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3 contract of sale conditions buyers should consider

By Andrew Bell

Whether buying your first home, an investment property or climbing one step closer to your dream home in Surfer's Paradise, there's a lot to be considered in the purchasing process.

Once you've put the rewarding search for your next home behind you, it's time to lock in that contract of sale. Don't get too excited, however – you need to be sure the terms and conditions are suitable to your needs.

Here are three special conditions you might like to negotiate before buying a property.

1. Subject to finance

Signing an unconditional contract before ensuring you have the necessary finances available to buy the home is playing with fire. Even with pre-approval for your mortgage, it's possible your lender will change their mind if the property isn't suitable to their risk or lending portfolio. Including a finance condition ensures the sale will only close when the lender approves your loan.

Similar conditions might apply depending on your situation. For example, "Subject to sale of the buyer's property" ensures you're given the time to close a sale on your current home, so you can put the proceeds towards the new property's sale price and avoid paying double rates.

2. Subject to due diligence

In today's fast-moving real estate market, it's important to snap up your dream property before someone else beats you to it. This can be difficult to achieve given the scope of investigation you should do before buying a home.

To guarantee you aren't paying too much or acquiring a burdensome asset in your new home, you'll need to have a building inspector and valuer assess the property. The building inspector will evaluate the home's structural integrity, water tightness, insulation and other key quality indicators. Meanwhile, your valuer will determine fair market price for the home.

With a due diligence condition in place, you may terminate a contract if the building inspection is unsatisfactory, while the valuation will protect you from an overpriced sale.

3. Subject to satisfactory search results

Some of the leg work involved in vetting properties is down to you. Conducting a title search reveals key information about a property such as:

  • The names of the legal owners.
  • Restrictive covenants.
  • Outstanding mortgages.
  • Restrictive covenants.

A title search will ensure you aren't purchasing the property unlawfully (such as if the sellers do not actually have the rights to sell), and clarify what you can and can't do with the home in future. Including a condition for satisfactory search results will help to protect you from buying a home that you cannot renovate or use in the way you intend.

When buying a home, you should work with a conveyancer or lawyer to avoid any legal hiccups along the way.

For more information about buying property in the Gold Coast, get in touch with the team at Ray White Surfer's Paradise today.

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