Buying a property and writing an Offer & Acceptance.
Most properties in Western Australia are sold through private treaty (offer and acceptance) process.
An interested buyer would let the selling agent know that they are interested in buying the property, the agent at this point will invite the interested buyers to write an offer to purchase completing and “OFFER AND ACCEPTANCE” once completed the agent would present the offer in writing to the sellers.
At that point, you would start a negotiation, which may be a counter offer from the sellers and vice versa until the negotiation reaches a point where both parties agree on a price and the conditions that may have been added as special conditions forming part of the contract.
Where do I start?
So, here you are actively looking for your first home, an investment property or a block of land to build your dream home on.
What an exciting time, Purchasing property can be quite scary, exciting, tiring, the list goes on.
A lot of Indecisiveness… “Do I want a project home to renovate?”, “should I buy a house and land package?” Self-doubt sets in, so much choice what do I do next? “What if I can’t afford it?”
This is where I believe you should start; it’s your advantage if you have your FINANCE pre-approval from your lender first before you go out and start looking, finding out what price range you should be looking in. Then once you have pre-approval you will be able to look confidently for that one perfect property for you that ticks all or most of the boxes.
Ok so now you’ve had your finances looked at and you’re ready to go out and search for that dream property, you may seek the assistance of an agent that you feel comfortable with to help you with your search, they will look in your criteria and set up private inspections or may arrange for you to attend suitable home opens.
So after many inspections, your search has come to an end, you’ve found the property you’re writing an offer to purchase you need to be asking the agent the right questions.
Your real estate agent will walk you through the contract so you understand what you’re signing before you sign.
Here are some questions that should be asked.
• “Are there any structural issues I need to know about?”
• “Has that shed/ pool/ patio etc., been council approved?”
• Does the property have any Asbestos?
• Is everything included in the sale in good working order?
• When was the last time a pest inspection was completed?
• Are the fences in good order and on the boundary?
Your offer has been accepted subject to finance approval (normally you have 28 days for your bank to approve your finance application if you haven’t already got pre-approval) a valuation will normally need to be completed as well. Then once finance is approved you would normally have special conditions attached as a part of the contract.
1/ A BUILDING INSPECTION from a licenced builder.
2/ A PEST INSPECTION &
3/ this contract is conditional upon all plumbing, electrical, fixtures and fittings being in good working order at settlement.
We advise to always get a structural report from a registered builder.
Your real estate agent should have a list of registered builders that will conduct an inspection and write you a comprehensive report.
If there is a slight structural issue with the property you could quite possibly knock a few grand off the price advertised, and if there are major structural issues that aren’t too visible, then you have saved yourself a lot of money and time!
The agent is obliged by law to communicate all written offers to his or her seller as soon as practicable. Your offer may be one of several presented to the seller by their agent. The seller is free to accept any one particular offer or none of the offers. Regardless of the order in which the offers are received.
You may want to include the following special conditions in your Offer & Acceptance.
1. This contract is conditional upon the Buyer obtaining at their own expense a written report from a registered builder certifying that the dwelling on the property is structurally sound, within …..…… days of finance approval. If the report discloses that the dwelling is not structurally sound and the Seller at his/her own expense is unable or unwilling to rectify the fault(s), the Buyers may (within 7 days from the date of the report), terminate this contract by written notice, to the Seller’s agent.
If the Buyer fails to obtain the report within the prescribed time (in accordance with Clause 1 above), the Buyer agrees that they shall be deemed to have waived the benefit of this Clause without further notice from either the Buyer or the Seller.
2. This contract is conditional upon a TIMBER PEST INSPECTION report being obtained within ….….. Days from finance approval, at the expense of the Buyer from a licensed pest control operator certifying that an inspection to the AUSTRALIAN STANDARD AS 4349.3 inspection buildings – Timber Pest Inspections has been performed.
If the report discloses live timber pests or damage to any or all structural improvements and the Seller at his/her own expense is unable or unwilling to eradicate, remedy or rectify such timber pest activity or damage the Buyer may at any time within ……… days of the date of such report, give notice in writing terminating the contract whereupon the contract shall be at an end and all deposit and other monies paid thereunder shall be repaid to the Buyer without deduction.
A Buyer who does not terminate the contract within the time specified in this clause is deemed to have waived the benefit of this clause.
3. The Seller warrants that all electrical, gas and plumbing fixtures and fittings included with the sale shall be in good working order at settlement. At settlement date should any repairs not have been affected then the Seller authorises the estimated cost of these repairs to be deducted from the settlement proceeds.
The seller’s agent will then present the offer to the seller.
At least 14 days should be allowed for settlement once your offer has been made unconditional.
I believe these conditions are important for you to know and will help you in your search, they will save you thousands of dollars and regret.
If you would like to know more about the Offer and Acceptance process then click here!