What to put on an offer?

Hi all,

We just about have our finance in place, and there a few properties we’d like to look at tomorrow. Having never bought an Australian house before, (we built our PPOR), can anyone help me as to what we need to look out for and what to put on an offer if we decide to make one?

Finance-wise, the bank has approved what they will lend us and the structure but we are waiting for them to revalue the PPOR to see how much we can split out. If we can’t pull out enough for the deposit then we’ll need to pay LMI on the IP – a bit of a bummer, but not a deal breaker.

So, should we make an offer, it would be along the lines of:-

Subject to finance
Subject to building and pest inspection

Do you need to elaborate on the inspections part? I mean, should you say something along the lines of ‘subject to satisfactory building and pest inspection report results?’ or is it implied in the terms that a poor report would be grounds to pull out?

Any tips, or any normal conditions people put into offers would be greatly appreciated.

Thanks.
 
Do you need to elaborate on the inspections part? I mean, should you say something along the lines of ‘subject to satisfactory building and pest inspection report results?’ or is it implied in the terms that a poor report would be grounds to pull out?

Good point.. I'd definitely put that clause in. It sounds like you know the terms and cond's in the Victorian contract, where you can only exercise the b&p clause when there is major infestation :confused: Which is ridiculous when you think about it.. Blind freddie would notice major infestation without an inspection..
But anything less than major infestation, and your still bound to the contract. :confused:
 
But anything less than major infestation, and your still bound to the contract. :confused:

Using the standard REIV clause, absolutely. It may be worthwhile talking to your solicitor, Tony / Emma, as seeing if they can draft a clause based around satisfactory results from those inspections, instead of major structural defects.

In terms of finance, this is usually pretty standard. The clause will allow you to nominate a particular lending institution, and, the amount of finance required. Note that the clause refers to the minimum amount; if you make this too low, you risk needing to find cash if the valuation falls short; if you make it too high, you risk giving the vendor cause for concern.
 
Thanks for the replies.

Being 'burned' already by a low bank valuation when we built our house, could you put on your offer something like, subject to finance of $x from Y bank
and subject to 'Y' banks valuation being within 5% of offer price?

Thanks.
 
You can put anything you like in there, really. Again, I'd always recommend having the clause drafted by your solicitor to ensure that you're not caught out by loose wording, though.

Either way, my first thought is that you could use a 'valuation must be equal to or higher than purchase price' as a way to negotiate a discount if the banks don't play nice. Nevermind the 5% variance. If the deal stacks up as it is, then you probably don't want to use these clauses to get out altogether, if you can simply use them to your advantage in reducing the price instead.
 
Hi all,

We just about have our finance in place, and there a few properties we’d like to look at tomorrow. Having never bought an Australian house before, (we built our PPOR), can anyone help me as to what we need to look out for and what to put on an offer if we decide to make one?

Finance-wise, the bank has approved what they will lend us and the structure but we are waiting for them to revalue the PPOR to see how much we can split out. If we can’t pull out enough for the deposit then we’ll need to pay LMI on the IP – a bit of a bummer, but not a deal breaker.

So, should we make an offer, it would be along the lines of:-

Subject to finance
Subject to building and pest inspection

Do you need to elaborate on the inspections part? I mean, should you say something along the lines of ‘subject to satisfactory building and pest inspection report results?’ or is it implied in the terms that a poor report would be grounds to pull out?

Any tips, or any normal conditions people put into offers would be greatly appreciated.

Thanks.
I would suggest to be absolutely sure consult your legal/conveyancer before making any offers.
 
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