Last week we went over RP Data property reports, this week we’ll talk contracts and what you need to know. 

Getting the keys to your brand new property can be pretty exciting and signing your contract can also conjure up some really active butterflies in your stomach but please, please, pretty please! try not to get too carried away. Pop all your emotions on hold for a second (I know it’s hard, but you need to act with your head not your heart on this one) and be sure you’re aware of the ramifications of signing a contract.

Signing on the dotted line means you’ve agreed to all the terms and conditions of that contract and this is when the exchange of contracts happens. Basically, the vendor/s sign a contract and the purchaser/s sign one too and then they’re exchanged, so the purchaser/s hold a copy of the vendor’s signed contract and vice versa.

It’s helpful to understand that even though there’s a cooling off period after the contracts are exchanged, where your solicitor can negotiate the terms of the contract, doesn’t guarantee the vendor/s will agree to those terms.

3 things you need to know before you sign away.

Front Page.

Before you sign the front page of the contract, you should check all of the details thoroughly. These  should include; the agent selling the property, the vendor/s (current owner/s), the vendor’s solicitors, the completion date (proposed settlement date), the address of the property, the Title details and lastly, the inclusions (what comes with the property purchase).

Completion Date.

Mark this on your calendar, as this is the date you’ll settle on the property. It’s usually 42 days or any other date set at the owner’s discretion. This date can also be changed as long as both parties agree.

NOTE: Before signing your contract It’s best to confirm whether your bank can settle within the completion date, if not, you’ll be up for penalty interest for not settling on time.

THIS IS WHAT THE COMPLETION DATE CLAUSE WILL LOOK LIKE IN THE CONTRACT.

Inclusions.

There’s usually a standard list of inclusions in the contract and the agent will tick the corresponding box if that item’s included in the sale i.e. air con, blinds, fans, clothes line, antenna etc. You should ensure that most of the items are ticked, if not the vendor/s has every right to remove them from the property. I’ve seen situations where the vendor’s removed the dishwasher from the property, air con units and even clothes lines after settlement as they weren’t included.

THIS IS WHAT THE LIST OF INCLUSIONS WILL LOOK LIKE IN THE CONTRACT.

Be sure to tune in next week when I talk about the all important pest and building inspections.

Anyone who has never made a mistake has never tried anything new. Albert Einstein

Thank you for reading