operation of the building.
- If you are buying off the plan, because the process generally takes a couple of years, you need to consider that the market may change considerably and interest rates and property prices are likely to fluctuate from when you purchase until you settle.
- Consider the type of ownership you want to own if you are purchasing with a spouse or friend as this can go against your wishes under a will.
- Make sure you account for fluctuating interest rates, upfront costs, First Home Owner Savings Accounts and budgeting for your lifestyle when buying a property. Also consider your inspection costs, conveyancing costs, stamp duty costs, set-up costs and changes to interest rates in your budget to buy a property.
- Liaise with your accountant if you are buying a property for investment purposes, as there could be significant tax benefits for you.
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