Common property contract pitfalls to avoid
Updated: Jan 26
There are several tips when signing a contract and your agent should go through ever step. Here are a few contract tips -
An Unconditional Contract or Auction Conditions has been ticked on the last page. What does this mean? It means just that you are legally binded when signing this contract. However a FORM1 document must be produced and signed and there are no conditions in the contract like a building inspection or finance. Unless you are buying at Auction or under Auction Conditions ( 24 hours after an auction has been passed in) then you have 48 business hours to cool off. (change your mind).
Subject to finance - Don't brush this off lighly and unless you have an unconditional "Bank" approval letter or cash then you should fill this out. A condition approval letter for a bank or broker is useless. It just gives you some idea you can get a loan. The following must be in this clause - Bank, loan amount, maximum amount and a date - 3 weeks is a good idea. If using a broker use your normal bank your pay goes into. Before you go out looking, its a good idea to have a pre-approval before, but a new one must be done after signing. If your finance clause is longer than three weeks then get an Addendum done to extend this time - ALWAYS.
Subject to building inspection. If the agent has not already arranged a pre-purchase inspection website you can log into to view then arrange an inspection yourself. Anything negociated from the inspection you may want done has to be in a separate Addendum. Send the agent an email either saying you are happy with the inspection or want the following done in an Addendum. You must do this before the inspection date in the contract.