What to do before unconditional!!

[FreezingandHot]

Hi all

I have a property which goes unconditional on the 1st of November. The contract is with my lawyer and I am waiting on confirmation that we are set to go.

Should I contact the purchaser to see how they are going with completing this contract, there were 3 conditions i the sale & purchase, Lim, building inspection, an finance
with a short turnaround of 7 days.

Getting nervous now as have not heard anything from the purchaser but have contacted my lawyer to see if there is any progress. I don't want to hound the purchaser but understand I will need to know if all is well on their side.

What do the agents do in this case as I effectivley am acting as one in this case.

Cheers

FH.

[FreezingandHot]

Also, what happens if they are not ready by this date which I think they are.

FH

[Heg]

Hi Patrick
not really a lot you CAN do other than sit and wait. The purchasers have until 4pm on 1st November to confirm whether or not they are unconditional. They have no obligation to you to go unconditional before this. If they have NOT completed all of their conditons by 1st November they may ask you for an extension on those terms. If you refuse, then the contract will be at an end.
When I was a RE salesperson, I would usually arrange a LIM and quite often, a builder for my purchasers. If any problem arose, then the purchaser would let me know quite quickly. It was up to me to try and find a solution and to make the sale stick or I didn't get paid! Lawyers are simply there to check the paperwork and will generally not go out of their way to hold a sale together.They will get paid for whatever work they have done regardless.Some lawyers will let you know as soon as each condition is satisfied, but more often than not, it all happens around the 3-59pm mark on the final day. If you are very concerned, then it can do you no harm to call the purchaser to see if all is going ok. Remember, a contract can be negotiated right up until unconditonal date, so if they have found any minor issues with the building inspection, it may be better to try and resolve them now rather than having them simply walk away from a sale.
Hope this helps.
I'm sure it will all be fine

[FreezingandHot]

Thanks Jo,

That explains it perfectly. Just so nervous at the moment waiting and wondering, I am sure this will be fine but it all is out of my hands is'nt it.

The couple who have the contract are very respectful people and I trust what they do, but you are right nothing is assured till unconditional. The waiting is painful.

On to you, how is the subdivision going, I heard you talk at Deans seminar and it was very fascinating what you had to say.

I dont think I would to a subdivide yet, more to learn.

FH.

[cube]

One approach is to call them and say "I just wanted to check that you weren't waiting for anything from me" - that way it looks like you are worried in case YOU'VE done something wrong, not them, and you wanted to clear that 'nagging feeling' that you were supposed to organise something (LIM, inspection, tea and biscuits......)

cube

[Heg]

.

On to you, how is the subdivision going, I heard you talk at Deans seminar and it was very fascinating what you had to say.

I dont think I would to a subdivide yet, more to learn.

FH.

It is going ok - the build is well underway but the actual subdivision part has been (and still is) a very long process. HUGE learning curve!
I'm sure all will be well with your sale. Keep us posted!
Cheers

[xris]

Hello FH,

Yes, not much you can or really should do, except sit back and twiddle your thumbs.

If the contract has been well written then you should be alright with at least a certain amount of protection.

Just be thankful you are not one of those poor buggers who has signed a contract with a ghastly DD clause on it, which allows the buyer to do nothing. Surely you would never want to do that to somebody else, would you?

xris

[Cliffy]

Just be thankful you are not one of those poor buggers who has signed a contract with a ghastly DD clause on it, which allows the buyer to do nothing. Surely you would never want to do that to somebody else, would you?

Why not? It's their choice whether they sign it or not.

[payjisan]

Agree with Cliffy, here, and I really dont see what all the fuss about DD clauses is. Some people make it sound like using a DD clause or whatever you like to call it is deceptive, or 'not cricket'. At what point is the vendor forced to accept these 'ghastly' offers?

"Ill buy your house for 250k, but I would like 7 working days to make sure that there is nothing wrong with it. If I am happy that all is ok, then I will give you 10k as a deposit between now and when I pay you the full amount."

Sounds perfectly reasonable to me.

[Heg]

Nothing wrong with Due Dil clauses. Looks a lot neater than three or four separate clauses covering LIM, finance, building inspection and valuation etc etc.
Let's face it, if a purchaser does not use a due dil and wants to walk away from a purchase, they will simply use the 'Can't get finance excuse'. Seen it done a hundred times.

[xris]

Well well! Three against one. A keen newcomer, an experienced property businessman and an ex-real estate agent. Boy, have I got my work cut out here. Now I know what it must have been like as a gladiator in the arena. I think you’ve all done this on purpose. You know I can’t resist a challenge. What have you got planned for us next? SuperDad and Phil Jones in the ring during a live telecast?

Oh well, let’s see how I go.

Cliffy…Why not? It's their choice whether they sign it or not.

True, and this is invariably the attitude I have as well. But then, in this case and many others here I try to take the side of the vendors and help them by pointing out one or two facts. One of these facts is that many vendors really do think that accepting a DD clause when selling residential is normal and that they are probably unaware of the risks involved in so doing. Certainly, if they accept most of what is said by people here they would expect to have to agree to a DD clause. But, I do agree, when buying, try for it if your conscience allows, which in my case it usually would.


Pajisan…I really dont see what all the fuss about DD clauses is.

Read on and read some of my other posts.

Some people make it sound like using a DD clause or whatever you like to call it is deceptive, or 'not cricket'.

That is because in some cases it is. On this site, I have read several members, including Dean, say words to the effect “Use this clause instead of a normal DD clause because otherwise you might alert the vendor to what you’re up to. This special clause sounds harmless but it still has the effect of allowing you to walk, just like a normal DD clause. Many vendors are not tuned in enough to realise that”

"Ill buy your house for 250k, but I would like 7 working days to make sure that there is nothing wrong with it. If I am happy that all is ok,

Perfectly acceptable. The problem you have though is that is what a normal offer without DD is to allow you to do. You do not need a DD clause because you as a buyer are covered by other more specific clauses.

then I will give you 10k as a deposit between now and when I pay you the full amount."

The deposit is meant to be paid when the offer is accepted, but I have written enough about that in the past.

Heg…Looks a lot neater than three or four separate clauses covering LIM, finance, building inspection and valuation etc etc. Let's face it, if a purchaser does not use a due dil and wants to walk away from a purchase, they will simply use the 'Can't get finance excuse'.

What has its neat appearance got to do with it?

The flaw with this argument for the vendor, as I am sure you know, is that the vendor does have an element of protection in each separate case, built into the S&P agreement - roughly in order, LIM, BR, Finance. I have written at length about the LIM before. Similarly I have written about BRs. Buyers cannot simply walk away because they change their mind. (Although they often do, they should not be allowed to get away with it as often as they do.) Finance is the weakest of the three, but even then some protection is given to the vendor if the vendor, through his agent or lawyer, insists on having the offer from the buyer made correctly. How often did you, for example, complete the finance part at the front of the S&P fully, so as to give your client, the vendor, the ability to form a fuller and more reasoned opinion as to the strength of the buyer’s offer based on the financial information supplied by the buyer?

Just because buyers often pull out on finance, or anything else, does not mesn that they should be able to. In my opinion it seems that a lot of lawyers and agents are not serving the best interests of their clients by acting for them and advising them incorrectly.

Seen it done a hundred times.

Doubtless, but it still ain’t right.

Now, onto a more general comment (rant if you prefer).

The S&P agreement is an excellent, detailed legal document which has developed over many years in the hands of top legal minds backed by a lot of experience in the way conveyancing works. There has been a trend over the last few years to try to circumvent this agreement by changing or ignoring different parts of it. The deposit issue is but one good example. This DD thing is another trend that is starting to creep in. The problem is that too many people are beginning to think it is normal and correct, which in many cases it isn’t. I keep saying it, but I hope people will start putting their feet down and put a stop to all this. Agents probably have the leading role to play here.

If anyone is wondering what the problem with DD clauses (or deposit on confirmation) is on a normal residential property, then just look up one or two of my earlier posts.

And if anyone does not understand what I am talking about, a DD clause at the back will invariably over-ride many of the clauses built into the contract, including those which give an element of protection to the vendor. To use a rather colourful analogy, the vendor is left standing stark naked in the middle of Queen St for two weeks with his pants tied around his ancles.

xris

[SuperDad]

What have you got planned for us next? SuperDad and Phil Jones in the ring during a live telecast?

I'm keen! Let me know when and where, and I'll be there.

Paul.

[Monid]

Now thats an episode of Richmastery TV that I would watch in a heartbeat

David

[Ivanhoe]

Well, I understand agents - they want to hold buyer on a short leash as homebuyers are buying on emotions (read RE adds if you have any doubt) and being emotional beings they may change their mind easily. We can discuss if it's OK or not to put someone in emotionally volatile position and then get them sign a contract from which they will not be able to walk away easily - "if your conscience allows" bit clearly does not apply here as collective conscience takes a nap.
So the overall sentiment in the industry is that buyer should not be trusted and to some degree I understand it - look at all these 'back on the market due..."
What I cannot understand is this: every time I make an offer I have an intention to buy the property - provided it does not have any hidden defects - and I honestly inform agent and buyer about it - via DD clause.
I do not enter agreement with an intention to walk away - I want to buy! And so far we went unconditional on evry single property that met our criteria.
Now agents do understand that one can walk from under ANY clause and to sue is not economically viable - as it will take property off the market for a VERY long time and also it's bloody expensive - and not worth it (at least in my under 300k range).
Yet they still want me to lie and use specific clauses (while they know that I will still do my Due Diligence which will cover ALL aspects of the property), being aware that ANY other clause I will use is no stronger than DD and does not REALLY protect the vendor (yet offers better CYA to the agent).
I guess too many people in RE industry forgot that contract is just a legal way of expressing agreement and intentions of two parties:

"Ill buy your house for 250k, but I would like 7 working days to make sure that there is nothing wrong with it. If I am happy that all is ok, then I will give you 10k as a deposit between now and when I pay you the full amount."

Sounds perfectly reasonable to me too.

[Monid]

Some people make it sound like using a DD clause or whatever you like to call it is deceptive, or 'not cricket'.

That is because in some cases it is. On this site, I have read several members, including Dean, say words to the effect “Use this clause instead of a normal DD clause because otherwise you might alert the vendor to what you’re up to. This special clause sounds harmless but it still has the effect of allowing you to walk, just like a normal DD clause. Many vendors are not tuned in enough to realise that”

Just to add some evidence to Xris claim (Sorry its the academic in me... always got to reference):

As my website says I recommend using the purchasers condition version of DD, vendors and agents haven't heard of it and happily sign it.

http://www.propertytalk.com/forum/showthread.php?t=7876&page=2

And this:

Hi guys. Id love to know your views on the best dd clause, and what the best disguised legally validated clause would be !

http://www.propertytalk.com/forum/showthread.php?t=8323

And I have seen people who occasionally sell properties such as Robyn Grinter say that if they get a contract with a DD clause it would go to the bottom of the pile in terms of the offers they get...

David Hunter