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Things to include in contracts when purchasing IP

Discussion in 'The Buying & Selling Process' started by Lu Bracher, 25th Jul, 2015.

  1. Lu Bracher

    Lu Bracher Active Member

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    Some hints when purchasing, get your solicitor to insert clauses that:

    1. Obligate the vendor to maintain a certificate of currency on the building until settlement. Reason, in QLD this is a grey area. So make sure the vendor keeps the potato until settlement - saves you putting a cover note on it.
    2. Request permission to advertise the property for rent when the property goes unconditional. This includes signage at property and Internet advertising.
    3. Request permission to conduct one Open For Inspection each week and one private viewing each week after unconditional and prior to settlement.
    If renovations or quotes are required, request permission to enter for purpose of obtain quotes.
     
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  2. thatbum

    thatbum Well-Known Member

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    Well they are possibly useful clauses sometimes, but you have to be mindful of the consequences. I can think of a couple off the top of my head.

    It might affect the strength of the offer, compared to say a nice, clean unconditional offer.

    Also, getting the solicitor to do so much drafting might incur extra costs from them, depending on your agreement.
     
  3. DanW

    DanW Well-Known Member

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    Hi Lu, welcome to PChat didn't see you here before.

    Here's another clause attached for interstate buyers making offers unseen, attached.
     

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  4. Scott No Mates

    Scott No Mates Well-Known Member

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    I usually request that the vendor shouts lunch.
     
  5. DanW

    DanW Well-Known Member

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    And beers?

    Make sure it says at a venue of the buyers choosing :)
     
  6. MsAli

    MsAli Well-Known Member Premium Member

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    DanW has this worked for you? I think it's a sure fire way of putting off the seller.
     
  7. DanW

    DanW Well-Known Member

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    Yeah that's from my woodridge contract, was accepted. I was buying over the phone from Sydney, and had never seen the place so I explained I would be up there next weekend to check it out.

    If it doesn't work, you can just make a new offer when you arrive to view. But if it does work - you have taken the property off the market :)

    The other clause I put is an expiry date and time of the offer of 48 hours, so that I don't feel scared to place lots of offers. My writing on this one sorry, a bit messy as I wrote it in an open house (copied from solicitors email)
     

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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    I can't give up the full conditions @DanW
     
  9. MsAli

    MsAli Well-Known Member Premium Member

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    I reckon it may be too late to put that sort of clause in at this stage. One agent refused to even send the contract till I had seen the place and another said they don't like interstate buyers buying on the phone and then reneging; Wanted to ensure we had someone to see the place before we put pen to paper. I guess best to have someone trusting on the ground so you can pull the trigger.

    It has pushed us more and more to just focus on the numbers and if numbers are below what we like, the property must have an upside like development potential.
     
  10. RPI

    RPI Property Lawyer, Town Planner Business Member

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    In QLD as long as you are applying for finance you can terminate under the finance clause, no reasonableness required. Same with B&P,as long as you get an inspection and report by a lic inspector you don't have to be reasonable about terminating. I would just use the B&P and fly up and see at the same time as the inspector. Different story if the property is not hotly contested then you may find a very flexible vendor.
     
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  11. Lu Bracher

    Lu Bracher Active Member

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    The only downside is what happened to you :(
     
  12. Marg4000

    Marg4000 Well-Known Member

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    You can put in whatever clause(s) you want. But each extra condition makes the deal less attractive to the vendor.

    In the past we have accepted a lesser price with a clean contract over higher offers with multiple conditions in favour of the buyer.
    Marg.
     
  13. DanW

    DanW Well-Known Member

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    Yeah that's pretty rare though to line up tenants and settlement to delay that long.

    Previous purchases I should have used the clause as they settled on time
     
  14. DanW

    DanW Well-Known Member

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    Last year was a bit easier yeah. Now the market is hotting up in Brisbane it seems
     
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  15. HUGH72

    HUGH72 Well-Known Member

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    I've done this twice in Brisbane when I no longer lived there, I pulled the pin on one of them as it wasn't what it appeared. That was back in the days before street view and google maps, DD wasn't as easy from a distance.
     
  16. RetireRich101

    RetireRich101 Well-Known Member

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    In a rising market, where multiple offers are presented to the vendor, it is to your disadvantage to even include any special conditions.
    The standard B&P is 7 days, Fin is 14 days, in fact I would even suggest to your fair disadvantage to offer 5 days on both B&P/Fin. Once you get both signatures executed on the contract, you do have a strategic play in the negotiation, such as negotiate to extend the terms etc...

    I came across a property that a buyer milked vendor to 3 months before going into unconditional. It all comes down to the vendor though..
     
  17. DanW

    DanW Well-Known Member

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    5 days is almost impossible though on the finance. Even with 2 or 3 weeks with some lenders I had to ask for extension. 2014 was a busy year for banks and probably 2015 too, very slow approvals..
     
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  18. RetireRich101

    RetireRich101 Well-Known Member

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    Correct, 5 days is impossible even if you have pre-approval loan, as most loan are subject to etc conditions. For example if there is a high risk on improvement on the valuation report, lender may require you fix or get quotes on the repair etc.

    However, 5 days is better than an auction style. You're hoping to be successful of the 5 offers presented and granted a 5 days.
    If you're unsuccessful in extend B&P, Fin, Settlement terms, walk away.
     
  19. DanW

    DanW Well-Known Member

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    Yep I see the point it gives you options
     
  20. tomlemke

    tomlemke Well-Known Member

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    hey lu great to see that your on here looking forward to your input : )