Is it necessary to get contract reviewed before making an offer when buying a property?

Discussion in 'The Buying & Selling Process' started by JazzyW, 11th Oct, 2021.

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  1. JazzyW

    JazzyW Active Member

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    Hi everyone,
    I am new to the buying process and I was wondering if its essential to get a contract reviewed before making an offer, or you can make a conditional offer, like subject to finance and inspections approval and upon acceptance of your offer you can get the contract reviewed. I would appreciate to know your thoughts on this question.
    Thanks
     
  2. HenryC

    HenryC Well-Known Member

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    Not necessary when you are making an offer as there are no legal documents to be signed, but 100% get your PROPERTY lawyer to review the contract before signing, make sure they are PROPERTY lawyer, not a random retail lawyer.
    In most cases, you can sign an HoA and subject to a certain due diligence period.
    Hope this helps!
     
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  3. JazzyW

    JazzyW Active Member

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    Thanks @HenryC for answering my question.
     
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  4. The Y-man

    The Y-man Moderator Staff Member

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    In Victoria, the "offer" is made on the legal document ("section 32") and so you will be agreeing to the conditions on it, as well as any special conditions.

    If you are buying in Vic, I suggest you get your lawyer to look through it AND explain to you what to look for. The lawyer must be practicing or able to practice in Vic to give you advice (if you are buying from interstate).

    The Y-man
     
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Unless you have a very high tolerance for risk or have previous experience in reviewing contract clauses for property contracts it is advisable to engage a lawyer to review before you commit $X00,000.
     
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  6. JazzyW

    JazzyW Active Member

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  7. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    There are different ways to make an offer - verbal, by email or directly on a contract. We always aim to make offers on a contract because they're taken more seriously and it yields better results. If you're able to make them with a 66W then that also helps strengthen the offer. Be aware that email offers can be binding so be careful.

    I would always have a contract reviewed before any of those offers anyway as terms can dictate what you offer and how, and each contract is different. For example, clause 7 is often ignored or misunderstood on NSW purchase contracts where SCs often water it down to 1% or $1 (a huge difference) and I've heard horror stories of vendors or trying to use it to terminate in a rising market. All these items need to be explained to you properly by your legal rep because if you're doing it yourself and are inexperienced, there are many things that can come back and bite you that even a seasoned buyer often doesn't understand or think about.

    In short, yes, get a contract review before making any offer in NSW.

    - Andrew
     
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  8. JazzyW

    JazzyW Active Member

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  9. HenryC

    HenryC Well-Known Member

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    Regardless of where you are buying its worth to get it checked :)
     
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  10. Penguin

    Penguin Well-Known Member

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    Is clause 7 the "Claims by purchaser" one? This is actually what's stated in the contract my conveyancer has reviewed for a potential property where the % is changed to 1%, and he mentioned it's quite "standard" nowadays with the hot property market in Sydney - should I be worried?
     
  11. Nina00

    Nina00 Well-Known Member

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    What about in Victoria?
     
  12. laura27

    laura27 Member

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    I'd say definitely yes
     
  13. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    Yes, very standard and 1% isn't too bad - it's when it's changed to $1.00 (seen that a few times) that I would start to get concerned. No problem with that in my opinion.

    - Andrew
     
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  14. Penguin

    Penguin Well-Known Member

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    Wanted to get some opinions on my situation:
    • Saw an off market property (Sydney PPOR) yesterday (Saturday), agent said a few people are interested and he will call me and send me the contract on Monday
    • Agent called me today (Sunday) and asked me to email him an offer if I like the property. He said another buyer will be sending him an offer as well.
    • Agent said he will discuss with the vendor if they are willing to accept my offer or if they have higher expectations. There will be no cooling off but I can put through an offer subject to contract review and B&P
    • If the vendor accepts or negotiate with my offer, I’ll get the contract and get access for B&P
    Questions:
    1. I shouldn’t follow the agent’s suggestion right? I feel like I’m putting myself at risk or am I being too cautious in this fast market?
    2. I thought I should at least have the contract reviewed before providing an offer. Or can I put a subject to wording to protect myself?
    3. Will my offer just be used to push up the price/ for the agent to shop for other offers?
    4. All my finances are sorted. Anything else I should keep in mind during this process (first time going through an off market process)?
    5. Are there any good template offer wordings to use, where I can show that I’m serious in buying but can still pull out in case something comes up from the contract or B&P that I’m not happy with?
    I tried to search for similar topics and this one came up so replied here instead of starting a new thread, thanks in advance!
     
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  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Just give him a price. If they agree then get the contract reviewed and signed and this will be the formal offer.

    Here is a template:

    "would they accept $x"

    Don't believe the agent either. They will use your offer to try to push up other potential buyers, but they would pretend you made an offer even if you didn't and do the same.
     
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