Am I getting screwed around with? Do I need to worry?

[klassen]

I'm really confused here.
Have we a bad decision? Are we in a cooling off period? I think not but there seems to be some conflicts.

Ok so my wife and I like this property and we made an offer by email to the REA.
We offered 417k, was told vendor wanted 430k.
We counter offered with 420k when meeting the REA.
When meeting the REA, there were two blank contracts of sale (only the first pages though) wherein we filled our name, address and conveyancer details along with the purchase price of $420k, deposit $42k and balance of $378k. No date however was filled in on the form. Or at least the form that we have.
We also paid a 0.25% holding deposit.
This was last Friday at lunch time

REA sent a text message around 11pm that night saying that the offer was accepted and that the vendor signed the second copy that the REA had.

There was a clause in the contract that we wanted to strike out however was told that these first pages don't actually imply an exchange of contracts and that our conveyancer would be forwarded all the necessary paperwork so as to undergo a formal exchange and negotiate clauses, etc.

Spoke to my conveyancer on Monday and s/he had received no contact from vendor's solicitor. Was told today by REA that they were in court all day yesterday.

Spoke at 6pm today with my conveyancer and all that s/he has received was a blank contract of sale late this afternoon and a request to complete a 66w. From that I assume that I am not in a cooling off period and no exchange has taken place. If so where exactly do I stand?

Tomorrow my conveyancer will get in contact with vendor's solicitor and if they don't agree to a cooling off period and do not agree to strike off clauses then can I rescind my offer and get my 0.25% back?
One clause specifically is that the purchaser agrees to pay for any special levies prior to exchange of contracts. Obviously not in my best interests and without a strata report who knows what we may be due to pay if we were to sign such conditions.

My conveyancer is notoriously busy and difficult to get a hold of. They have yet to arrange a strata report. I was hesitant to sign the front page of the contract on Friday without being given the okay by my conveyancer. My conveyancer was told by the REA that this process is how this particular REA goes about things and that on Monday we'd be able to strike out clauses, cross out the land tax agreement and whatnot.

 

[alexlee]

No date however was filled in on the form. Or at least the form that we have.
We also paid a 0.25% holding deposit.
This was last Friday at lunch time

Why didn't you fill in a date yourself when you signed it?

My conveyancer is notoriously busy and difficult to get a hold of.

Why did you choose this conveyancer then?

My conveyancer was told by the REA that this process is how this particular REA goes about things and that on Monday we'd be able to strike out clauses, cross out the land tax agreement and whatnot.

Why did you sign if you weren't sure and why did you take the word of the REA, who doesn't work for you? How do you cross out clauses after you've agreed to them by signing the contract?

 

[see_change]

I would be reluctant to sign a contract where the purchaser agrees to pay any special levees prior to settlement . I'd want a very good reason . The fact that the clause is there makes me highly suspicious.

We've just signed a contract for an OTP where they wanted us to be responsible for BC fees for the period the BC was formed up to settlement. We questioned this and amended the contract . The vendors didn't complain and accepted it.

Sometimes lawyers deliberately put clauses in there that are unreasonable so the opposition lawyer has something to complain about . They then back down and because the other lawyer has had a win , they don't go looking for other things.

When we did a subdivision , our lawyer put in a clause saying the other side would be responsible for the cost of any fencing between the two properties . I said that seemed unreasonable . He gave me the above explanation . They complained about it and we agreed to split the costs. They didn't raise any other concerns .

When the market is hot it's tempting to rush in and not worry about " little " details , but you need to pay attention to those things.

That clause could be quite expensive

cliff

 

[klassen]

Ok. In response to your questions.

Why didn't you fill in a date yourself when you signed it?

I only just noticed that there was no date on the contract.

Why did you choose this conveyancer then?

This conveyancer comes recommended from a friend who has purchased 8 properties with him/her. I did not know of such a reputation until actually dealing with said conveyancer. An old colleague who is a broker has confirmed such when I asked him for some general advice.

Why did you sign if you weren't sure and why did you take the word of the REA, who doesn't work for you? How do you cross out clauses after you've agreed to them by signing the contract?

Because the REA spoke with my conveyancer and stated that the chance to negotiate and strike out clauses would occur this week as this was not an exchange of contracts and was to simply to take the property off the market.
That this contract did not confer exchange due to being handwritten and not completed by a solicitor / conveyancer in a typeset.

This is our first property and this is the first time, we've actually put down a 0.25% holding deposit. We're both unfamiliar with the process and as stated I was hesitant to sign last friday but after being given the okay by my conveyancer, then I did. Almost all properties we've been interested in have gone to auction which is a different process altogether.

From the email by the vendor's solicitor to my conveyancer and the request to sign a 66w. To me that implies simply, we haven't exchanged contracts. The copy of the contract that I signed and kept on Friday does not have the vendor's signature on there. Don't we both need to have an original copy signed by both parties to constitute an exchange?

If not and we have entered into a cooling off period and have put ourselves in a position so as to not be able to strike out clauses and whatnot, then it can be a $1050 lesson if we need to rescind. I just want to know where exactly we stand.

We signed the front page of the contract and the only other pages we have go up to section 10 of Land-2005 and no further, how could it be an exchange without a complete contract of sale with the actual clauses page....

 

[klassen]

Additionally in the text message that REA sent to me on Friday she stated that a colleague's client offered $430k later that afternoon but as we had made on offer for the property first and put down the 0.25% deposit, that we would proceed and that the colleague's client would be placed on waiting list.

See this is the thing.
I can understand that this REA wants the commission and this colleague "real or not" but as a vendor wouldn't you accept the higher bid regardless or first come first served, especially if no exchange of contracts has been made?

In the text message REA states to contact our conveyancer on monday to sign the full contract for exchange.

 

[see_change]

Additionally in the text message that REA sent to me on Friday she stated that a colleague's client offered $430k later that afternoon but as we had made on offer for the property first and put down the 0.25% deposit, that we would proceed and that the colleague's client would be placed on waiting list.

See this is the thing.
I can understand that this REA wants the commission and this colleague "real or not" but as a vendor wouldn't you accept the higher bid regardless or first come first served, especially if no exchange of contracts has been made?

In the text message REA states to contact our conveyancer on monday to sign the full contract for exchange.

Some people on this planet actually do the right thing , ie if they've verbally accepted an offer they will sign the contract regardless of whether they have a higher offer .

cliff

 

[Scott No Mates]

Ok.

From the email by the vendor's solicitor to my conveyancer and the request to sign a 66w. To me that implies simply, we haven't exchanged contracts. The copy of the contract that I signed and kept on Friday does not have the vendor's signature on there. Don't we both need to have an original copy signed by both parties to constitute an exchange?

Klassen,

according to this you are yet to exchange, so are not in the cooling off period. The S66W waives your right to the cooling off period and cannot be signed without legal advice from your conveyancer (most would highly recommend against this unless you have completed your due diligence incl pest & building inspections, finance approvals etc).

Yes, both parties need to hold a copy of the counterpart document signed by the other party to constitute 'exchange'.

SNM

 

[Terry_w]

I'm really confused here.
Have we a bad decision? Are we in a cooling off period? I think not but there seems to be some conflicts.

Ok so my wife and I like this property and we made an offer by email to the REA.
We offered 417k, was told vendor wanted 430k.
We counter offered with 420k when meeting the REA.
When meeting the REA, there were two blank contracts of sale (only the first pages though) wherein we filled our name, address and conveyancer details along with the purchase price of $420k, deposit $42k and balance of $378k. No date however was filled in on the form. Or at least the form that we have.
We also paid a 0.25% holding deposit.
This was last Friday at lunch time

REA sent a text message around 11pm that night saying that the offer was accepted and that the vendor signed the second copy that the REA had.

There was a clause in the contract that we wanted to strike out however was told that these first pages don't actually imply an exchange of contracts and that our conveyancer would be forwarded all the necessary paperwork so as to undergo a formal exchange and negotiate clauses, etc.

Spoke to my conveyancer on Monday and s/he had received no contact from vendor's solicitor. Was told today by REA that they were in court all day yesterday.

Spoke at 6pm today with my conveyancer and all that s/he has received was a blank contract of sale late this afternoon and a request to complete a 66w. From that I assume that I am not in a cooling off period and no exchange has taken place. If so where exactly do I stand?

Tomorrow my conveyancer will get in contact with vendor's solicitor and if they don't agree to a cooling off period and do not agree to strike off clauses then can I rescind my offer and get my 0.25% back?
One clause specifically is that the purchaser agrees to pay for any special levies prior to exchange of contracts. Obviously not in my best interests and without a strata report who knows what we may be due to pay if we were to sign such conditions.

My conveyancer is notoriously busy and difficult to get a hold of. They have yet to arrange a strata report. I was hesitant to sign the front page of the contract on Friday without being given the okay by my conveyancer. My conveyancer was told by the REA that this process is how this particular REA goes about things and that on Monday we'd be able to strike out clauses, cross out the land tax agreement and whatnot.

Your first mistake is using a conveyancer instead of a property lawyer.

Unless you have the vendor's signed contract in your hands you do not have a legally enforceable contract.

 

[klassen]

Thank you for all the responses.
Good to see we have not technically exchanged yet and as such we can perform our due diligence and if needing to rescind pull out and get our 0.25% back, I assume.

Your first mistake is using a conveyancer instead of a property lawyer.

Unless you have the vendor's signed contract in your hands you do not have a legally enforceable contract.

I should have consulted a property lawyer. Especially for our first purchase, in what is hopefully many to come.
What's done is done though and I just want to ensure where I stand.

Although no exchange has taken place as in we have not received the vendor's signed contract and they have not received ours, there are actual contracts signed by both parties, that are in possession of the REA.
As I stated, the copy we signed and have kept has no date on it, however the REA could have affixed a date to the copy she kept after our meeting and when the vendor signed their copy on the same day.

Just say that this is the case and the REA was to deliver the contract of sale to both my conveyancer and the vendor's solicitor. That would imply an exchange of contracts, right? If so when would the cooling off period actually begin? From the date we signed it, i.e. Friday 6/9 or from the date of receipt of the contract by respective legal reps... i.e. if this Friday, then 13/9?

Does that make sense?

 

[JacM]

As Terry has pointed out, the REA must provide you with a copy of the contract within a certain timeframe or the contract becomes invalid. That said, it would have to be proven that you had not been provided a copy, and also the vendor might opt to purse things through a legal professional.

What state is the property in ? (VIC/NSW/other?)

 

[Meisterin]

From the situation described by you I think the date of the contract will be when he delivers both sets of the contract to the vendor's solicitor and when the vendor solicitor performs a proper "exchange", meaning that he ensures that every single page of the contract is exactly the same.

If you want to forgo the cooling off period then you would need to submit a signed 66w to the vendor's solicitor prior to him physically exchanging the contract.

When my parents' sold their property the real estate agent delivered an undated signed contract to my parent's solicitor and then he performed an exchanged and dated both contracts, and called my parent's to say that the contracts have been exchanged. The contract was signed by the purchaser over the weekend (the agent informed my parents) and the signed contract was delivered on Monday or Tuesday. Then my parent's solicitor sent the copy of contract signed by my parents to the purchaser's solicitor.

So the best way to find out whether the contract was exchanged is by calling the vendor solicitor. Then you'll know for sure.

Normally, good solicitors do not allow real estate agents to exchange contracts, as if both sets are not exactly the same, ie a page of the strata plan or s149 certificate is mission on one set, then any party not happy to the terms of the contract can rescind the contract any time before settlement because there wasn't a contract in place in the first place.

 

[robbiejuve]

Hi. I have a question about this topic.

My previous purchase went like this;

1. Submit offer (simple document signed by me, not the contract)
2. Go back and forth negotiating price
3. Offer accepted, I pay 0.25%, flick contract to solicitor, they give the OK, I sign contract and we exchange. Enter cooling off.

This is my understanding of how the process should always go.

Last week I put in an offer for a property in NSW and the agent replied "Many thanks for your offer, we will arrange for it to be submitted with the other 'signed contracts' received this week"

He seems to imply other people are submitting signed contracts and I should as well. I don't understand this request. Can someone please enlighten me? Would a signed contract trump my unconditional offer if the later was the highest bid on the table?

Thanks,

 

[Phiber]

Some RE agents like to make you come in and sign the first page of the contract as is supposedly is more convincing for the vendor that it is a serious offer. Of course since it is only the first page, it's a gimmick that does not engage the buyer in any way. Only when you sign the contract with your solicitor/ when your solicitor receives the full contract back signed buy both the buyer and seller, are the contracts exchanged.