Daydreamer123

Hi All

So following on from how much does it cost to buy a house, I now need advice on what to put in the letter of offer. Is this a standard letter or just something we put together?

Basically we want to make sure we are covered and make the letter subject to Bank final approval on finance, our own building and pest inspections, not sure if we need anything else.

How do we right it? What do we need to say? What else do I need in it to make sure that we dont end up in trouble.

First time buying a house and it feels very scary!!

Daydreamer123

This is what we are thinking of saying, how does it sound?

Hi xxxxxx,



As discussed, we would like to make an offer on xxxxx xxxxxx xx, xxxxx xxxxxx. Details below:



Property

Situated at: xxxxx xxxxxx xx, xxxxx xxxxxx, xxx



Purchaser

Name: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Address: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Contact: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Email: xxxxxxxxxxxxxxxxxxxxxxx



Please be advised we wish to offer $xxxxxxxxxx as consideration for the purchase of the abovementioned property and including all fixtures and fittings.



This offer is subject to the following conditions:



· Finance being approved

· Building inspection

· Pest inspection

· Repair of rising damp

· Clean and repair of gutters

· Clean sandstone base of building



We understand this offer, if acceptable by the vendors, must then be formalised on the agreed contract form.



Expiry

This offer is only valid until midnight on Friday 10th of July, 2009



Dated: 7th day of July, 2009



xxxxxxxxxxxxxxx

Red_V_Roger

If there is any competition for the property, the agent will expect that you sign almost unaltered his form of contract and pay your initial down payment at the same time.

Then you have 5 working days to get the surveys done, finance in place etc. Then you either pay your 10% or walk away.

If there is no competition then you may stand more of a chance with your terms.

Daydreamer123

what do you think are wrong with the terms? Or do you just mean someone else might put in an offer without saying subject to finance and inspections?

I don't know if there is competition or not, but we have been told they have already put aside the money into trust for the maintenance listed.

Other than that, we need the inspections and finance approval or we can't afford to buy it anyway.

This is actually very confusing, why is that? It seems like a simple thing. Most people seem to manage! Perhaps its because its my money, not work related so I am much more worried about it!

Swerv-o

That was pretty much exactly what I put in my offer, but I only gave them 24-48 hours to reach a decision. Here they do seem to prefer it if you obtain pest and building inspections prior to making an offer, but like you, I wanted to know that the offer had been generaly accepted before I started off with that stuff.

As Red says, if there is competition for the property, then it comes down to the person that signs the contracts and getst the deposit cheque to the agent first, but don't let the agents bully you. Remember that you are entitled to bypass the agent and take the signed contract and deposit straight to the vendors solicitor if you prefer. Some people are more than happy to buy a house without any of the cheks being done, but you shouldn't be.

Definitely have the contract looked at before you sign it - They are pretty standard in NSW, but still make sure you get good contract advice. I went with a conveyancing house in Canberra for my purchase, and the contract advice I received from them was second to none.

Good luck!


S

Red_V_Roger

I think I would be getting a finance agreement in principle before putting offers in.

We preffered to sign the seller's contract and hand over the initial deposit money (0.25%?) to give us the 5 days to get the inspections done, this means you cannot be 'gazumped' during the 5 days.

We already had our money in place, so that wasn't an issue. At worst we would have lost the 0.25% if the inspections had come back bad. We really wanted the house and there were more than 60 people looking round at the first open house.

We viewed the house and signed 1 1/2 hours later, but we are like that, the last house we bought in the UK (a new build) we had signed within 15 minutes of going to look at the show house!

spottydog

In NSW offers subject to ... are pretty irrelevant, all offers I've placed and received have always been verbal.

Until the contract is signed by both parties either side can pull out without notice or penalty. Once the contract is signed and the buyer has put down the 0.25% deposit the vendor cannot pull out plus the buyer then has 7 days (calendar not working) to complete all their checks & finalise finance etc. If necessary the buyer can ask the vendor to extend the cooling off period which generally the vendor will allow (although they are not bound to by law). Once the end of the cooling off period is reached the buyer has the choice to pay the remainder of the deposit so the contract is binding or pull out and lose their 0.25% deposit.

As others have said get finance pre-approval in advance so you know the bank will lend you the money based on salaries, savings, LVR etc.

With regard to the wording of your original post as a vendor I would reject any offer asking me to do work on the house prior to selling. Your offer price should take work you have noted into consideration (although a poor B&P report backed up with written quotes may give a vendor reason to reduce the initially agreed sale price).

Fixtures and fittings are also a bit different here to the UK, get a copy of the contract and see what the vendor is including/excluding and then specifically negotiate items from there.

HTH

Daydreamer123

Thanks guys.

We have been pre-approved, but this is still subject to the banks decision on the actual house value I believe.

If we don't get this one, there will be others, so not too concerned if we lose it. We are much more concerned about ensuring that there is nothing wrong with the place. Its a pretty old federation place, and with a bit of damp we want to make sure that there is nothing else wrong.

Regards the repairs/maintenance mentioned, that was given to us by the agent as something that they will be doing, so we are happy to leave it in.

So, the offer is in, we'll see what happens. To be honest, the agent has been contacting us almost everyday since our second inspection, so we think she is pretty keen. But like I said, we will be sad because its a pretty place, but if we dont get it, there are plenty others. It is right at the bottom of our budget, so we would be able to find others at least as nice.

Still fingers crossed for us!

Wendy66

We've just brought in NSW didn't put in a letter, just told the agent what we wanted such as pest and building inspection and anything else that applies to you etc.

Swerv-o

That relies an awful lot on the good nature of the estate agent, and as other posters on here have demonstrated, that can quickly change.

Remember that in NSW, most vendors will ask you to sign the Section 66W form which waives the cooling off period. If you don't sign it, then the vendors will often decline to sell the property to you. If you haven't placed subject to conditions in your offer document - such as inspections and finance - then you have no right to withdraw the contract if the inspections are bad, or the finance falls through and only lose the 0.25% deposit - you will lose your 5 or 10% deposit.

I would recommend that you have a written offer accepted in principal, then quickly obtain inspections prior to exchanging the contracts. There may well be a period of jockeying between the conveyancers as well, as yours will probably require some changes to the contract. Mine did, but it was all settled in one day with some minor contractual changes. Never sign the contracts without first having obtained some legal advice on it.


S

Daydreamer123

Thats what we are worried about, they do want us to waive the cooling off period.

Is that normal then, we were worried that it indicated that there was something wrong with the place.

We will proceed as we are planning, written offer, then inspections and full finance approval and then contracts. Our bank has recommended someone to check out the contracts etc and we have spoken to them.

Hopefully it will move quickly if it goes ahead, we have a holiday coming up.

Swerv-o

Waiving the cooling off period does seem to be par for the course here. A w66 form has been included in every contract document that I have seen.

Sounds like you are playing it reasonably cautiously, which is probably the best bet.

Let us know how you get on...


S

Red_V_Roger

On ours, we were pushed the other way...had the cooling off period after the 0.25% was paid, but had to pretty much accept the contract as was without 'subject to' conditions.

Swerv-o

Well, I guess they do like to do things differently down in The Shire...


S

Daydreamer123

Well we put in the offer!!

They have accepted it, so we are trying to sort out the inspections. The lawyers wanted us to do the inspections after the contracts were exchanged, in case someone else offers in the mean time. But the seller wants us to waive the cooling off period, so we will be doing the inspections first.

Yikes, its quite scary, and all seems to happen so fast. I have spent longer deciding on shoes in the past!