In any private sale making an offer on a property is one of the important steps. If you make an offer and it’s accepted - just keep your part of the deal and the house is yours. In case you’re thinking of verbal offer or writing an email to the agent “Listen, Joe, I want to offer X for the house on 15 Lime avenue” - that’s not enough.
The way it is done in Victoria is the buyer signs a Contract Note - it’s a proper contract on a house and once the vendor (the seller) accepts the offer, he signs the contract as well and the house is sold. Contract Note should specify the exact details of the deal a buyer offers to the vendor - how much the buyer offers to pay for the house, amount of deposit, settlement date (when the rest of the money is paid and buyer gets the keys to the house) and conditions of sale. This article here explains in details how to fill and sign a Contract Note.
When it comes to signing the Contract Note, you should know that by law you’re entitled to 3 days cooling off period - meaning if you change your mind, you can give a written notice to the agent and the contract is dismissed. Do not forget to read the fine print - it will still cost you money to get out of contract even using the cooling off period, the amount is either 100$ or 0.2 percent of the house price, which ever is the highest (for instance, for a house that costs 280,000 it would be about 500$). Even though the house is sold via private sale, cooling off doesn’t apply always apply. There is no cooling off (for residential properties) in case
- The house is sold 3 days prior to or 3 days after an auction
- Buyer had a chance to seek legal advice before signing the contract
- This is not the first time buyer is signing a contract on the same property
The important thing is that there is a way to seek legal advice and still keep the right to cool off - sign the contract first, then go to solicitor.
There is a clause in the Contract Note that starts with “Subject to” and in many cases property goes under offer subject to Building and Pest inspections. The reason it is done this way is for buyer to avoid paying for inspections on property that he won’t end up buying because the vendor has rejected his offer. After the offer was accepted by vendor, the buyer gets (typically) one or two weeks to do the inspections. In case there were found serious structural problems or evidence of termites, buyer can get out of the contract and get all his money back.
You will find that every real estate agency has its own Contract Note, but they all are variations of this document published by REIV (Real Estate Institute of Victoria).
Related posts:
- What “Under offer” and “Under contract” means The process of buying a house, like any other process,...
- Making an offer on a house: Contract Note explained To make an offer on a house in most cases...
- Making an offer? Play it right. One typical mistake of the first home buyers is to...
- Why real estate agents push you to make an offer Read estate agents will always try to get an offer...
- Buying a house: Auction Vs. Private sale - Part 2 What is a private sale? A private sale is also...
Subscribe to Homeiown.com - click here
[...] First, there is a cooing-off period when you can cancel the contract for any reason. It starts from the date you have signed the contract and lasts for 3 business days, this post explains more about the cooling off period and exceptions to it. [...]
[...] done your homework , you know what similar houses sell for in that area. Call or meet the agent, make your offer and wait for the vendor’s [...]