buying before selling PPOR and conditions on offer

M

maddysmum

Please play nice- very new to this!!
We have our PPOR on the market, first open home tomorrow. We have found a place we a very keen on near the beach. It will be our PPOR for about 3 years while we renovate then will use equity to get next PPOR and rent beach house out.

My question is regarding putting an offer on the house with conditions of building/pest/finance and the sale of our current property. When we purchased this place 9 years ago, it was 14 days to sort finance etc, but how long do you give to sell current house? Or is it indefinite? ? Also, our deposit is tied up in current house as equity, looking at getting around 70k profit when we sell, but have pretty much zero cash available at the moment. I'd like the offer to be a fair price for both parties but not to be laughed at if we then have ridiculous conditions attached.
The beach house has been on the market for 6 weeks and only 4 people have been through, none making an offer. The owner is an investor looking to sell so they can make next purchase. Would you, as an investor, accept an offer with those conditions if the price was fair/ close enough to what you were asking?? What happens to the contract if our house takes forever to sell? Would you rather sit and wait it out for someone cashed up and ready to go?
Thanks for your patience with me!
 
I've not heard of anyone taking a contract subject to sale for many years. That seems to have disappeared along with conjunction sales, you just don't hear of them.

Having said that, we nearly accepted a "subject to sale" contract recently, but only because our "cash unconditional" buyer decided after signing but before paying the deposit that he had changed his mind :rolleyes:.

We found a back up contract two days later, same price, subject to building and pest and subject to sale. The ONLY reason we would have looked at this offer was that we were in a bit of a pickle and the house they were selling was going to sell quickly (good price, good position, much interest).

Turns out our original buyer pulled his head in after speaking with his lawyer and stopped mucking about and paid his deposit.

As a vendor, generally, I would not consider a subject to sale.
 
Hi Maddysmum

Welcome aboard :)

You can make you offer subject to anything - however, I think you'll have troubles having it accepted subject to the sale of your current home.

However, the lack of interest in the property you're looking to buy is a positive sign.

If you had more equity in your current home you could look into other options - accessing equity, bridging, etc.

Another option (and this doesn't work for everyone) is to obtain a gifted (or borrowed) deposit from a family member to cover the deposit/costs on the second property. You could purchase it and rent it out (if borrowing capacity permits) whilst your property is on the market. When your property sells, you can move into the new property.

Cheers

Jamie
 
Thanks for your replies. I think we are trying to rush in too quickly on this one. We had looked at the option of bridging loans etc, and we dont have enough equity to purchase as investment and rent one out.
While I will be disappointed at the missed opportunity if we can't sell before someone else snaps it up, it's not the end of the world.
Our neighbour's just managed a concurrent sale/purchase last month with a condition of them selling their place in their offer. Theirs sold after 12 days on the market for a great price and had both settle on the same day.
We are taking a second lookie through the beach house tomorrow so I think I'll put it to the agent and see what happens. You'll be able to hear the laughter all the way to timbuktu!
Here's hoping we get an offer at our open tomorrow! A girl can dream, right?
 
Whilst I don't think many vendors would accept it, I agree it is worth asking, and also think about offering a long settlement, but offering without the subject to sale. Our son has just had a five month settlement accepted which gives him time to sell before having to settle. It suits the vendor to know the sale is unconditional, and who knows, your beach house vendor might be happy with an unconditional sale even with a longer settlement date.

Good luck.
 
yahoo said:
Subject to sale still quite common here. Vendors will generally only accept a close to asking price offer though and will put a 48 hour clause on (if another purchaser make an unconditional offer you have 48 hours to make your offer unconditional)

http://reiwa.com.au/faq/faqs/pages/QA.aspx?Qid=5077
Click to expand...

Saw this scenario exactly a few weeks ago. It doesn't happen often, but subject to sale does still occur.

If you're going down this path, you'd be best to figure out how you'd purchase the new property in the event that you can't sell your existing house. In most cases this is surprisingly easy. Lenders are also more accepting of this type of scenario than a bridging loan.
 
Had a very interesting chat with the agent today. He didn't laugh his head off, which was a plus, and said vendor not in a hurry so it would be considered. Our selling agent also mentioned the 48hr clause and said at least then we were still in with a chance rather than not putting an offer in at all.
Off to see a conveyancing guy on Wednesday to suss out what to put in contract.
We could look at a longer settlement and if by then our place hasn't sold, it's not out of the realms of possibility to use equity in current ppor for deposit and then rent it out. Plenty of options and I'm hoping it all comes together eventually.
 
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
S
Lowball offers, questions.
2
Replies
25
Views
9K
Big Will
B
L
Aggressive offer strategy
Replies
13
Views
3K
cadence
C
J
Tricky one for the brokers
Replies
6
Views
2K
jusm
J
T
Warning: This is the story how NOT to change houses
2
Replies
36
Views
6K
Tillie
T
Back
Top