Contracts and offer conditions for first home buyers
Once you buy a home, that's where the fun begins. But there's a whole bunch of paperwork you need to get through first.
But not to worry. Just to take a look at the different contract and offer conditions you might come across:
- Typically, every offer is conditional to finance. You usually get some time - about two weeks - for your lender to approve the property you want to buy. (This is why so many people get pre-approval - makes the whole thing go much faster!) But some contracts are not conditional to finance, so always be sure to check.
- Another condition that's usually added is being able to pass a building and pest inspection. If that's not in your contract, you should insist on it with your real estate agent.
- For private sales, every state and territory has different laws about cooling off periods and financial penalties, and so on. Make sure you look them up for your own state.
- For instance, in Victoria the cooling off period lasts three days. (There are some exceptions where the cooling off period doesn't apply, so be sure to check.) You can back out for any reason, you just have to pay a fee.
- Usually, you can pay $2,000 (sometimes $1,000) on the day and the rest of the deposit within a set amount of time that you agree to.
- Also, don't rely on real estate agents to just write out conditions for you! Work with your conveyancer to make sure everything is worded the way you need it to be.
Now, auctions are a little different:
- Auctions are unconditional, and there's no cooling off period. So you need to be really sure you want to buy.
- If you want a building and pest inspection, you need to do that on your own cost before the auction, otherwise it's too late. Same for finance.
- Once you buy the house, you pay a deposit immediately, and contracts are signed right then and there.
- If you want to change the settlement times, you need to do that before the auction. Thirty days is sufficient for the bank's purposes.
As you can see, both are pretty different - and there are some conditions you need to be aware of beforehand. This is why it's so important to be clear with your real estate agent and conveyancer - and be up to date on what's expected of you at all times!