Check You're Sorted Before Signing A Sale And Purchase Agreement
The Sale and Purchase Agreement can be a daunting document for first home buyers. That is why we always strongly recommend first home buyers seek independent legal advice from a lawyer before making an offer.
Here, Nick Kearney of Schnauer & Co. has provided seven tips that can help ensure you’re sorted before signing an agreement to buy a property.
1. Auction or General listing? Act quickly
This matters because if it’s going to auction, you generally have a short timeframe to conduct all of your investigations. Register your interest with the agent quickly, as if there is a pre-auction offer, the auction will be brought forward (usually 48 hours) and as an interested buyer, you will usually be given the opportunity to bid. If you are organised, and get your advice and investigations done quickly, you could be able to submit a pre-auction offer and beat the rush. If the property is for sale by general listing, you may have more time to take advice and do your investigations, but the agent is still working and may take an offer from another party.
2. The Agent
It is important to realise that the listing agent works for the vendor, and not for the buyer. The agent is paid by the vendor, and generally, buyers don’t pay agents at all. Even though the agent works for the seller, they have legal obligations to the buyer, such as not to mislead them, to disclose certain matters to do with the property and not to pressure them (amongst others).
3. Buyer Beware!
In terms of defects, the general rule of caveat emptor applies to property purchases as much as it does to buying a used car. That means “buyer beware”. The seller (vendor) is not usually under any obligation to disclose defects in the property, so you need to do your background checks. Unlike a new car, you generally don’t get the privilege of “test driving” a house before you buy it, so do your homework.
4. Check the Agreement Before You Sign
Have your lawyer check over the Sale and Purchase agreement before you sign it. By and large, almost all real estate transactions are signed under an agreement that is prepared by lawyers in conjunction with the real estate institute, and any decent lawyer should be able to regurgitate the clauses and what they mean. But you need to ensure that some provisions that give protections to buyers haven’t been removed from the agreement, and that the conditions that you require have been included, and that the timeframes are sufficient.
5. The Title
In terms of title matters, many titles have registered restrictions on them such as land covenants or easements. Covenants are either positive or negative, meaning that the owner must do certain things on the property, or must not do certain things. Easements allow other parties to have rights against the property such as a right of way or electricity or telecommunications rights over the land. The terms of the easements should be checked to ensure they are not one-sided or onerous towards you.
6. Contracts – Need to Know
In terms of the law of contract, once an offer to buy is made, the vendor can accept it, reject it with no counter-offer, or reject it with a counter-offer. If a counter-offer is made, the vendor offers to sell the property to you on the terms of the counter-offer. The ball is then in the buyer’s court as to whether to accept the offer to sell, reject it with no counter-offer, or reject it with a counter-offer. That then becomes your offer to buy again, and the process repeats until an agreement is reached.
Once an offer to buy, or sell, is made, the party making the offer can withdraw or revoke it before the acceptance is communicated to the other party. That means there can be circumstances where an offer is accepted but the communication of the acceptance is not relayed for some reason, and the party making the offer revokes it before the communication. Mostly, agents will convey acceptance quite promptly.
7. Call Your Lawyer
Finally, never be afraid to call your lawyer and have a ten-minute phone discussion with him/her. It could save you a lot of time, bother and cost.
In partnering with The First Home Buyers Club, Schnauer and Co. have expressed a commitment to helping educate and advise first home buyers through the process of buying their first home.
First Home Buyer's Club Member Offer
• Free 60 minute consultation
(at your election: this can be used for either initial advice or a review of an agreement for sale and purchase (to be used in one consultation, not multiple consultations).
• We can arrange to travel to you to sign documents if this is more convenient for you (please note that additional costs will apply)
• 15% discount off the final invoice.
Contact Kim Hunt to take advantage of our First Home Buyers Offer
Tel: 09 486 0177 DDI: 09 892 0351