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When negotiating a contract as a vendor, it is our opinion that unless problems are being encountered in selling the property, the relative significance of the variables within the contract have to be weighed up.
The main variables within the contract are: the contract price, the amount of deposit, the contract settlement date, and the finance clause. Certainly contracts can contain other variables such as requirements on the vendor, or the purchaser to ensure certain matters are attended to prior to settlement. The first mentioned variables are the main matters encountered with most contracts.
The important matter with contract clauses is to look at your own requirements and attempt to structure the contract to satisfy such requirements. If you are selling your house and have not as yet obtained alternative accommodation a longer settlement date that still reflects your asking price is preferable than a cash buyer offering you 10% less than your asking price. Further, given the right types of guarantees such as registered 2nd mortgages and legal advice you may be much better off accepting a contract that reflects your asking price but requires you to leave a % of money in as a 2nd mortgage (with appropriate security).
There is another scenario which may be attractive when a contract is offered to you reflecting your asking price but subject to the sale of the purchasers residence. There are numerous examples where the purchaser is attempting to upgrade their accommodation by buying a property of greater value to the one they are selling. Accordingly, if you find yourself in a position where your sale is dependent on the sale of the purchaser’s house you may consider buying the purchaser’s house.
For example, if you are selling a $1,500,000 house and you have a contract reflecting this sale but it is subject to the sale of a $490,000 house you may give consideration to buying the $490,000 house. This allows your sale to proceed and frees you up to move forward but more importantly you are then in a position to be selling a house in a lower price bracket which reflects a much wider market.
HOW WE ASSIST
Our office can direct you to associated professionals to assist with contract preparation such as the matters referred to above.