A contract is a promise to do something in exchange for something else. In the conveyancing context, a contract is an agreement between a purchaser(s) to pay an agreed price to a seller(s) for a piece of land or business. This contract must be in writing when it relates to conveyancing.
There are a few things which Vendors and Purchasers should take note of when they participate in a Real Estate transaction.
Each transaction is unique.
(Uneek, if you will). What we mean here is that no matter the property you are purchasing, your transaction will be between you and the seller. The terms (and all discussions put into writing), will also only apply to you and the seller named in the contract.
Thanks to the easy access to information on the internet, there can be times when it is easier to find people who are partaking in similar transactions to understand the process better or learn from other’s experiences. It should be done with a grain of salt though, because your agreement will not be precisely the same as those found online. If you feel compelled to share your experiences online, ensure that you are clear about where something is your opinion and where it is a fact. You may need permission from all parties before publishing something online and must do it carefully.
Here, we will suggest some areas that are common to most residential contracts of sale. Of course, this is not a comprehensive list, and you must consult your representative for a set of terms applicable to your transaction.
Settlement Period
As a Seller, when you start marketing your property, you must ensure that you are clear about your settlement period. Settlement period begins on the day your contract is dated, a date to adhere to and not to be considered a line in the sand.
If your property is tenanted and the tenant will remain in the property at the date for completion (settlement), then this should be made clear on the contract. Consult your Agent about the market and what kind of buyers are out there (owner-occupiers vs investors) and mark your settlement period accordingly.
If you have promised your property will be empty at the date for completion, then you must plan accordingly. As a purchaser, the date for completion is a milestone and must be adhered to. Any delays will allow the Vendor to pass on costs to you, the purchaser, after this date has passed. Make sure you speak with your representative about any of these costs. Be prepared with a buffer in the event where you may run into any delay.
Inclusions (and exclusions)
The inclusions marked on the front page have a varying degree of importance for most people. For example, an owner-occupier may love the house because of that chandelier in the living room, whereas, an investor may accept that one of the four burners on a stove may not be operational at the time the property is handed over.
As a seller, you should ensure that you are VERY clear about what makes up the sale and even more clear about what is NOT included in the sale. As a buyer, you must ensure that everything is as you would want when the property is handed over. As the property (all of it), will be in exactly the same shape, size, way, condition as it was when you signed the contract.
Further, as a buyer, you will have to manage your expectations that despite best efforts, some inclusions may have stopped working during the settlement period (due to wear and tear). As a seller and with advice from your representative, you have to decide in case the latter scenario happens, what you wish to do (will you repair it, or leave it as it is etc.).
He said, she said
During a transaction, there is a lot of room for miscommunication and misunderstandings. To reduce this, a purchaser should put in writing anything that was agreed when having their offer accepted and paying the holding deposit.
As a seller, you should confirm with your Agent whether anything agreed on would require action on your part before handing over the property. Both seller and purchaser should then share this with the Agent and their representative. Often, the representative will confirm this in writing with the other representative so that this subsequent agreement can become a part of the larger agreement.
While the above list is not exhaustive, we have seen that it is often these points that cause the greatest grief to all parties of a conveyancing transaction. Want to get in touch? Email us today at info@uneekconveyancing.com.au