Buying process - what to sort out before agreeing on the price?

[tempura]

I am a noob so please do correct me if i'm wrong

Before we start with Contract Exchange .... and even before we agreeing to the price, we need to do this due diligence:

• Building and Pest Inspection
• Strata Report
• Amendment on Title (If Any)

Is this correct?

If so, I would assume it is the normal process to advise the sales agent that we need to do those things before we agree onto the price?

Or will the agent get agitated with the above? Would it be possible that they want us to put in deposit first, even before doing those above? Would you recommend me to:

• Do all the inspections first before putting any money
• Put Money with cooling-off conditions

?

 

[Propertunity]

I wish I had a $ for every time I posted this

There are 2 ways to purchase property in NSW (excluding auctions, which are pretty much the same everywhere):
Way 1
1. Sign a contract in the REA's office & pay 0.25% deposit. 5 business day cooling off period begins.
2. Do pest, building, strata search (if a unit), finance approval within 5 days. Seek, but don't necessarily gain, an extension of time if there are hold ups getting this done (quite common at the moment).
3. All good? do nothing - day 5 @ 5:00pm, pay up the balance of 10% i.e. 9.75% and contracts are formally exchanged by default
4. All not good? i.e. termites found and you want to pull out. Rescind the contract and forfeit the 0.25% deposit to the vendor
5. If contract not rescinded, then settlement in 42 days later (typically)

Way 2
1. Make a written or verbal offer. Written offer has clause such as "finance approval, building and pest, settlement period", verbal the same.
2. If the vendor accepts the offer (written or verbal), finance approval, strata search, building and pest inspections are initiated
3. Vendor's solicitor issues contract to your (purchaser's solicitor)
4. All good? Sign contracts, pay 10% deposit. NO cooling off period applies. Your solicitor signs a 66W form acknowledging that he has explained to you that no cooling off period applies.
5. Contracts are exchanged
6. Settlement in 42 days later (typically)

Only under Way 2 are you open to being gazumped. This can happen at any point up until points 4. & 5. i.e. the other purchaser could buy the property before contracts are exchanged and you would miss out.

 

[tempura]

Only under Way 2 are you open to being gazumped. This can happen at any point up until points 4. & 5. i.e. the other purchaser could buy the property before contracts are exchanged and you would miss out.

But if under way 2, point 2 where the vendor has accepted the offer, wouldn't it be off the market already?

 

[Propertunity]

But if under way 2, point 2 where the vendor has accepted the offer, wouldn't it be off the market already?

Nope. A verbal offer and acceptance (in NSW) is not worth the paper it is written on.

 

[tempura]

Nope. A verbal offer and acceptance (in NSW) is not worth the paper it is written on.

ok thanks.

Will it be possible to submit a conditional offer (subject to: valuation, building & pest inspection & strata reports)?

The condition would be: to get 100% deposit back if there is an issue with any of those 3.

Is this common to ask?

 

[Propertunity]

ok thanks.

Will it be possible to submit a conditional offer (subject to: valuation, building & pest inspection & strata reports)?

The condition would be: to get 100% deposit back if there is an issue with any of those 3.

Is this common to ask?

Look you can make any kind of offer with any T&Cs that you like. BUT no agent is going to recommend their vendor to accept it. It would be perceived as being a very weak contract. Not the sort of thing to be doing in a sellers market. You can get away with that type of strategy if the market is very quiet.

 

[tempura]

Look you can make any kind of offer with any T&Cs that you like. BUT no agent is going to recommend their vendor to accept it. It would be perceived as being a very weak contract. Not the sort of thing to be doing in a sellers market. You can get away with that type of strategy if the market is very quiet.

Ok obviously after haggling price with this particular agent, he suddenly stopped replying back to my last offer.

There were approximately 5 emails before this last offer, where he would reply almost immediately but not for this last offer.

Either he is now baiting other seller to beat my offer or he is simply just in the toilet for the past 2 hours.

What would you recommend me to do at this stage? Shall I give him a deadline to reply to my offer?