Buying a home can be one of the most significant transactions in your life.
During the course of buying your home you may experience a variety of mixed emotions and there are certain aspects of the conveyancing process that you should be aware of to ensure that the transaction runs as smoothly as possible.
Some of the common areas where things can go wrong are:
1. Not paying the Deposit on time
If you don’t pay the initial or balance deposit on time under most contracts the Seller would be allowed to:
Terminate the Contract;
Keep the deposit already paid;
Claim the unpaid deposit amount from you as a debt; and
Sue you for breach of Contract, which could include a claim for the shortfall if the Seller cannot sell the property for the same price that you were going to pay.
2. Not being able to settle on the agreed date
Prior to signing a Contract, you should determine the best settlement date that works for you and your financier (if applicable).If you are unable to settle by the due date under the Contract and the Seller does not agree to extend, the Seller could elect to exercise the rights outlined in (1) above.
It is important to note that the Seller is under no obligation whatsoever to agree to an extension of this or any date under the Contract.
If you require the assistance of your bank to fund your purchase, the Contract should be made subject to you receiving satisfactory Finance Approval, regardless of whether you have a “pre-approval”.If you do not make the Contract subject to finance and you are unable to access the funds required to complete the purchase, the rights of the Seller (as outlined in (1) above) would apply.
If the Contract is subject to finance approval and you fail to notify the Seller of such approval by the due date, the Seller will be entitled to terminate the Contract up until the point that you satisfy (or waive) the condition.The deposit would be refunded to you in this circumstance.
If you do terminate under finance approval, you must be able to show that you made a genuine attempt to obtain finance and a letter from your bank denying the application is always handy to have available.
4.Building and Pest
If you are not satisfied with the report or the Seller doesn’t agree to fix what you want, you can terminate the Contract, provided you act reasonably.For example, the Seller could argue that you are not acting reasonably if you terminate for something that is only aesthetic and not structural or major in nature.If you were to terminate under this condition, the deposit would be refunded to you.
Most contracts provide that the right of the property passes to the Buyer once the contract is signed.You should ensure that adequate insurance is in place should an insurable event occur at the Property following entry into the Contract (eg. flood or fire).