The "Oh", "Really?" and "I Wish I Had Known That!" of Making an Offer and Organising Finance
by Shannyn Hunter
Conveyancer shannyn@lawyersconveyancing.com.au
Lawyers Conveyancing
On Monday morning purchasers can experience a real estate hangover. After a weekend of elation at finding their dream house and pressure from the agent to make an offer, with hesitation they sign on the dotted line and their concerns about legal advice are pushed aside. They are locked into a contract. Unfortunately, the emotive attachment that causes you to buy a property can also cause you to forego certain protections when you make your offer.
SPECIAL CONDITIONS
Give yourself a way out.
A precisely worded finance condition can give you a way out if, despite your best efforts, your finance is rejected.
One of the worst situations is telling a client, who doesn’t have a finance condition and can’t get finance, that they will have to come up with the money for settlement somehow.
Specific pest and building inspection’s special conditions can stop you being saddled with a property that requires expensive repairs. To protect the purchaser a building inspection special condition should be to the purchaser’s satisfaction, not simply for major structural defects. Legal advice before you sign can assist you in wording special conditions effectively.
Don’t let the agent word them for you.
I’m worried when a purchaser says that they relied on the agent to word their special conditions.
Last week a client came to us for help after he had trusted the agent to word a building inspection special condition for him. A subsequent building inspection uncovered building works were needed to the tune of $20,000. When he approached the agent to end the contract, he was stunned to find that the agent was unwilling to assist him in using that same special condition to end the contract. The agent was even angry at the purchaser for daring to end the contract after making the proper investigations.
Ask your solicitor about the proper wording of special conditions during the pre-contract advice process.
For more information click on the link to view the entire article on the Lawyers Conveyancing Website.
6 Comments
“Banks can perform miracles”?
I suppose so in theory, Shannyn, but few conveyancing solicitors, conveyancers or conveyancing clerks to my knowledge anywhere in Australia have ever seen banks or other property lenders go too far out of their way for their customers. Most of us think it’s a miracle of sorts if a lender actually gets its act together in time. Perhaps things will improve when someone, whose contract has crashed, successfully sues their lender or outgoing mortgagee for the damages caused by that lender’s or mortgagee’s culpable disregard for their customer’s contractual obligations. Hell, sue the broker too!
Hi Shannyn
I agree that all purchasors should arrange their own valuations and pest and building reports.
There is legislation in at least some states that require a cooling off period. Maybe you could tell us about tehse, and in particular how they do or don’t apply at auctions.
Regards
Craig Brown
Evaluator.com.au
Hello Craig,
Thanks for the comment, most of the people I deal with are totally unfamiliar with the conveyancing process and so it’s good to be able to help people learn from other’s mistakes.
You will get more information on cooling off than I can supply in this comment by typing ‘cooling off’ into the search field above.
I appreciate the feedback,
Shannyn
Purchasers should always choose their own building and pest inspectors to avoid soft reports from inspectors recommended by their agents. A lot of purchasers assume their inspectors are also suitably qualified, licenced and insured, but don’t check or know how to check out the inspectors qualifications or licences. Clients should always ask for the individual inspectors licence numbers, professional indemnity policy and trade background to avoid Bob-cat drivers and bricklayers undertaking their building inspections. NEVER use one inspector to do both Building & Pest Inspections for you. They are most likely only truely experienced in one or the other areas. We are based on the Gold Coast and QBSA has a licence search facility for clients to do a licence history check for inspectors in QLD. We provide our Insurance, Licencen no’s and experience details on our web-site. There are many unqualified and un-insured cowboys in our profession and purchasers should protect themselves by spending 10 minutes doing a background check on their inspectors and don’t be shy asking for the licence numbers etc. Cheap inspections are cheap for a reason! Inspectors referred by agents and conveyancers are usually getting some kind of kick back for the referrals and usually are prepared to offer soft reports in return. A lot of franchise inspection companies also sub-contract out to inspectors that is why its important to always ask for your individual inspectors licence number. Purchasing a property is a huge investment so I would say to all purchasers spend the time and make sure your building and pest inspectors are qualified and have professioanl indemnity insurance to protect you and your investment.
Sue
Please explain your involvement in the process! Explain how you know “Inspectors referred by agents and conveyancers are usually getting some kind of kick back” or is this a guess. I am an Agent and have never received a kickback and only ever recommend qualified Inspectors who are totally unbiased. These guys are professionals and you have defamed them!
Come clean!!
The tricky world of the building inspection…This post comes in useful. I absolutely agree with Sue. We must avoid reports from inspectors recommended by their agents.