Property

Making an offer to purchase that works for you

Buying a house is a weighty undertaking. From a financial perspective the size of the commitment is enormous and from the emotional side it is also a huge investment. It is very easy to get carried away and to make quick decisions that don’t work for you in the long run. For many people it is also less a business transaction and more a personal one. But the reality is that it is a purely business transaction and while you can still be nice in going about the purchase, you must still not be so nice that it is a transaction that you are still paying for in thirty years-time. To help navigate the process, here are a few clauses to consider when completing an offer to purchase.

Legal fees

Typically, the conveyancing fees are covered by the purchaser and these can be startlingly high. If you have you own conveyancer speak to them and find out what they would charge. Feel free to haggle over a rate. If you don’t have your own person, then go online and search for something like ‘conveyancer in Lilydale’ to see what comes up. Have a meeting and build a relationship. Agree with them that you will do whatever you can to bring the business their way. Then write into the offer to purchase that you want to use your conveyancer, or if this is not acceptable, that you will pay no more for conveyancing fees than the amount quoted by your conveyancer. That puts the ball into the seller’s court and could save you big money.

Subject to

You can put any clauses into the offer to purchase that you want. If you want the sellers to include something like a stove or a chandelier in the sale, then specify that. Your subject to clause could be anything. Perhaps you have viewed the property, but your partner hasn’t. You don’t want to mess around and lose it so make an offer. But make it subject to your partner viewing the property and liking it within a certain time period. Putting these clauses in might mean that the property stays on the market, but what it does mean is that if the offer is accepted that you are first in lines. The seller might end up putting you to terms if another offer comes in, but at least you are in the race.

Occupational rent

This is a very important clause. If this amount is too low, then the sale can go through and the previous owners can drag their feet in leaving given that the rent is lower than the repayments on their new house. Make sure that any occupational rent clauses are in your favour. In other words, if you move in early then you pay an amount that is as low as possible while if they stay on past transfer then the rent needs to be above market rates to incentivise them to move. Alternatively, you can also specify that transfer can only happen once the property is vacant.

The price

Know what you can afford and never offer more than that. Your only concern in making an offer is what you can borrow safely and comfortably from eh bank. The asking price is only relevant to the seller, and while they might have hopes for a certain figure your responsibility is to yourself, not them. The offer you offer must be based not on their asking price but on where you are able to go from your side.

 

 

About the author

Oliver Revilo