Buying a house is one of the most significant transactions most of us will do in any given year, at least in dollar terms.
Yet, it never ceases to amaze me how lightly so many people enter into a real property contract without undertaking the most basic of enquiries.
Whenever a solicitor has the opportunity of meeting with a client prior to them executing a contact of sale, we recommend a Due Diligence clause be inserted into the contract.
A well drafted due diligence clause will enable you as buyer to undertake any investigation you deem fit prior to the expiry of the due diligence period (usually 14 to 21 days is enough).
Such enquires may include:
- Undertaking a valuation
- Undertaking various government searches such as a contamination, flood, road or train line search
- Performing a soil test
- Undertaking a building and pest inspection
or even something as simple as visiting the property during heavy rain or on a Friday night to see how noisy the neighbours are.
If you are in any way unsatisfied with your investigations, you are permitted to withdraw from the contract without giving any reason and without penalty.
Unfortunately most real estate agents will discourage you from inserting a special condition such as this into the contract (as they have a vested interest in a contract becoming unconditional, namely their commission), and will say things like: “the vendor will never accept that”.
Your immediate response to these sales techniques should simply be: “well these are my terms and the vendor can take it or leave it”.
You will be surprised how often the vendor accepts it without query.
Remember to always look out for your own interests in the transaction or find a lawyer who will do so for you.
Be a smart investor and insist on the contract being subject to due diligence.
For more information on due diligence or any other property related issues please contact Ashley Gullo from Brandon and Gullo Lawyers on 07 5479 4733, firstname.lastname@example.org or www.bglaw.com.au.