risks of longer settlement ?

hi, i have just purchased a property, the vendors have requested a 90 day settlement, as opposed to the standard 45 day. my question is does this present any risks or problems or just anything i should know about or keep in mind ? thanks

 

Fairly standard and quite common.
Marg

 

Risks with longer settlements include
- vendor more likely to change their mind and not settle
- either party dying
- change in circumstances, such as employment, causing loan issues
- finance expiring
- death or either party
- damage happening to the property

90 days is not that long though.

 

The 'standard' is 42 days in NSW - 6 weeks. 90 days gives the vendor time to pack and find a new place to live - so not that uncommon as @Marg4000 said.

 

A 90 day settlement isn’t uncommon - can work well if it’s an IP. Less interest for you

if it’s a PPOR it can be a pain because you’re probably itching to get into the new home.

 

I think you can see a doctor to get a cream for that

 

I have sold one late last year with 120 days settlement as I wanted to buy a house by this time. Everyone has different issues however 90 days looks pretty standard to me.

 

thanks everyone, its a ppor so yeh im excited to get things moving

 

i didnt think vendor could change theyre mind once contracts are signed ?

 

thanks

 

They are contractually bound, but what if they simply refuse to settle? It would be up to the buyer to make an expensive application to the supreme court to attempt to compel them. It would be generally cheaper and easier to just find another property to buy.

 

yes for most homes ....but for positive geared investment where every day is more profit ....one day is too long ...I want settlement today lol

 

wow ok, i never thought of it like that

 

This is a slight possibility regardless of the length of the contract.

Out son bought a new (at the time) PPOR some years ago on a long contract. He had a very strict list of requirements, a narrow search area (a few streets only) and very few properties met his criteria. One ideal property did come up for sale before he was really ready to buy (naturally).

Son planned to keep his then PPOR as an IP so was in no hurry to move. Vendor was building a new house so did not want to move before he was ready. Son negotiated a very good price on the basis of a five month contract with the vendor able to settle early on 14 days notice when his new house was ready to move straight in. All went well, everyone happy.
Marg

 

thanks for the anectdote, sounds like your son did well !

 

It was a case of the vendor having particular needs (not wanting to rent short term, avoid a double move) and a buyer who was able to meet the vendor’s needs due to his circumstances.
Marg

 

One quirk is that the date to pay stamp duty arrives before you've settled

 

I just went through a 21 day settlement (with two or three public holidays on the middle) - luckily all the ducks were lined up.....