Hi Beanz
Yes, I'd make sure you're 100% about the property before signing a contract.
Yes, some agents will try to sit on an offer if they believe another offer could be shaping up in the immediate future. I once had an agent tell me that she routinely sits on all offers for 2 weeks to see if she can illicit additional offers and create competition between multiple buyers. However, some agents need to use time to convince the vendors to accept your offer. Asking the right questions will help to understand if any delays are working in your favour or likely to work against you.
I'd also get some legal advice before signing anything. If it's a legitimate contract for the purchase of residential land in Queensland, it should have a Form 30c attached to it, which will warn you about seeking legal advice before entering into a contract. I'd highly recommend you do this. Many conveyancing folk never charge for reviewing a simple REIQ contract and generating conditions for you that have been legally reviewed.
Here are some things you might consider as part of a buying process:
1. Consider what you need in a contract
Talk to your finance provider and ask them how many days they need to process your approval. Check with your building and pest inspector to see when they can get through the property. Add at least 7 days to the highest of these two (will most likely be the finance) and that would probably be your earliest settlement date. In the end, you should check these dates with your conveyancing team.
Fortunately, pest folk are pretty available at the moment, due to the nature of the market, but it pays to check. Then, consider what else you might think needs clarification in the contract, especially in the 'inclusions' and 'exclusions' area.
For example, you might have 14 days for a pest inspection, 21 days for finance and 30 days until settlement (this is probably one of the most common combinations).
2. Talk to your conveyancing team and tell them what you think you need in a contract - they'll recommend whether you need any special conditions (things not covered in the generic REIQ contract). At this point, talk to them about how long you'd like to give the vendors to sign the contract.
I usually ask the agent how long the vendors should take to respond, so my request is reasonable - sometimes there can be reasons why they may take longer than 24 hours to reply... they could be overseas, deceased estate with 5 beneficiaries to sign and can be a logistical nightmare, etc. However, I'd never let it go longer than 3 business days.
3. Get the agent to prepare the contract. **DO NOT SIGN IT THEN**
4. Get your conveyancing solicitor to review the contract.
5. If all is okay, sign the contract which will then become your 'offer'
Property contracts must be in writing, so anything else is just banter.
Tip with your deposit:
I never pay a deposit on signing. Too much mucking around and if it doesn't go through, you have to go through the process of getting your money back. I recommend not paying an initial deposit.
Instead, I'd recommend making one deposit, which is payable within 3 business days after the contract date. That way, you're only paying a deposit when both parties agree that it's going ahead. I've never had anyone argue with this and it just makes life easier for everyone. Remember, if you miss a deposit payment, you're in breach of your own contract. Best to keep it simple.
Another point: Some RE agencies get you to sign an 'Offer to Purchase' document. It's usually a 1-2 page document and summarises all the important points to be included in your contract, but it won't actually be the contract itself. It's used to express your interest and is then usually replaced by the full contract when everyone sees eye-to-eye. I much prefer to use a genuine contract when signing, as it is more meaningful to the vendor when placed under their nose for a reply (i.e. if they sign, it's for keeps).
Good luck with your purchase.
