Contract subject to sale of a property

Discussion in 'The Buying & Selling Process' started by Whitecat, 30th Nov, 2015.

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  1. Whitecat

    Whitecat Well-Known Member

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    Has anyone ever done this?
    How does it work?
    How much time do you have to sell?
    Does it force you to sell your place at a low price?
    I get it that is not the most attractive contract for the seller of the new house.
     
    Whitecat, 30th Nov, 2015
    #1
  2. Rixter

    Rixter Well-Known Member

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    1. Yes
    2. It allows you make offers to purchase a property subject to the sale of your own property selling.
    3. Technically you can extend your time on the market to sell indefinitely unless a set time period is agreed upon in a purchasing contract.
    4. You are not forced to sell at a low priced. The only pressure to accept a lower price is a self imposed one for fear of missing out on the property you've conditionally contracted to purchase.
    5. It really comes down to how long the vendors property has been on the market and whether your offer is enough to push their hot buttons and motivate them to accept.
     
    Last edited: 30th Nov, 2015
    Rixter, 30th Nov, 2015
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  3. wylie

    wylie Moderator Staff Member

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    Never done it ourselves.

    I've not seen this in a Brisbane market for many years. As a vendor I wouldn't do it (but was prepared to a year ago when a buyer had a house ready to list at a realistic price and agent was confident it would sell quickly - ended up selling to a cash buyer so didn't go for this other one - was a quite unusual situation too and we had to sell quickly - at least get a signed contract quickly).

    It can force you to sell for less than you would otherwise or lose the house you want.

    Edit: Rixter said it much better than me ;)
     
    wylie, 30th Nov, 2015
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  4. wylie

    wylie Moderator Staff Member

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    One thing I have seen in such a circumstance is where a condition has been added to protect the vendor whereby should another buyer be found who can offer a "clean" contract, that the vendor has the option of advising the original purchaser of this. At this time the first purchaser has to "go unconditional" or back out.
     
    wylie, 30th Nov, 2015
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    It makes it harder for the purchaser as they have no control over settlement and when they can take possession.

    In a slowing market this canean the purchaser is delayed by months if there are no buyers for your property leaving the buyer renting for an uncertain period.

    A clean sale is always better.
     
    Scott No Mates, 30th Nov, 2015
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  6. D.T.

    D.T. Specialist Property Manager Business Member

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    You certainly can do this and many do.

    In a healthy market your offer won't be accepted though. Think from a vendors point of view, for your property would you prefer 480k with no strings attached or 500k pending conditions which are out of your control?
     
    D.T., 30th Nov, 2015
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  7. Big Will

    Big Will Well-Known Member

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    It does happen.

    As a vendor I would want on the contract an end date of how long you have to sell the property and also a price on it and would want the option that if a better offer or unco offer came through that they have the first right to match the offer or I can sell it to them.

    E.g. 60 days to sell at a price of $500,000 or more (get legal advise).
     
    Big Will, 30th Nov, 2015
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  8. Azazel

    Azazel Well-Known Member

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    It can have a chain reaction if one of them doesn't go through eg. issue with the B&P.
    Not an ideal situation, but it happens.
     
    Azazel, 30th Nov, 2015
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  9. Ezzo

    Ezzo Well-Known Member

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    We have agreed to it in the past, where their house was under contract and all parties were 99% confident that the sale would proceed (it was checked out first). But agreed, that it doesn't make the most attractive offer.
     
    Ezzo, 30th Nov, 2015
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  10. Ozzie in Texas

    Ozzie in Texas Well-Known Member

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    I have done it twice in the past.....where I was the one asking for an extension on settlement.

    There was pre-agreed timeframe for settlement to occur, with the ability to renegotiate.

    I think if the property market is solid and buyers are wanting to lock in a price as well as the property, there are advantages to buyers to enter into this kind of arrangement. If you are unsure if properties will devalue within the terms/timeframe of the contract and don't want to be locked in, then don't.
     
    Ozzie in Texas, 30th Nov, 2015
    #10