Importance of Contract Reviews

Purchasing and owning your own home has long been part of the Australian dream. Whilst the pandemic has seen fewer property transactions being completed compared to this time last year. It has been evident that time at home in isolation has given people time to reflect on what is important. Many millennials have decided that this Is the perfect time to try their luck in the property sector and are in search for a bargain for their first home.Private 1 on 1 inspections are now allowed in accordance with the introduction of Victoria’s Stage 3 restrictions and buyers are flooding the market. To avoid missing out on your dream home, it is more important than ever that purchasers have their Contracts of Sale reviewed by a Conveyancer prior to inspection.Things that are considered during a Contract Review;1. What are you really paying for?The Contract of Sale and S32 of a property not only provides you with important information on the property to be purchased but it includes a list of items which are also sold with the property for the specified price.2. Appearance of Special Conditions?Special Conditions differ from General conditions because they have been specifically inserted into the contract to protect the rights and interests of the Seller. Common special conditions include clauses preventing future compensation for patent or latent defects with the property. Such conditions should be negotiated out of the contract prior to signing to avoid potential issues at settlement.3. Does the cooling off period apply?In Victoria, the cooling off period is only applicable to certain Contracts of Sale. Purchasing properties sold via auction and properties of 20 hectares or more where the land is used for production and farming purposes are two common exceptions to the cooling off period. Where a purchaser ends a contract during the cooling off period they automatically forfeit the greater of $100 or 0.2% of the Contract price.4. Are there any restrictions on Title?Caveats, Covenants and Planning agreements that may impact both the clear transfer of the property and its future use are found on the Title. Therefore, it is imperative to have a lawyer or a conveyancer explain the implications of these restrictions to ensure the property meets your requirements.5. When is settlement?When negotiating the settlement date it is important to consider your current living situation are you renting, selling another property? These factors should determine when you will finalise your purchase to ensure you can seamlessly transition from one dwelling to the next. Settlement timeframes are usually anywhere between 30-90 days. Whilst settlements can be brought forward by mutual agreement of the parties it cannot be postponed without the parties potentially incurring penalties.