Many first home buyers are unaware of the detailed conditions of a formal offer on a property.
Let’s break it down. A formal offer includes negotiating a price; however, when purchasing a home, there are multiple conditions that the contract can be subject to. So, what are these conditions, and what do you need to know?
Building & Pest Inspection:
A Building & Pest Inspection is one of the most critical conditions on a contract. Generally, a Buyer completes a Building & Pest inspection to ensure they are happy with the property’s condition structurally before the property has settled. An exception to this is when a property is for sale “as is”, meaning the Buyer waives their rights to complete a Building & Pest inspection or one is provided.
A Building & Pest inspection sets you back roughly $500 and, due to high demand, require 2-3 weeks notice for a booking. It is best to allow 14-21 days to complete a Building & Pest inspection; this enables you to have the inspection booked, completed, and returned to make an informed decision based on the report’s findings.
Council compliance searches are complete to ensure that the local Council has approved all buildings and structures on the property. It is a buyer’s choice to carry out this inspection as long as they provide it as a condition on the contract. In terms of timeframe, we recommend allowing 14 days for a council compliance check to be complete.
If you plan to finance your purchase with a bank loan, you must allow processing time from your bank. With reduced interest rates and low house prices in Gladstone, bank loans are taking longer to process than usual. We recommend that you allow 21 days for your finance to be approved once the contract is signed.
If you are beginning your search for your first home, it is time to contact your bank and obtain preapproval. With preapproval, you will be able to confidently place an offer on a house, knowing how much you can afford to borrow.
Electrical inspections are not as common; however, they can be beneficial for a Buyer. An electrical inspection allows the Buyer to have an Electrician inspect the property to ensure the wiring, fittings, and appliances are in safe and working order. We recommend allowing 14 days to complete this inspection.
Settlement is the process where the ownership of the property is transferred from Seller to Buyer. We recommend allowing 14 days after the contract goes unconditional (this occurs when all contract conditions are satisfied).
When submitting a formal offer on a home, the real estate agent will allow you to put forward your price offer and your contract conditions. As suggested above, each condition will require a timeframe to be satisfied.
You can seek assistance and advice from your solicitor, bank and real estate agent throughout this process to encourage a smooth sale.