Heading off to an auction this weekend? Make sure you get your lawyer to review the contract of sale before you start the bidding.
When purchasing a property at auction, you do so on the published terms of the contract of sale. Therefore, before you start bidding on your dream home, you need to be aware of the terms and whether they work for you and your situation. You can’t have anything changed after you sign on the dotted line. Any changes will need to be negotiated with the vendor’s lawyer before the day of auction.
The contract of sale will include the details of the vendor, purchaser, real estate agency, solicitor/conveyancer, property address, financial terms, settlement dates, GST and any special conditions. Special conditions are an area where extra care should be taken and where having a lawyer vs. a conveyancing clerk to look over the legal terms is going to make a difference. A lawyer will not only be able to identify discrepancies, but also provide the proper legal advice on your options and how to deal with them.
In Australia, standard conditions are for a 10% deposit to be paid on auction day, and a settlement of 4-6 weeks. However, your lawyer can negotiate special conditions on your behalf to better suit your personal circumstances. For example, paying a fixed deposit amount rather that a percentage of the total purchase price And if you are planning on buying at auction, then this is of real benefit to you because you now know how much you need to pay on the day. Having the settlement period extended is another common clause that is negotiated between vendor and purchaser’s solicitors and may give you more time to investigate different sources of finance and arrange any other legal documents that may be needed.
Many people will sign their contract of sale without a lawyer looking over the conditions, and in some instances this is fine. However, there may be intricacies that you are unable to identify as being an issue. For example, a lawyer going over the contract of sale and vendor’s agreement can identify certain details regarding the property, such as any planning restrictions, or restrictive covenants. If these aren’t disclosed or identified, you may end up with an airport or motorway being built over your backyard in the future.
Whether you are a buyer or seller, there are obvious advantages to engaging your lawyer early -on in the process. Negotiating special financial or settlement terms, time for financial approval or special condition reports are all things that can be negotiated into the contract. It is hard to mitigate all delays but when you have a little extra time on your hands it does make the process much easier for all involved.
Buying or selling a house and ready to engage with your lawyer? Speak to Law&Co about their Titlexchange™ product. An online, transparent and efficient title transfer platform that aims to get you to settlement as quickly as possible. Speak to one of our team today.