#6: Strata vs Stratum vs Company Share Explained

[00:00:11] Melbourne will be hot throughout the day reaching a high of 38 degrees with a late change and possible thunder in the evening with a forecast low of 17 degrees. First time, second time, third and final time, it's sold!

[00:00:35] Hello Melbourne! I'm Lisa Parker and together with Cate we are bringing you a dose of our property market in detail. I'm Cate Bakos. Lisa and I are both buyer's agents who work on opposite sides of the Melbourne market and we've clocked up over 40 years between us in the property industry. Join us each fortnight to hear some exciting stories from our coalface, market trends and some juicy auction updates. This collaboration has been a long time coming. We hope you enjoy.

[00:01:09] Hello Melbourne! It's so good to be back here in the studio with my buddy Lisa. And today we're chatting about something that is very Melbourne centric. But before we jump into that, it's been a little while since we've been in the studio together. How are you doing? It has, hasn't it? I mean, I think it's been a whole week, but previous to that we took a year break, didn't we? Yeah. It's been a fun start to the year this year, hasn't it? Has indeed. I think it's hit a really nice balance where there's a lot of momentum in the market,

[00:01:37] but it's not as frantic as it was last year, which was so good for us because that momentum is wonderful. But you don't want to be, you don't want it so crazy that you've got six deals going at one time and it's just mayhem. Yeah. I like chatting with you daily too. We're getting to do a bit of that. Oh yeah, that's true. We've got more time. Yeah, exactly. Well, today we're chatting about something that a lot of buyers don't understand or don't even know about.

[00:02:05] And it is a little bit mysterious because it's an invisible issue and it's completely related to Melbourne, or at least it's quite prolific in Melbourne. And that is different title types. So for anyone out there who's heard of the words company share or stratum or strata, they're not the same, not same, same at all. They're very, very different. So that's what we're going to unpack today. Not just the technical detail, but the issues that buyers can look out for and the problems associated with them and also the opportunities.

[00:02:34] Yeah, there are some actually some great opportunities with this. And I think it's particularly relevant for, especially comes up with people from Sydney, that there's always a lot of questions around the names of our titles are and different ways that property can be structured. Because in New South Wales in particular, it's very, very different. It's also going to be super relevant for first home buyers who are looking at purchasing apartments to understand these differences,

[00:02:59] because I think there was a news article last year where somebody was caught out quite badly with this and they lost, I think, $40,000 or something in the process. I can't recall the details of it, but I'm pretty sure I heard something last year in the news about this. Yeah, well, $40,000 in my opinion, if you made a blunder on this kind of title type is a pretty good escape.

[00:03:21] And $40,000 is so much money, but I can imagine that the losses would be much higher if someone put the full 10% down and got it horribly wrong. So shall we dive in and start unpacking which order shall we go in? Well, let's talk about what the differences are. So what makes something company share or stratum and not strata? Yeah, well, I think the first place probably to start is maybe the preferred one, which is strata. Yeah.

[00:03:50] And that's the one that we see most commonly in Victoria. And that means that you get a title for your apartment, that it's run by an owner's corporation, and that usually all of the owners within the complex are unit holders within the owner's corporation. So you've got a full title of your property and you all own a percentage share of the common areas by way of unit holder. And that's the way that's structured. And it's the one that the banks love the most. It's the most friendly.

[00:04:20] It's the most common. And it's the one that you probably want if you're a first home buyer. A hundred percent. So if you're going into mortgage insurance territory, so if you're borrowing more than 80%, let's say you've got a 5% deposit and you're not eligible for the guarantee. So you're borrowing 95% on a 95% LVR loan with mortgage insurance payable. The bank is likely to say yes to strata if everything else stacks up.

[00:04:48] So if there's nothing wrong with the building, if they deem that it's an appropriate security and if you've paid the right price for it. But where things can get really sticky is if it's not a strata property and you're borrowing more than 80%, the bank will say no to a stratum or a company share. And that's because of that technical difference that you just described. The idea of that shareholding for a bank means that they've got a security property that they can take off you if need be.

[00:05:16] So they see it as a safer security. If it's a stratum or a company share, it gets a little bit more technical and much higher risk for the bank. And I think it would be good to delve into what a company share property is and then what a stratum is because it's sort of a hybrid between the two, isn't it? It is. So which one would you like to tackle, Kate?

[00:05:39] Let's chat about company share because I remember when I was a first home buyer, I loved the idea of buying an Art Deco property for almost half the price of some of the other ones that were going because it was company share. It had a huge discount associated with it. And the reason for that discount is why, Kate? It's because the banks don't love them. And so the buyer pool is so significantly reduced.

[00:06:03] All of the borrowers that are looking at anything, most likely over 60% borrowings, but some banks will go up to 80 depending on their policy. It means that most first home buyers and a lot of other buyers aren't in the mix. So you've got a limited pool of buyers, so a limited number of people fighting over this property. Of course, you won't achieve the same prices. There are also restrictions and sometimes some costs associated with company share that people don't love.

[00:06:29] And as you mentioned, you can have allocated ownership structures with voting rights that aren't equal between unit holders as well. It's a little bit archaic. It's quite old fashioned because these things all originated, you know, around the Art Deco era. I think back to all the gorgeous jewelry and the fashion and the things that we loved about Art Deco. It was a long, long time ago. It was around 100 years ago. So things were different. Rules were different.

[00:06:55] Sometimes these company share rules, model rules, restrict people having pets altogether. So, you know, you've got to assess them on a case by case basis, but they don't appeal to everyone. Yeah, I think the biggest thing for listeners to understand about a company share is that you're not actually getting a title for the property that you're purchasing. What you're doing is getting your, you become a shareholder in the company ownership structure for that unit block.

[00:07:25] And that's the reason why the banks don't love them. So banks sometimes will limit their borrowings to anywhere between 50 and 60% of the LVR. And I was having a chat with my solicitor about this the other day, but she actually had one come up and these aren't as common these days as they, as they were. We used to see it quite a lot in the beginning of my career, 20 odd years ago. It doesn't come up as often these days. However, whenever I say a cheap Art Deco, I know, I know why. Totally.

[00:07:55] And she was saying that a lot of the times there's no banks involved in the actual settlement proceedings because most people are actually purchasing with cash rather than getting a bank involved. And we're chatting about the fact that, like I just said, we haven't seen them. We don't see a lot of them lately, but there will come a time in the near future where we'll start seeing a lot more.

[00:08:18] When people start passing away and their estate is being sold, then a lot more of these Art Deco apartments that have been held for a really long time in a company structure are likely to come to market. And whether or not they actually change the structure before going to market or they go to market as a company share will be really interesting to see.

[00:08:39] But there's actually a really big upside with this, Kate, if you want to go into that a little bit, because there's a real opportunity here, I think, for savvy buyers and investors who aren't so risk adverse. Yeah, indeed. And I am one of them. I bought one in St Kilda East and I was pretty excited about it. I paid $267,000 back in 2011, 2012 with the plan to convert it.

[00:09:08] So if you can convert a company share or a stratum title to strata, you're in front already. You've added invisible value overnight, but that doesn't necessarily come with an easy or low price tag. Sometimes there are a lot of hoops that you've got to jump through. And essentially what we're doing is taking a property and doing a subdivision. So let's say there's six in the group and you've got a company ownership structure. You're creating six individual units.

[00:09:38] Sounds simple. You go to the titles office and they say, yes, doesn't happen like that at all, because we have to demonstrate that the property matches today's code. It's got to have all of the appropriate second exit options. So, you know, escape routes or fire escapes or however you want to call it. Back in the day, back in the 1920s, think about New York style apartments. Some of them had those pull down ladders. The Victorian government's not going to sign that off on, you know, with their safety checklist.

[00:10:05] They want to say that you've got a robust staircase and you've got safe exit options for every single resident. And of course, you've got to bring up all of those building standards to today's code. So you often find that there's a really significant amount of work to be done before the property actually can be registered for, you know, a subdivision. And of course, you're involving surveyors. So it's not always an easy option.

[00:10:32] It can be hundreds of thousands per resident to get a property ready to be converted from company share or stratum to strata. But once they are, you're adding at least 30% in value to that asset. And sometimes you'll see a company share structure that was done not in the art deco period. It might be a really daggy 60s looking block and it did have the appropriate fire exits. And there isn't much that you need to do to bring it up to code. And that was what I targeted.

[00:11:02] I ended up getting a pretty daggy looking block. Well, I bought one unit in the block, but I'm not dealing with those art deco issues or the need to create a staircase that already has that. So for us, the conversion was $30,000, not just for us, between everyone, which was amazing. But you've got to keep your eye out for them and know what you're doing and what sort of hoops you've got to jump through because it doesn't take a short period of time either.

[00:11:28] I was looking at a rough fees though the other day, because there's a guy who specializes in this space. His actual employment is in retrofitting buildings so that they can be compliant and they can go through that process. And he'd actually bought a four pack in the Northern beaches in New South Wales. And I think his buy-in costs were about $2.5 million, which is actually quite low for a Sydney asset.

[00:11:57] And because apartments are quite well received in Sydney, in the Sydney market, more so than the Melbourne market. Not that they're not well received here, but in Sydney, they do tend to grow quite a bit in value. And after the conversion, I think his conversion costs were about $1.5 million. And then I think he had about $1.5 million of profit at the end of it after it was all said and done.

[00:12:21] So we're talking big numbers when we're having to retrofit an old building to make it compliant by today's standards. And let's chat about the strata conversions when they're renovated and also where you're likely to find them and what sort of prices they're going for. Because I've always thought that these beautiful art deco apartments, when they're done properly, they're kind of like tracking the price of a Big Mac.

[00:12:44] It tells you a lot about property inflation because they tend to have a similar price point because they're kind of condensed in Melbourne. You'll see them in the inner southeast. You'll see them around St Kilda, Elwood, Elsternwick, South Yarra. I've seen a couple in Moonee Ponds in Melbourne's northwest and I think I've seen one in Footscray, but they tended to be in those inner ring areas.

[00:13:08] But when you're looking around the southeast where they seem to be quite prevalent, you'll pay anything between 1.1 and 1.3 for a really nicely converted, renovated two-bedroom art deco, won't you? Yep, absolutely. I think for a long time the art decos were actually the prized possession, you know, particularly for advocates.

[00:13:28] When their clients were purchasing an apartment, we would usually steer them towards an art deco where possible because they held their value and increased in value. Whereas we haven't up until recently seen great growth in the apartment market. And that's probably something we'll dive into in more detail in another episode. Whereas the art deco scene was always well received and moving forward in prices.

[00:13:53] But I think you do have to be careful if you see something out there that's really undervalued and seems quite cheap. It should be a signal to probably look at one of three things. A, does it have parking? B, is it too small for a bank to lend on it? But thirdly, is it company share? Because if it's really cheap, chances are it is a company share. And let's chat about some of the downsides to company share and stratum or art deco era apartments in general,

[00:14:22] because you've already named a couple of issues. Let's talk about the car parking. Yeah, well, quite often you'll see, particularly around Elwood, you'll see a lot of cheap art decos and you can get quite excited. You click on the listing as quickly as possible and then your heart sinks because you see it's got no parking. And then you open up the listing and then you see it's company title and you're like, oh, that's why it's so cheap. I mean, we still fall for it, even though we've been doing this for as long as we have.

[00:14:50] I don't know about you, but I still get excited and go, why is that so cheap? Exactly. The lack of car space, it's an issue. And sometimes the developer or the company doing the conversion will get permission to not create the same number of car spaces on title as residences, which, you know, it's a tricky ordeal at the best of times because our local planners like to say that we've got at least one car space per apartment when we're doing a subdivision. But they do make allowances for these gorgeous old things.

[00:15:20] Sometimes they'll find a way to paint a space on the common area. And so three people get a really nice garage and then three people get a crummy car space. Other times you've got three apartments that just get sold as stratas without a car space. And that's an issue in itself, because if there are parking restrictions and you've generally got streets where you have lots of blocks of apartments, it's really hard to get a car space.

[00:15:44] So it's not for the faint hearted and you've got to think about resale value if you're buying one without a car space, even if you ride a bike and you don't care, it will have an impact long term. Yeah. You know, our very first episode, we spoke about bargains. And I think this situation illustrates perfectly the difference between a cheap property, which is cheap for a reason and an absolute bargain, because this is not a bargain. It's cheap for a reason. It's cheap because you can't get funding easily for it. It's cheap because there's no car park.

[00:16:13] It's going to knock a lot of buyers out of the mix when you're looking to resell it. And whilst you might think, I'm going to live in the property for 20 years, life does have a habit of changing and it always changes when you're least expected. And so I think you've always got to think about that risk and that downside, because if you do need to leapfrog into a different asset, you want that gap to be as small as possible.

[00:16:38] And if your Art Deco apartment without a car spot and a company share title hasn't really grown much at all in value and the rest of the real estate market around you has grown, say, 6% per annum for five years, that gap is incredibly wide to jump from the Art Deco into a surrounding property in the same location. That is so true. So true.

[00:17:03] And there are other things about these era properties, and I know I'm blurring lines here because we're talking about title types, but they're almost always Art Deco era. You've got one big room. You've got one small room. You've got a gorgeous old brick building that probably has had work required at some stage, whether it's movement cracking, which Elwood is notorious for because it's on canals. Or you've got, you know, re-blocking required because you've had movement for other reasons or the mortar needs replacing.

[00:17:31] There are lots of little things and big things that can impact these properties. And when the plumbing goes in these, it's an absolute nightmare because you're dealing with old terracotta pipes. So they are like a gorgeous old car. They need a lot of love and sometimes a lot of money. But what we do know about them is when they're looked after properly and they're converted, they definitely hold their value. They outperform other apartments in the same class.

[00:18:01] We'd love to hear how some of our tips are helping you on your property journey. If you'd like to get in touch with us, jump onto our website, themelbournepropertyhour.com.au. You can either leave us a written message or you can record it as a message. Let us know what you'd like to hear more of and tell us a little bit about some of your successes. If you're enjoying the show, please tell your friends and click the follow button on your preferred podcast platform.

[00:18:25] So we talked about strata title being the optimal title choice because it's widely accepted. You can get funding for it easily from the banks. You could borrow potentially up to 95% depending on the bank's limits for that location and property type. And then we've talked about company share being at the other end of the spectrum. And so then we've got this little hybrid type title that sits in between the two of them.

[00:18:54] Do you want to explain a little bit about what strata means and where that sits in between those two options? Yeah. I remember drawing this out for one of my staff and explaining it with a little model. So a developer comes along, buys a block of land, puts it in the company XYZ Proprietary Limited, builds a set of apartments on it in the same company name. So XYZ Proprietary Limited owns six apartments on this block of land.

[00:19:22] They decide to sell shares in their company to six people. So the shares are fully owned by the six residents. And they might not necessarily be a similar share parcel. So if some of the units are one beds and some are two, then the two bed people will have more shares. And when it comes to voting rights, they'll have a heavier vote. So let's imagine the same developer buys another block of land, ABC Proprietary Limited, and then builds the units and has them all subdivided.

[00:19:52] So he's selling a unit space to six different people, but he hasn't subdivided the land. So there's no equal and undivided ownership arrangement of the land. It's still in ABC Proprietary Limited, but everyone owns their own unit. And so they then need to have a management company look after that land because it's owned by the company and all six residents own a share of that company.

[00:20:17] So they own a share of the land of a company and they own their own apartment. The bank looks at that and says, well, we still don't love it because, you know, we don't own the land. We only own the apartment. And then you're engaged with all of these other owners in a company arrangement for the land. So we're going to treat it the same as company share because we haven't got the full security. So that's the hybrid arrangement. That's the stratum title. Yeah.

[00:20:46] And you run in, like you said, you run into similar issues as the full company share, which is that the banks don't love it and you are restricted with the lending. I remember many, many years ago when I did a property course and the person who was taking the course, who's delivering the course said, you know, what types of properties should you be buying? And the answer was the ones that the banks love. Totally. I mean, there's a case for deliberately buying something the banks don't love and turning it into something that they love.

[00:21:15] And there's a lot of upside with that, but there's also a lot of risk. And most of our listeners who are home buyers looking to purchase in Melbourne or investors looking for A grade safe investment properties in Melbourne or Victoria are not that bullish when it comes to risk. And they're usually looking to listen to our podcast or work with us because they're trying to remove risk from their purchase. Yeah, that's a really good point that you raise.

[00:21:40] And I remember years ago, I wrote a blog about the difference between stratum strata and company share and also how they can be converted successfully. Not that I was telling people that they all can or how to do it. I was just saying that they can be and I've seen it. And my phone ran hot. I got lots and lots of emails. It's still one of the most read blogs after all of these years. And the point is the people that were reaching out to me were doing so in a bit of a panic.

[00:22:07] They weren't doing it because they had this fabulous opportunity and they were gathering information. They'd bought something and weren't aware of it. Some of them had bought at auction and all of a sudden they're stuck with this thing, thinking that they can do a conversion easily. And it's not easy. The other thing I haven't touched on is you need it to be a unanimous decision. So if you've got a block of 12 and 82-year-old barrel upstairs says, I haven't got $20,000 or $50,000 or $200,000 to do this thing.

[00:22:36] I'm really happy staying in my company share unit. And I just wish you guys would stop because it physically is no different to me. Well, the problem with this, there's not just one barrel. There's lots of barrels. And even in our block, we had to shout a barrel because she didn't want to be in on it and didn't have the money to do it, but was willing to vote for it knowing that her cost was covered. But if that was $100,000 per head, I wouldn't have been so excited about sharing that cost. So it's something that people have to be really aware of.

[00:23:06] You don't want to find yourself in this situation. Then you're scrambling to convert it. And worse still, some of the people that reached out to me were hoping to convert it before it settled. This thing can take a year. It can take more than a year. It's definitely not going to happen in 60 days. Had they realized that they were purchasing in one of these stratum or company share situations, or was it something that they became aware of after reading your blog post and then they've panicked?

[00:23:33] Yeah, I've had quite a few people over the years reach out and the vast majority have purchased unknowing. Oh, geez. I think it's a real, real risk. And we'll segue for a second because it's really important, I think, for listeners, particularly when they're first home buyers, because, you know, you guys have saved really, really hard and every single penny counts. And to lose any money or make a poor decision, it can really set you back for another decade.

[00:24:02] And it's quite devastating. I've had a situation recently where one of my clients actually owned a property in South Melbourne that was an apartment block. I actually used to live in that apartment block. I rented there. And there's some catastrophic building-related issues happening with that particular complex. And it was in excess of a million dollars worth of repairs for just one of the sections of the building. And so there was a small amount of owners that were impacted.

[00:24:32] And the owners corporation had to take out a loan with this small group of owners to cover the works that needed to be done. And so effectively, each of the owners assumed about $100,000 or $150,000 worth of additional loan on top of whatever it is that they owed the bank for their own property. And somebody put their unit on the market for sale.

[00:24:59] A young first home buyer rocked up to the auction, saw the property for the first time, put their hand up and purchased the property and had no idea about the $150,000 liability she was putting her hand up for at auction that day. Right. So if she doesn't service that additional loan, the bet just won't go through. Yeah, I'm not sure what will happen there because the body corporate got the loan,

[00:25:25] but a specific group of owners associated with that because this particular building has a few body corporates. And so there was a small owner pool for the whole complex that were responsible for that loan because it was a part of their actual building that the works needed to. And so the loan was already in place, but she became responsible for part of that loan as a unit holder in that complex. Yes, right.

[00:25:54] So it can be quite devastating. I mean, she had no idea. She had no idea. And without wanting to scare off anyone, I do want to talk about the worst case scenario financial situation. If someone puts their hand up at auction without getting a contract review and without knowing that they're looking at an alternative title type, I want to talk about what could go wrong. And let me say that when you go through the steps, the proper rigorous due diligence steps,

[00:26:22] particularly around getting a contract review, you can avert this crisis. So it's only something that can happen when someone is either not getting a proper contract review or they're just throwing all caution to the wind and arriving at a property on auction day and bidding without having had any kind of prior discussion around DD. But let's say someone buys one of these things for, let's say, $650,000. And they're thinking it's amazing because they're looking at all of the, you know,

[00:26:51] the $900,000 ones and imagining that this would be an amazing bargain. It's not a bargain. It's a bad buy, but they bid to $650,000. They have to put down a 10% deposit. So $65,000 down. And then they discover that it's got a title type that the bank won't take. And not only their bank, but any other bank. So the mortgage broker scratching their head saying, I just don't know how to make this happen. We can only get you a 60% on VR. Have you got some family that can kick in?

[00:27:20] You know, you're looking at that stage for an additional $320,000 from family. That's a very generous gift and a lot of loose change that a lot of people don't have. So let's say they get closer to settlement date and they realize they can't make it work. And the property has to go back on the market and be resold. They've lost their $65,000, which is devastating. And if the property can't reach a price that doesn't leave the vendor disadvantaged, they're potentially liable for additional costs.

[00:27:50] And they're reselling costs as well. Hmm. That's a bad day. And in that scenario, it is very likely the property wouldn't achieve the same price again if it was resold on the market within a short period of time. Yeah. Because people scratch their head and say, why, what's wrong with it? It's a nightmare situation. This is probably something that we'll delve into in another episode. But while we're on the topic, we talk about due diligence all the time.

[00:28:18] And I know that you and I have a very similar approach to due diligence. And we have a very, very structured framework that we work through for our clients. Out of curiosity, how long does it take your team to work through all of the due diligence or how many due diligence points do you guys actually work through for your clients before you say to them, you're ready to purchase? This is safe. You can proceed. It's a great question because it does depend on the property.

[00:28:45] And when we're talking about units or we're still art deco units, because as beautiful as they are, they're like pinot, they create a lot of work and they're expensive, but they're great. I get really nervous if someone wants to purchase something on a Saturday and they're telling me after Tuesday lunchtime that they want to do it. I'm nervous because that's putting us under really intense pressure. Can we get it all done? I'd say 80% chance. Yes.

[00:29:12] And that's not just finding someone to do the contract review and getting a building inspector. That's us catching the strata manager. That's us going through all of the minutes. It's talking through all of the things that the building has going on that we can relay. And obviously we've got to cross-check that with the building inspector so they can look out for the same things and comment as well. I want to look at the neighboring blocks. I want to look at the parking situation. There's a lot there.

[00:29:40] I'd say comfortably, I need a week. Uncomfortably, three and a bit days. Yeah. So I think we worked out at a minimum when we go through our framework, it takes our team collectively five hours to go through the minimum stack of due diligence items. And then depending on what we uncover in that process, it can take many more days afterwards.

[00:30:05] Like we could, as a team, we collectively could spend four hours a day on multiple days working on resolving a due diligence item for a client to ensure that it's a safe purchase. So it can really, it can really just strip all, like all of the resources go to resolving the issue so that the client can move forward safely. And it can turn our whole day upside down, particularly if we need to be dealing with council or authorities.

[00:30:34] I mean, that's, I lost a deal recently, actually, that I was looking at purchasing for myself. And it was because I couldn't get onto the authorities as quickly as I needed to and get the right people in those authorities, like the water authorities, for example, council, electricity, the rest of it. I could have purchased this property free auction for an amount that would make this deal a profitable deal for us to flip because I couldn't get the answers I needed.

[00:31:01] And it was, it was really important because depending on the answers, we'd be out of pocket a hundred grand. So it was imperative that we got these answers because it was the difference between the deal stacking or the deal sending us broke. And so we worked through, it took me a week and a half to two weeks to get all the answers. By the time I got all of the actual answers, the selling agent had a really successful open for inspection with a lot of groups through.

[00:31:27] And then suddenly I had three other buyers on the scene and suddenly I couldn't secure the property at the price that I needed to for it to work. I ended up having to go to auction. I was the underbidder at auction and it was all because of due diligence. How disappointing. That's the hardest bit, isn't it? It's when you're waiting on someone whose timeline is not the same as yours. You and I can move like lightning. We have to.

[00:31:52] But when you're waiting on council or water authority or a strata manager, they can be really difficult too. Some are great. Some will come straight back to you on email. Some will take your call. A lot of them will refuse to talk to the buyer or the buyer's advocate and they'll only take questions through the agent. And then they'll go at a snail's pace with very boring responses that are not giving you the detail that you want. And it can be really hard. You've then got to involve the agent, the vendor who can put pressure on them. And I'm not talking about asking for anything unfair.

[00:32:21] It's asking for clarity on special levies. We had one recently. It would have been a significant levy for our client to be dealing with, a $30,000 levy, if we couldn't establish that it had already been paid. We weren't getting clarity. So that will determine how far we can go with our bidding or whether we even want to get involved at all because it's completely contingent on their financial position and their ability to raise those funds over the short term.

[00:32:48] So the due diligence bit, like you, if everything went smoothly and the council answered me straight away and the duty planner was on duty, they weren't at lunch or taking calls tomorrow, I could probably wrap it up in a day with my whole team looking at it. But you're invariably dealing with all of these delays because you're waiting for people who have much longer service turnaround times. Yeah. And when I say five hours, it is all of us collectively working on it. It's not just one person working on it.

[00:33:17] So we've got an autoresponder that goes out to clients. You know, if we're not picking up our phone, it's because all the resources are going towards here for a client who's imminently purchasing. And these same resources will go to you too when it's your turn. But if you're not urgent for today, we might not get back to you until six o'clock tonight. So it's all hands on deck. That's for sure. Life of a buyer's agent.

[00:33:44] If anyone thinks we're swanning through properties and not sitting on hold with the council, I'm going to do a recheck, don't I? Yeah. Yeah. So I think that probably wraps things up nicely for those title types. And I mean, we covered the specifics of the title types and what to be careful of. But I think more importantly, where we ended was on something that you and I are very big on, which is ensuring people do proper due diligence before they walk forward with a property.

[00:34:11] So I think that's a really nice place to wrap things up. Well, I've got one little tip. How come aside from the sensory way that we can pick these things after, you know, decades of experience, we can land there and say, yep, it's got Art Deco features. It's missing a car park. I can just feel that this is not a strata property. There are some technical ways that you can check that out. You don't have to just pay for a legal review. You can get a hold of the contract of sale and have a look at the title.

[00:34:41] Now, if you can see there that there are shares on the title, that is definitely your red flag hint. If you can see that it's strata and you've got to go right through all of the particulars there to make sure that you're not missing something because you'll have a title associated with your apartment if it's stratum, but you'll still have shares associated with the land. You've got to make sure that you're not picking up something that has shares if you want to be sure that you're not buying into any of these challenging title types.

[00:35:10] Don't do this by yourself. I mean, you and I have purchased well in excess of a thousand properties in our careers. And I don't know about you, but I would never personally read through a contract and then proceed to purchase without having reviewed by a solicitor first. A thousand percent. All you're doing is just checking before you send it to your solicitor. Some people might pay, you know, a few hundred dollars for a review. If you're wanting to double check that you're not sending something through that's a red flag

[00:35:38] anyway, that's one way of doing it. But yes, I'm exactly the same as you, Lisa. No contract review, no purchase. Yep. So if the professionals are doing it that way, it's a sure sign that buyers shouldn't be rocking up at auction last minute, seeing the property and then putting their hand up. Not unless they've got their solicitor on speed dial. A hundred percent. So good catching up with you. And you as well, Kate. Look forward to our next session. We'll talk again soon.

[00:36:05] Thank you for joining us on today's episode of the Melbourne Property Hour. We hope you've enjoyed the show and we look forward to you joining us next time. We've got to do something for Jamie. Given that we are a Melbourne-based podcast and that you often talk about coffee, why did the coffee file a police report? Oh, I don't know.

[00:36:36] It got mugged. It's not that great, but. Love it. We're warming up. Jamie's going to love our crazy jokes. We're warming up. I've got a little list here. I've got a list for Jamie. Jamie.