Useful Sale and Purchase clauses
Below are some of the generic clauses/ conditions that may feature on sale and purchase agreements. These are plain English clauses and will suffice in a majority of cases. There are plenty of variations of these basic clauses but the purpose and intent is largely the same. If you are needing something more specific or complex, then talk with your solicitor. Usually a conditional period of between 1 and 7 working days (with 3-5 working days being the norm) will be sufficient for the completion of most of these clauses. The LIM clause may need 10-15 working days to complete, it is worth checking with your local Council to find out how quickly than can process a LIM before putting a time limit on yourself in an offer. In a situation where competition is expected, it is good to do as much homework as possible before your offer or tender is submitted. The fewer the clauses and the shorter the conditional period, the more attractive your offer is to the owner!
Title Search
This offer is conditional upon the Purchasers Solicitor searching and approving the Title on the above property within working days of acceptance of this offer.
Valuation Report
This offer is conditional upon the Purchaser arranging a Valuation Report from a Registered Valuer , which is acceptable in all respects to the Purchaser within working days from the date of acceptance of this offer.
Builders Report
This offer is conditional upon the Purchaser arranging a Builders Report from a Certified Builder or Building Inspector, which is acceptable in all respects to the Purchaser within working days from the date of acceptance of this offer.
Land Information Memorandum (LIM) Report
This offer is conditional upon the Purchaser/s reviewing Local Council records including obtaining a LIM Report if they desire and being satisfied with such records and LIM Report in all respects within working days of acceptance of this offer.
Partial LIM or Property Report
This offer is conditional upon the Purchasers searching the council records and/or obtaining a Property Report if they desire and being satisfied with such records and Property Report in all respects within working days of acceptance of this offer.
Subject to Purchasers Property Selling
This offer is conditional upon the Purchaser arranging the unconditional sale of property situated at on terms and conditions acceptable to them within working days of acceptance of this offer.
Conditional upon Purchasers Property sale becoming Unconditional
This offer is conditional upon the existing signed Agreement for the Sale of the Purchaser’s property situated at (address) becoming unconditional on or before 5PM on (date).
Due Diligence Clause
This offer is conditional upon the Purchaser completing and being satisfied with a due diligence program in respect of the subject property. Such program may include but is not limited to: approval of the title, builders report, Council Records search or any other matters which the Purchaser at the Purchasers’ discretion may consider relevant to the completion of the purchase. This condition is to be satisfied within days of acceptance of this offer.
Regarding Due Diligence clauses, many agents and solicitors frown on the use of general due diligence clauses as they are too vague to be able to hold the buyer to the offer in the case that they pull out of the deal in the conditional period. Be aware of that use of a Due Diligence clause may work against you if you are in competition for a house with other buyers. I experienced this a number of years back when I presented four offers to an owner and they accepted an unconditional offer $23,000 less than the top offer which featured a 10 working day due diligence clause from a developer who wanted to subdivide the land but didn’t have time to do the homework needed before the deadline for presentation of offers. The owners expressed the sentiment that this offer was almost non existent because it was so vague and that they preferred to take the offer that definitely mean’t that their home was sold.
You are reminded that the agreement for sale and purchase of real estate is a binding agreement. If you have any doubts, please seek professional legal advice before submitting your offer.
August 26 2009 04:01 pm | Home Buyers
David on 26 Aug 2009 at 7:37 pm #
David
Seeing a few Relocation clauses (http://3.ly/hzf) being trotted out again locally too.
Ariel Levin on 05 Jun 2010 at 1:00 pm #
How useful!
Thank you very much.
Used builders report clause to help some friends this morning.