Before making an offer on a house, here are the things you need to know

September 29, 2017

Unsure about what to do now that you've found your dream home? Here's what you should know before signing on the dotted line.

Finding your perfect property is no easy feat, and it's an exciting time once you get there. Often people want to run straight to the Real Estate Agency to make an offer, but it pays to make sure certain things are in place before signing your contract.

Making an offer on a property, you will need sign a contract of sale. Your offer will be noted as the purchase price in this contract, but remember this is not binding until your offer is accepted by the seller and they also sign the contract.

The first thing to keep in mind throughout this process, is that the Real Estate Agent is working for the seller and themselves - not for you. Be sceptical - never assume that the contract you are signing and all it's conditions and clauses, are in your best interest.

What should I be looking for in the contract?

Firstly, you should always sign a conditional contract, only subject to the building and pest inspection coming back acceptable. This clause is put in place to protect you as the buyer in the event you need to pull out of the contract. The inclusion of a 'subject to building and pest' clause, will allow you to walk away if there are major issues to the property you are not willing to take on.

Next, the finance clause is included in case your loan application does not get approved, so that you can walk away without any penalties. If your loan applications isn't approved at least you will get any deposit you have paid reimbursed back to you.

The Real Estate Agent might try to convince you to sign an unconditional contract, but you should remember that doing so will mean you won't be able to walk away without penalties. And these penalties can be quite substantial.

Also remember to check that any removable items are included in the contract - if you have been told they are a part of the sale. Dishwashers, fridges, furniture, curtains/blinds and floor coverings can all be included or excluded in the contract of sale, and you need to ensure that what you initially agreed during negotiations are taken into account.

What time frames should I anticipate and include?

The Building and Pest clause date should be 7 days from the date of the contract.

The finance clause date should always be at least 14 days for straight-forward loans, or 21 days for more complex loans.

Lenders can take around 2 weeks to process applications, and that means that agreeing to any shorter period could put you at higher risk of missing your finance date.

You should list the settlement date at 30 days minimum, or 45 days for any more complex loans. A longer settlement shouldn't cause any issues if you are more comfortable with or need more time for any reasons, but any shorter than 30 days may mean that you may need to extend your settlement down the track. This extension can incur penalties as the lenders and your solicitors require time after your finance date to get all documentation in place in preparation for settlement.

I’ve signed my contract of sale, now what?

If you can, immediately after you have signed a sale contract, you should notify your Kingscliff mortgage broker and solicitor. You'll need to provide both of them with a completed copy of the contract once you receive it.

Holding off on providing your contract of sale to both of these parties could mean important dates are missed due to a shorter time frame.

How do I know how much I can offer on a property?

Need to know your borrowing capacity, and therefore how much you can offer on that house you've found and want? Book an obligation-free appointment with us today, and we can get you started with a pre-approval. This will give you extra credibility with Real Estate Agents and will provide you added comfort and the knowledge you need to go house hunting because you'll know what you can afford. 

Contact Jo Croft and her team today to make an appointment or to chat through your options. Call 0425 293 453 or simply click on the Book Now button to make an online booking.

Posted in: Tips

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