Property purchases can often be a difficult prospect, as you juggle the practical issues of conveyancing with the dreams of owning your own home. Real estate agents are aware of your weaknesses when it comes to a new home purchase and when they think they have you on the hook, they will advise you that the only way to get the house off the market will be to hand over a 0.25% deposit and sign on the dotted line (often an online signature will do the trick). You may be told “don’t worry” you have a “cooling off period”. But there are some things you should know before you jump in and sign.
Once you exchange contracts, you will be stuck with the terms of the contract you have signed. If you complete your building and pest inspections (and other inspections such as survey if required), and you identify an issue, your only option will be rescind the contract and lose your 0.25% deposit. However, if you waited, you could have simply added special conditions to the contract or renegotiated the price to take into account the issues identified in these reports. Often these reports can be obtained within days of request.
Do you need a longer cooling off period?
You may need more than the standard five day cooling off period. This may be the case if you need to organise finance, need additional time to obtain the 10% deposit (payable at the end of the cooling off period) or you would like additional time for building, pest or survey reports to be completed.
What does the contract say about the settlement date?
Is there an overly long or drastically short settlement period. You should consider whether the date suits you and, if not, negotiate to have the time lengthened or shortened before signing. Things to consider are whether you need to give notice in your current rental, whether you need to settle on your own home before purchasing, whether you have time to get a removalist and most importantly, whether there is a gap between when you move out of your current home and move into the new home.
Are there special conditions?
You may want to consider whether the purchaser has added special conditions to the contract and what impact those special conditions have before entering into the contract. Often these special conditions take an experienced eye to review and interpret.
Can you afford to lose your deposit if you would like to rescind within the cooling off period?
You should consider whether you are happy to potentially lose your 0.25% deposit if you change your mind. You may also lose the cost of building, pest and survey reports. If you are unsure, then you should consider taking extra time before potentially losing thousands of dollars due to a perceived fear of missing out. Buyer’s remorse is a common feeling when we make quick decisions, especially where a real estate agent is using every trick in the book to get a quick signature (I’ve never met a buyer who wasn’t told by the real estate agent that there was someone waiting to sign if they didn’t).
Getting legal advice first
We recommend that before you sign a contract, you have a solicitor review the contract and discuss your options around inspection reports, settlement dates, cooling off periods and special conditions. Getting this advice may save thousands of dollars on a lost deposit and your time where the contract does not fit your needs.
You may be surprised how quickly we can review your contract and provide advice to make sure that you are making a well-informed decision. If you are considering a home purchase and have a pushy real estate agent, feel free to call Hulin Chadwick on 02 4934 6899 or book a free consultation here.