Five things you should know about your property contract

Property, and contracts, can be a stressful situation - particularly for the inexperienced. Here are five quick things you should know about your property contract. If you have any tips, add a comment at the end.

1) Offers usually do best with an expiration date

Without an expiration date, you will need to rescind the offer or the seller can accept at any time. You can also use this time limit to dissuade the real estate agent from using it as a negotiating tool with other prospective buyers, as well as to show them you are serious about closing a sale quickly.

2) Just because it’s standard, it doesn’t mean you can’t modify it

Head to your solicitor and have them go through the contract with you paragraph by paragraph. While some elements are standard, there are many areas that provide plenty of flexibility allowing you to get the terms and conditions that you want. Never assume that just because something is the “norm” it means you can’t change it to get a better result for yourself. For instance, you may want to negotiate early access to the property or modifications before you move in, or you may want to provide extra conditions. You may make it subject to a valuation, financing, building and pest inspection or even an inspection of the latest body corporate records.

3) Settlement dates can make or break a deal

Typical settlement dates are 30, 60 or 90 days, but don’t feel that you can’t change this. The main thing to remember is the importance of the settlement date to both the vendor and the buyer. There have been many situations where too short a settlement date is the “make or break” factor for the seller, who needs more time to move on, and vice versa.

4) You can submit more than one contractual offer

If a seller is asking for longer in the settlement, and this doesn’t suit your plans well, you may look to offer an identical contract, but instead of for the 30 days proposed at $720,000, you might offer 60 days and $710,000. You can submit a number of offers for them to compare, that may secure you a better deal. You may also submit unconditional contracts along with one with a number of conditions, but with a lower price. This gives the vendor something to compare against and consider.

5) Chattels need a double-check

Chattels, or all those ‘extras’ such as window furnishings, blinds and appliances, deserve a mention in the contract. Do not necessarily assume that because you have seen it at the property it will be coming with the home – even if the real estate agent has told you that it will. Get this in writing, in the contract, in as much detail as possible.

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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