When buying property, your conveyancer will spend considerable time drafting or negotiating the contract of sale. For a home buyer, this process could seem lengthy since they would want to move into the property in the shortest possible time. However, it is unlikely that your conveyancer will give you the go-ahead until they are satisfied with the terms of this agreement. So, what is the contract of sale, and why is it so important? Read the extract below to understand why this agreement is arguably the most critical aspect of transferring real estate.
The contract of sale is an agreement stipulating the terms of real estate exchanges. It covers all aspects of the deal, including the agreed price, disclosures, what is included in the sale, obligations, contingencies, the closing date and contract termination terms.
Below are some of the benefits of the contract of sale.
It Ensures You Get Value For Your Money
During the house visit and property inspection, you may have identified an AC unit, washing machine, pool seats and awnings. What if the buyer takes these items with them before you move in? The contract of sale details every item included in the sale. In such a way, it ensures you are well aware of what you will buy. On the other hand, the seller cannot take away appliances and installations included in the agreement.
Disclosures Enable You To Make Informed Purchasing Decisions
The property could look appealing. However, what if it contains an underground public sewer line. Or, what if a portion of the landscape rests on the neighbours land. If you intend to renovate the property, strata by-laws or resident association laws could prohibit you from changing the frontage or roof of the property. The seller is expected to make full disclosure about the structural and legal state of the property. This information lets the buyer know if they are making a wise investment decision.
It Compels The Seller To Make Repairs
In some cases, the property will have significant defects that can prevent you from buying the property. For example, it could have a leaking roof, pest infestation or asbestos. More often than not, such details will be revealed during the property inspection. When negotiating the terms of sale, your conveyancer can ask the seller to make repairs or reduce the initial asking price.
It Prevents Gazumping
Shrewd sellers could be considering offers from other buyers even after you sign the contract of sale. To prevent this, your conveyancer will add a gazumping clause that prevents the seller from accepting other offers before the closing date.
Contact a local conveyancing firm to learn more.