Commissioner's Blog - Considerations before making an offer on a property
With Consumer Protection Commissioner Anne Driscoll
Things to consider before making an offer on a property
You might walk into a home and fall in love with it very quickly but it is important to do your own research and ask questions before making a written offer on a property. There is no mandatory cooling-off period for real estate contracts in Western Australia, so make sure you know what you are getting into before signing documents and committing, especially if you are putting down a deposit you cannot afford to lose.
Most properties in Western Australia are sold through a negotiation process through a real estate agent using an offer and acceptance form. Offers are made in writing using two pieces of paperwork: 1) The Contract for Sale of Land or Strata Title by Offer and Acceptance form, commonly called the O & A; and 2) the Joint Form of General Conditions for the Sale of Land, normally referred to as the General Conditions.
Sellers can accept the offer, make a counter offer or reject it.
Before completing the forms think about getting your own independent legal advice to make sure a contract meets your requirements. The following recommendations may also help:
If you are borrowing money to buy the property it is important that you complete and sign the box on the first page of the O & A titled ‘Finance Clause Is Applicable’. It is worth researching loan interest rates and conditions offered by various financial institutions to see where you can get the best deal before making a written offer. There is a clause on page one of the O & A where you can name your preferred lender. Pre-approval is wise to avoid disappointment. If the loan isn’t granted by that particular lender, the contract may no longer be valid. If you don’t specify a lender you may have to take any loan offer you can get prior to the proposed settlement date.
Buyers have the option of seeking extra clauses to the O & A as ‘special conditions’ that they would like the seller to agree to. It is advisable to get expert advice to ensure special conditions are drawn up correctly. In most instances special conditions ought to say what action needs to be taken, a due date, who will pay for it and the consequences if it does not happen by the deadline. Special conditions can cover a range of matters but they are often used to address the need for repairs to a property, and for gas, electrical and plumbing fixtures and fittings to be in working order.
Both parties need to initial any special condition added to the O & A to indicate they are in agreement. If the seller does not agree then the special condition is not part of the O & A.
What stays? What goes?
When a property is sold, generally features which are fixed to the building such as carpets, light fittings and built-in air conditioners remain. Items which can be removed from the property are commonly called chattels. They can be taken by the seller.
Since it might not be clear as to whether some items are fixtures or chattels, buyers and sellers should consider listing all items in the contract, even things like blinds and curtains, garden sheds, built-in dishwashers and wall-mounted tumble dryers. For higher cost items such as dishwashers, it may be helpful if the brand and model is specified in the contract. Consumer Protection has heard of people moving in to find a cheaper make of dishwasher in a property than what was in there previously.
It is a good idea to obtain a timber pest inspection report from a pest controller or a building inspection company if you are buying an established home. If you choose to do so, remember to put a special condition on the O & A. It is common for a special condition to say that if activity by timber pests is sufficient to cause, or have caused, damage, then the seller must pay for any treatment and repairs prior to a set date or the buyer has the right to seek to withdraw from the contract of sale.
Certificate of Title
Apart from asking the seller or their agent to see a copy of the Certificate of Title, you should conduct your own inquiries to check if there are any restrictions on the title affecting the property. Be aware that not all land interests are recorded on the Certificate of Title. It is recommended that you refer to the Landgate website www.landgate.wa.gov.au for further information on land interests. You should also contact the relevant local government authority regarding matters which are regulated by the Shire, such as extensions and pool fencing.
For more information about buying and selling property, contact the Consumer Protection Advice Line on 1300 30 40 54 or visit the relevant section of the website: www.commerce.wa.gov.au/who-we-assist/home-buyer-owner