Is a written offer binding?

[salt]

Basically our situation is we are interested in two properties and we are waiting to hear back regarding one property if the owner is even interested in selling at this point.
If we put a written offer in on one property and it is accepted (but a contract is yet to be signed) are we able to back out of the written offer if the second property presents itself as a better opportunity? Or is the written offer binding?

 

[macca446]

Basically our situation is we are interested in two properties and we are waiting to hear back regarding one property if the owner is even interested in selling at this point.
If we put a written offer in on one property and it is accepted (but a contract is yet to be signed) are we able to back out of the written offer if the second property presents itself as a better opportunity? Or is the written offer binding?

Hi
Only signed contract is binding

 

[salt]

Cool. That's what I thought, just wanted to double check though.

 

[Terry_w]

Not really true.

A contract can be oral. However for property a contract is only enforceable if it is in writing. This doesn't necessarily mean a formal contract, but could be a back of the envelop thing if 3 or 4 things present:
1. Parties identified
2. property identified
3. price
4. - another P - which I forget now!

However with property there are statutory disclosures which need to be made - purchaser has to be provided with a s149 certificate in NSW for example. Failure to supply this doesn't mean the envelop contract isn't binding, but means the purchaser could pull out without penalty. But this can only be done within a limited time.

 

[salt]

Thanks for the reply Terry. I'm not sure if they need to do this in Tassie (where I'm currently located). He actually said to me that they don't display the house or block size when the house is being sold by the bank, which seemed a little strange. He suggested I go to the council to procure this information for myself.

 

[marg4000]

Usually to be binding a deposit should be paid.
Marg

 

[Terry_w]

No not true Marg. Consideration doesn't have to be monetary.

 

[wylie]

Usually to be binding a deposit should be paid.
Marg

We had this happen recently, cash unconditional contract and buyer didn't transfer deposit as promised. Decided he didn't want to buy after all .

After legal advice, and a few sleepless nights for us, he changed his mind and fingers crossed this settles. He said because he hadn't paid his deposit it was not a binding contract. Wrong. But it would have cost us to force him to settle and we wouldn't have done that.

It ruined any goodwill we felt towards this purchaser and gave me a few thousand more grey hairs. I won't settle until it does settle.

 

[impala67]

No not true Marg. Consideration doesn't have to be monetary.

...for every state or just Qld?

 

[Aaron_C]

...for every state or just Qld?

But with a contract the consideration is already paid without a deposit. The vendor's consideration is the property, the purchaser's is the price.

 

[Terry_w]

...for every state or just Qld?

Everywhere.

 

[impala67]

Everywhere.

& Aaron C

 

[ems]

We've just had a similar situation happen to us. Had a written offer by a buyer, we signed and accepted the offer and then the buyer changed their mind. Very frustrating..no deposit exchanged so I guess we are back to square one..

 

[redwing]

No not true Marg. Consideration doesn't have to be monetary.

What can it be Terry?

I'd always thought Offer, Acceptance, Consideration

PS: Whats the other P

 

[wylie]

This is a post I just made in the other thread running about this subject -

This is not the advice we were given when the purchaser changed his mind after signing a cash, unconditional contract and having his solicitor advise him and sign off that he had waived his cooling off.

However, he decided not to transfer the deposit on the day the contracts were signed, and wouldn't answer calls or texts from our agent the next day (Friday). Saturday, he sent her a text saying he had changed his mind, had not paid a deposit and there the contract was not valid. Legal advice we got was that he was quite wrong.

Luckily for us, his lawyer told him first thing the next working day (after we had a sleepless weekend) that he was committed to the purchase. I know he could have stood up to us and forced us to force him to settle. That still could happen I know, as it is not yet settled. But a least now we have a healthy chunk of his cash sitting in a trust account.

 

[Terry_w]

What can it be Terry?

I'd always thought Offer, Acceptance, Consideration

PS: Whats the other P

Consideration can for a promise for an act.
With property purchases the consideration is the money you pay for it.

Imagine buying a pizza. There are no deposits, you just hand over the $20. This is the consideration.

With property purchases it is the same, but just the time factor is extended to 42 days or similar.

It doesn't have to be monetary, but has to have value. e.g. If you give me that pizza I will wash the dishes for you for 1 hour.