Building and Pest inspection in Contract

[stargazer]

Hi all

Currently looked at a house that needs alot of work. Asking price $310,000.
Crunched some numbers and to make it work would need to get the house for around $285,000 Max offer.

The house has been on the market for about 4 weeks and has had no offers.

My first offer was $270,000
60 day settlement
Subject to: Finance/Building and Pest inspection.

Agent replies vendor wont accept that nothing under $280,000 will be presented.

Final offer on my part $282,000
30 day settlement
Subject to: Finance/Building and Pest inspection
Agent says I will present an expression of interest with subject to Finance only. I indicated i want Building and Pest inspection included. His reply well you have 48hrs cooling off period to do this. (The place is tenanted.)

I go along with it as it is only an expression of interest but indicate that i want Building and Pest inspection.

If the offer is accepted i do not want to sign the contract without that condition in the contract Subject to Building and Pest Inspection. Agent keeps saying you can do that in the 48hrs cooling off.

I haven't encountered this tactic before....

This property is a good price, for the area, location etc but without the building and pest inspection conditions in the contract i may walk.

Does the Building and Pest inspection have to occur during the cooling off period?

If its in the contract and the building inspection or pest inspection comes back very negative after the cooling off period can you still not proceed if it was serious issue?

This is in SA by the way 2 days cooling off period (Business days)

Regards
SG

 

[Aaron_C]

If it's not in the contract - it never happened. Although you can get a building and pest inspector through if you are able to negotiate access during the cooling off period so you can get out of the contract within the 48 hours

 

[rstephenp]

Blding & Pest

This I guess this is normal in SA. I am from sydney

I bought a property had the same condition. I did the blding and pest before the cooling off period finishes. If anything comes back bad, you can negotiate with the vendor and add it as an addendum to the contract. This is what happened with me.

regards
Steve

 

[locko24]

Don't you lose part of your deposit if you pull out during the cooling off period? Worth finding out!

 

[laurencei]

In the 48 hours you can pull out for any reason, and you get your full deposit back.

This is the best time to do your B&I inspection. There is no need to specifically add it to the contract, it creates unnecessary hassle. You can even book the B&I before you sign the form, so you'll have plenty of time.

 

[gm12]

In vic, you don't get cooling off period if you have taken legal advice for the property. I wil show the sec32 to my solicitor after signing the contract/offer.

Other important thing to know that in vic, we sign the contract of sale when making an offer. If the vendor signs it also, it becomes a contract of sale. The cooling off period starts from the date you sign the offer. So if the vendor takes 3 days to sign the contract, you dont have any cooling off period left.

I dont know about other states

 

[Aaron_C]

good advice gm12 - that is a very sneaky technical point that can make a huge difference

 

[Peter_Tersteeg]

If the vendor is adimant that they won't allow a building and pest inspection in the contract, my experience suggests that this is usually a cause for alarm.

In every case where the purchaser pulled out using these clauses, the vendor tried really hard not to allow them in the first place.

In SA the norm may be to get inspections done prior to cooling off, but if they can't be done in this period, pull out and re-write the contract to include the inspections.

Personally though, I'd simply tell the agent that if they can't abide by the inspections in the contract, then there's obviously something he's not telling you and thus you won't be making an offer.

 

[Aaron_C]

Well Peter most of the time vendors don't even know that have pests/termites in the house, but they don't want to lose a deal on the off-chance that they do have a problem...It's more a case of wilful blindness as opposed to deceit.

 

[Peter_Tersteeg]

Or sometimes Aaron it's simply the agent refusing to allow the clause because they know the property won't pass muster. The vendor may not be aware of the offer at all.

 

[laurencei]

Just to answer some posts above; in SA the cooling off period does not start until YOU are served with a Form 1. This is given after the vendor signs the contract of sale (I.e accepts your offer). You then have two FULL business days after you recieve the Form 1 to pull out.

Anything other than a contract of sale is basically meaningless. Some agents in SA get you to submit an offer as a single page expression. The problem is when the vendor 'accepts' this, you then have to fill out a contract of sale to make it binding, and the vendor might stall for another offer, so your wasting time.

You should just submit a contract of sale as your offer, skip all the other stuff. Some agents will push back, but only cause they are lazy and don't want to do all the paperwork.

When the offer is accepted, book a b&i for the next day. This still gives you plenty of time to get everything you need. If the b&i doesn't happen for whatever reason, just pull out of the contract. It's way easier than putting in clauses - because that creates issues around the wording of the clause etc (see other threads), plus IMO also adds some weight to your offer...

 

[stargazer]

Thank you everyone for your responses. I found the information a help to understand things better.

Regards
SG