Property Contracts...When and when not to negotiate - Peasy
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Property Contracts…When and when not to negotiate

Changing the standard turnaround times related to a property purchase is not always essential, however it helps to know which dates and clauses are important, so that you know when to negotiate. There is also a difference in legislation between states, which is good to be aware of.
As an example, we compared NSW and QLD;
Offer: Most vendors want a quick settlement with minimal conditions, however it’s never a wise decision to miss out important conditions or suggest an unrealistic timeframe. It is also worth noting that purchases involving Guarantors, Companies, Trusts or a Refinance from one lender to another can take a little longer.
Deposit: Offering a higher deposit can make your offer more appealing to a vender but remember to still leave yourself a buffer for other upfront costs such as solicitors fees, stamp duty, rates, reports and for all other professionals involved that may require payment on or prior to settlement.
Cooling Off: In NSW this ends at 5pm on the final (5th) business day from the date the offer was accepted. If the purchaser changes their mind after this timeframe a 0.25% of the purchase price fee is forfeited to the vendor. The sale effectively becomes unconditional once your cooling off period expires.  However, in QLD you can easily change your mind within 7 days for any given reason.  If you are eager to get your offer accepted before other potential offers come in, then you can waive the cooling off clause. However, if you are not 100% sure on the property, then we suggest leaving it in.
Insurance Due: In NSW the property must be insured between Formal Approval and Settlement. Note that in QLD the property is at the purchaser’s risk from 5pm on the first business day after the contract has been signed!
Finance Due In QLD a Finance due date is usually 14 days from the contract date and in NSW this timeframe is even shorter i.e. the day cooling-off period ends. It is not something we recommend removing from a contract as lenders policy can change from the time you are granted Pre-approval up until Formal Approval is received, plus this is also the time in which the bank orders valuations on the property to make sure it comes in on purchase price and not below. Note that if increasing the loan isn’t an option then a lower bank valuation can leave a purchaser short of funds at settlement. Lenders can also request additional supporting documents, which could take time to collate. Therefore, requesting an extension can be an option and worth asking for if you are experiencing a delay.
Building and Pest: If you are planning to knock down the building and rebuild then maybe this part isn’t too much of a concern.  However, in all other circumstances a professional report is advisable. Note that once you have the report back and should there be repairs, or work recommended; then you could use this as a tool to negotiate a lower purchase price.
Settlement: NSW settlements are usually 42 days and QLD are 30 days from the date of contract, however if you both agree to a shorter or longer settlement, then this can be a benefit for both parties. Be realistic with your timeframes as penalty interest can occur when a settlement is missed and often a complete loss of your deposit! Also note that QLD settlements can be harder to extend if one party doesn’t agree.
We hope these tips are helpful and please feel free to get in touch if you would like further information on any of the above. At Peasy we like to be part of the entire journey from start to finish so our customers understand all their options every step of the way!
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