2 contracts issued - can someone clarify?

laurieload

laurieload

We are in a bit of a bidding war with another party and the REA has just rang to say the vendor is issuing 2 contracts to the both of us. This is out first NSW purchase so want to check if this is normal?

Want to do build and inspect but don't want to end up paying for these and conveyancer fees if they end up giving it to the other party...is the REA saying its a race to say whoever gets there first? Should we offer 0.25% to get it off market and if so is that binding? The numbers really stack up for us on this one and we don't really want to lose it.

How should we proceed?:confused:
 
Thanks Womble. I got the impression that the vendor is signing 2 contracts and seeing who can come in first. Can they do this in NSW?
really not sure what the hell is going on :confused:
 
Also, we do want a pest on this, so is it pointless to demand the vendor signs a contract now for us if no pest clause is added yet? NSW seems tricky and full of traps for young players...

Advice on what we should do from here would be much appreciated:(
 
Do building/pest report after contract is signed in the cooling off period.

Problem solved - just get it off the market first or you definitely won't but it.
 
In NSW each party signs a separate contract and these are exchanged. You can only enforce the contract if you have their signed contract and they can only enforce it if they have your signed.

So what they have probably done is issue a contract to each interested purchaser and are waiting for these to come back. They will then probably hang on to these and try to play you off against each other before accepting one.

You can exchange subject to xx which is not so common, or you can exchange and rely on the cooling off period which is 5 days. You could negotiate a longer cooling off too (or even waive it) as 5 days is not usually enough time. Usually if you pull out during the cooling off you forfeit 0.25% deposit.
 
Thanks so much JWR and Terry,

So to be clear, we get our conveyancer to have a quick look at the contract, sign the contract and given them a 0.25% bank cheque, tell them we are interested in another property and have XX amount of time to get it back to us signed, then if successful have pest etc done.

Have I missed anything/left anything out? How long would you recommend for XX? 24 hours upon receipt or is that too long?

Not inclined to let the REA play games with us, but don't want to lose this one either.
 
laurieload said:
Thanks so much JWR and Terry,

So to be clear, we get our conveyancer to have a quick look at the contract, sign the contract and given them a 0.25% bank cheque, tell them we are interested in another property and have XX amount of time to get it back to us signed, then if successful have pest etc done.

Have I missed anything/left anything out? How long would you recommend for XX? 24 hours upon receipt or is that too long?

Not inclined to let the REA play games with us, but don't want to lose this one either.
Click to expand...

Yes you could do that. You might want to argue over some conditions of the contract (ususally) and have it amended - but you have to weigh this up with the other party (if there is one) getting in first with a better offer. Once you have signed you are still at offer stage so you could withdraw anytime before exchange. And best not to give them your signed copy until the same time they have given you theirs. You could tell them you will withdraw your offer within 24 hours if they do not exchange.
 
Terryw said:
Once you have signed you are still at offer stage so you could withdraw anytime before exchange. And best not to give them your signed copy until the same time they have given you theirs. You could tell them you will withdraw your offer within 24 hours if they do not exchange.
Click to expand...

Terry, thank you for your most reassuring advice! :D
A final quick question - would we still give a 0.25% deposit with signed contract?

Anything else I should know to handle this situation well? This REA is an award winning sales director and great at his job!
 
Ok thanks - we give 10% deposit when they sign also, yes?

But now I am confused.. whats the point of the 0.25% deposit that people talk of for NSW if the contract is not binding until both parties have signed, and then you need a 10% deposit anyway?:confused: Feeling a little dumb here!:(
 
Alright, no worries JWR got it loud and clear, will pressure all I can to get a vendor signature within 24 hours of ours.

But for an apparent idiot (ahem..me.) please can you explain the point of offering the 0.25% deposit in NSW? I have read Propertunitys etc. very valuable posts and was of the impression 0.25% deposit would help to secure the property? What's the point of offering this if you need to give the 10% upon exchange of signed contracts anyway (or whatever deposit is agreed on?).

I do get you lose the 0.25% if pull out in the cooling off period..
 
laurieload said:
Alright, no worries JWR got it loud and clear, will pressure all I can to get a vendor signature within 24 hours of ours.

But for an apparent idiot (ahem..me.) please can you explain the point of offering the 0.25% deposit in NSW? I have read Propertunitys etc. very valuable posts and was of the impression 0.25% deposit would help to secure the property? What's the point of offering this if you need to give the 10% upon exchange of signed contracts anyway (or whatever deposit is agreed on?).

I do get you lose the 0.25% if pull out in the cooling off period..
Click to expand...

Buyer signs the contract, pays 0.25%. Buyer then has 5 day cooling-off period. After the 5 days the buyer pays the remaining 9.75% of the deposit (or the deposit as negotiated in contract).

If the buyer pulls out within the 5 day cooling off period, they lose the 0.25% deposit.
 
laurieload said:
Ok thanks - we give 10% deposit when they sign also, yes?

But now I am confused.. whats the point of the 0.25% deposit that people talk of for NSW if the contract is not binding until both parties have signed, and then you need a 10% deposit anyway?:confused: Feeling a little dumb here!:(
Click to expand...

A lot of agents talk about putting down a 'holding deposit' but this holds nothing and is meaningless other than it shows you have some interest.

The standard contract has it that the full 10% contract is normally paid on the making of the contract (cl 2. something). But this is also negotiable. If you don't pay the full deposit and nothing has beena greed otherwise then the vendor can terminate at anytime prior to paying the full deposit. So becareful if paying less even if during the cooling off period.
 
Ahh great, thats what I am after! :D

So, for NSW props that we really want to get off the market quickly we sign contract, give 10% deposit and a strict, short timeline for the vendor to sign/countersign also. Then we do B/P in cooling off period. Then if something nasty turns up, we withdraw in cooling off and lose 0.25%.

Do I capiche NSW properly now Terry and others?
 
Thats about it. You should also get your finance fully approved during the cooling off period. Maybe try to negotiate this to 2 weeks - but this could work against you if the other potential buyer is offering 5 days, or even no cooling off.
 
JWR said:
Do building/pest report after contract is signed in the cooling off period.

Problem solved - just get it off the market first or you definitely won't but it.
Click to expand...

JWR, I understand where you are coming from. But how much loads of cash would one spend on just signing contracts with 0.25% deposits to take properties off the market followed by B&P? It adds up you know!
 
MsAli I think if I understand Terry correctly the 0.25% deposit is worthless anyway for "taking something off the market" unless 0.25% has been previously negotiated to be the whole deposit - you may as well go for putting down the standard 10% (or whatever deposit has been agreed on) when the vendor signs. Then and only then do you sign up for inspections. Then at least the ball will be in your court, so to speak.

But someone please correct me if I am wrong...
 
Some agents will pressure you to sign and waive your right to the cooling off period, particularly when they are an "award winning real estate agent", and if there are several buyers interested. Then you would need to pay the 10% up front and have your inspections done prior to signing the contract.
Before you sign anything, make sure you speak to a solicitor/ conveyancer.
I would pull back a bit and dont let yourself be pressured into acting faster than you should. Just make a verbal offer and then see how things proceed from there. In the current market, there is not much selling very quickly (having said that, our house sold in under a week late last year, with 6 people putting in offers within 2 days of the first OFI..... so it can happen.
But if you lose this house, there will be another one which will come along.... so no need to panic!
 
Last edited:
You must log in or register to reply here.

Similar threads

C
Adding conditions to contract of sale on offer?
Replies
5
Views
2K
Catty
C
M
Buyer wants to cancel contract..can they?
2
Replies
23
Views
10K
Perp
Perp
H
Off the plan in Melbourne... withdraw issue
2 3
Replies
41
Views
7K
Terry_w
Terry_w
A
How long does it take for titles to be issued?
Replies
1
Views
1K
Terry_w
Terry_w
W
re Major Structural defect - undetermined
2
Replies
20
Views
4K
CosmicTrevor
CosmicTrevor
Back
Top