Unconditional offer

Apologies if this has already been answered already on this forum (i did search honest)

Can somebody define for me what an "unconditional offer" means in NSW?

I understand that a buyer can low ball with an unconditional offer, but does that mean i still have a 5 day cooling off period in which i can withdraw my offer for any reason?

Within those 5 days i assume i would need to get the pest and building inspection completed, can that normally be done in 5 days?

Can i assume my conveyancer would need to look at the contract first before my offer is submitted or can i may the offer then withdraw if they find something in the contract not quite right?

Thanks
 
Unconditional exchange or Section 66W exchange means exchanging contract waiving all rights to a cooling off period thus one not being able to rescind from a contract of sale without loosing 10% deposit.
 
Oh wow, thanks for clearing that up Nathan.

I was reading a previous post on the ways off purchasing a property:-

Way 1
Sign a contract in the real estate agent’s office & pay a 0.25% deposit. 5 business day ‘cooling off’ period begins the following day.
2. Do pest & building reports. Apply for finance approval if required for the purchase. 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 6, pay up the balance of 10% i.e. 9.75% and contracts are formally exchanged by default
4. Settlement in 42 days later (typically)

Way 2
1. Make a written offer. Written offer has clause such as "finance approval, building and pest, settlement period"
2. If the vendor accepts the offer (written), finance approval, 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. You sign a 66W form along with your solicitor, that you acknowledge that no cooling off period applies.
5. Contracts are exchanged
6. Settlement in 42 days later (typically)


I assume then there is a Way 3 for unconditional offers i.e
1. Conduct all inspections prior
2. Review contract
3. Make offer

Is my assumption correct?

Also i read somewhere that the an unconditional offer of say 550K may be preferable to a conditional one of 600K, is it really valued that much by the vendor?

Thanks again
 
steps 1 and 2 sound right,

step 3, can be any arrangement. Hoever yes depending on a vendor your 50k cheaper can go a long way as the circumstances my be dire if the deal is not completed by a certain date or cerntainty of a sale etc.

Just bout a unit for someone yesterday at auction bid of 155k got rejected. We paid $151k for it exchange 66w.

Motives change and cicumstances are all different. with unconditional exchange must have big kahuna's and know what your doing otherwise there are a myrid of things that can go wrong and do go wrong for people.

Goodluck.

Nath.
 
Hey Pommie

My clients purchase both conditionally and unconditionally- it really depends on what, where and how hot/cool the market is. In some suburbs of Sydney (eg Eastern suburbs) it's almost standard practice to buy with a 66sW whilst others (eg Parra, western suburbs) assume it's going under contract with a cool off.

The risk with an unconditional exchange is, as Nathan has pointed out, not having your inspections/reviews/loan approvals in place to be able to exchange quickly and missing out to another more organised/different circumstances purchaser, even if you've had a verbal acceptance from the vendor. Given the slowness of banks recently (especially end of last yr) it's usually only a cash buyer or a buyer who's not relying necessarily on a valuation (low LVR lend, for example) who can unconditionally exchange. Even then, inspections can take days to organise as can contract reviews. Some agents will "give" you a few days and not show other buyers, but most will continue (as is their right) to market and show the property to other potential purchasers.

When exchanging unconditionally, you want to make sure that all your ducks are lined up and ready to go, as it's the same as buying at auction. No cool off, no second chances. If you can carry out your DD, searches and inspections, obtain full loan approval and are happy to buy on the agreed price and terms, then it makes sense to exchange unconditionally. Some of my buyers prefer to do everything beforehand, and avoid the possibility of having to rescind during the cool off and forfeit their 0.25%, whilst others prefer the security of taking the property off the market and then conducting their searches etc without having undue pressure from being gazumped. And believe me, gazumping happens all the time, especially here in NSW.

Yes, some vendors will accept a lesser offer with a signed 66sW compared to a higher offer from a buyer with a cool off- it all depends on their individual circumstances and motivation. I've found that buyers who have bought elsewhere are more motivated to sell unconditionally but don't expect all vendors to be swayed necessarily by less $$$. Those vendors who've also had a contract or two fallen over already can also be more generous when it comes to discounts as, understandably, it can be very stressful going through the selling process a few times without success.

Hope this helps. Where are you looking to buy? Made a decision on areas yet?
 
Thanks Jacque,

Whilst Ive probably over analysed the property market (remotely from Singapore) I think maybe im being a little bit gun ho if i think i can sign off on a place unconditionally!

Yes Ive settled on a few suburbs in the shire.
I'm flying to Sydney next week with the intention of picking up a place.

Finances are all in order but i fear that is only 1 duck in a little line of ducks :eek:

Cheers
Pommie
 
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