Is a 6 month settlement a good idea with COVID-19?

Discussion in 'The Buying & Selling Process' started by brisbane buyer, 13th Apr, 2020.

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  1. brisbane buyer

    brisbane buyer New Member

    Joined:
    13th Apr, 2020
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    Location:
    Brisbane
    Hi everyone! Newbie question here...

    Just wanting to get some opinions on our current situation. My partner and I have currently entered a verbal agreement to purchase a property in Brisbane with a 6 month settlement (we have not signed anything yet as the owner is selling the property himself and did not have a contract ready). The reason we wanted a 6 month settlement is because we are currently locked into a rental agreement until the end of the year and I will be the beneficiary of an estate (time frame unknown) which will put us in a position to avoid LMI. My partner both have government positions not effected by COVID-19 luckily.

    The current owner wants finance and B&P to be competed within 21 days, however we would like the unconditional date to be closer to the settlement date as we would be responsible for the property from the unconditional date AND gives us time for the estate to settle and avoid LMI.

    My questions are: what would be a reasonable unconditional date for such a long settlement?
    What clauses should we include in the contract to protect ourselves?
    Would it be reasonable to break the lease on our current tenancy early, so we are not paying both a mortgage and rent during this COVID-19 event?
    Is it smart to be locking in a price now as we don’t know what COVID-19 will do to prices in 6 months?

    Thank you!
     
  2. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Your finance approval will only last 90 days I think so you will need that date closer to settlement

    I think you should definitely talk to a lawyer and get the contract clauses written properly for such a long settlement
     
    Stoffo and punti like this.
  3. Closet

    Closet Well-Known Member

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    Be mindful of the finance climate that is emerging and ensure your solicitor covers you sufficiently and checks the t and c offered by your lender. In 6 months lenders could have a very different lending appetite..even for approved loans.
     
  4. Stoffo

    Stoffo Well-Known Member

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    How would you be "responsible for the property from the unconditional date" as you put it ?

    You may be "liable" to settle after going unconditional, but the title owner is usually responsible for the property and all outgoings until date of settlement ;)
     
  5. Hetty

    Hetty Well-Known Member

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    Location:
    NSW
    Why not buy down the track when you’re ready?