by Robecca Cunningham
Found a property? What happens now? Often people spend so much time and energy looking for a property that by the time they find what they are looking for they are overly eager to lock it in. By exchanging signed contracts with the vendor, and paying a deposit, you will be committed to purchasing the property on the terms which are set out in the contract. Once you have found a property and agreed with the seller on the price, your lawyer can help you understand the risks before you sign, to make sure that there are no hidden surprises.
Depending on the type of property that you are purchasing it may be helpful to inform yourself with investigations to satisfy yourself that you are content with the quality of the property you are purchasing such as:
- Building Inspection
- Pest Inspection
- Strata Report
- Community Title Report
- Pool Report
- Survey Report
- Building Information Certificate (requires survey report)
- Development Applications within close proximity to the property
Once a vendor and purchaser have signed and exchanged contracts of sale the parties will have entered an enforceable contract where the rule of caveat emptor applies with respect to issues of quality. Although there are circumstances where a purchaser may be able to rescind an executed contract, the same does not apply where investigations reveal issues with the quality of the property.
Cooling off period
If you are buying property in NSW you can be comforted by a 5 day cooling off period (which increases to 10 days for an off the plan purchase). For this period, you are able to rescind the contract at a cost of 0.25% which must be forfeited to the vendor if you elect to rescind. If you do not rescind by the nominated date and time you will be bound by the contract and the balance of the deposit, which is usually 10% of the purchase price, will become due. The situation, however, is different for the vendor who becomes bound by the contract upon exchange.
Although the cooling off period may be waived or shortened, to do this you must instruct your solicitor or barrister to provide a s 66W certificate to the vendor as part of the contract of sale.
When the property market is rising there is significant pressure to exchange contracts quickly. By thinking ahead about the pre-purchase inspections you may wish to undertake, lining up pre-approval of finance and locating a lawyer to manage the transaction you can be ready to act quickly when the right property comes along.
If you have found a property and need advice about what next, get in touch today.