Negotiating
The Sale and Purchase Agreement
The sale and purchase agreement outlines your offer, the date of settlement, and any conditions that must be met before the sale goes ahead.
The agreement is prepared by the real estate agent, if one is involved, or by your lawyer in the case of a private sale.
In both cases you should discuss the terms and conditions outlined in the agreement with your lawyer before you sign it.
Unconditional Offer
This is an outright offer to buy the property.
You should be 100% certain that this is the property you want, and that you have access to the money to buy the property.
Once the seller has accepted your offer you are legally obliged to go through with the sale.
To be able to do this you should have your finance already confirmed.
You can talk to
Westpac about a pre-approved mortgage.
Conditional Offer
A conditional offer is also a binding contract; provided that all of your conditions are met.
You can only back out if one or more of your conditions are not satisfied.
Talk to your lawyer about the conditions you should include.
Common conditions include:
- Subject to title search – your lawyer will do this for you. This means that the sale will only go ahead if there are no ownership, access or other claims recorded on the property title.
- Subject to valuation – this means that the sale will go through if the valuation is acceptable to you and your financial institution if one is involved.
- Subject to finance – this means that the sale will go ahead if your financial institution approves your finance.
- Subject to a Land Information Memorandum (LIM) report: Your lawyer can do this as well. This means the sale will only go ahead if the property (including any alterations) complies with all building regulations.
- Subject to a builder's or engineer's report: This means the sale will only go ahead if you are satisfied that the house or land it is on are sound.
You may wish to set other conditions.
For example, subject to certain repairs being carried out.
Talk to your lawyer about anything you are unhappy or unsure about.
Don't sign your sale and purchase agreement until you are happy with the conditions.
Negotiation, acceptance and deposit
The vendor may accept your offer straight away or may negotiate on the price or other aspects of the sale.
The real estate agent, if one is involved, will act as the "go-between" until you and the vendor reach a happy medium.
In a private sale you will need to do this negotiation yourself or rely on your lawyer.
If you cannot agree on a price you can withdraw your offer.
Remember that if there are any changes to the sale and purchase agreement, you should let your lawyer know before you sign.
Once both you and the seller have signed the agreement it is legally binding.
You will normally be expected to pay all or part (10%) of your deposit directly to the real estate agent or to the seller's lawyer on signing the agreement.
The deposit will be placed in a trust account until all conditions relating to the sale and purchase have been met.
The sale and purchase agreement will state the amount of time you have to settle the conditions.
When all conditions are met, the offer becomes unconditional, the sale will go ahead and the property will be yours.
You're done! - Download this Buyer's guide as a PDF