LOOKING AT PUTTING IN AN OFFER TO BUY A PROPERTY THAT IS SUBJECT TO SALE???
If you are relying on funds from the sale of one property to purchase another property, we recommend ensuring your purchase contract is subject to the sale. This will ensure that if, for whatever reason, your sale doesn’t settle, you are not locked into the purchase.
We recommend the following clause:
Subject to sale
1.1 This Contract is subject to and conditional upon:
(a) The Buyer entering into a Contract for the sale of the Buyer’s property at [insert address] (Buyer Sale Contract) within [insert number] days of the date of this Contract;
(b) The Buyer Sale Contract going unconditional within [insert number] days of the date of this Contract; and
(c) The Buyer Sale Contract settling within [insert number] from the date of this Contract.
1.2 If the Buyer is unable to comply with any of the above conditions by 5.00pm on the relevant due date, then either party may terminate this Contract and in such event any Deposit paid by the Buyer shall be refunded in full to the Buyer. The refund of any Deposit to the Buyer will be the Buyer’s only remedy.
1.3 This special condition has been inserted for the benefit of the Buyer and may be waived by the Buyer at any time.
GIVEN YOUR CIRCUMSTANCES THE FOLLOWING MAY ALSO BE RELEVENT
Simultaneous settlement
If you would like the settlement of your sale and purchase contracts to occur simultaneously (rather than the sale settling prior to the purchase), we then also recommend the insertion of the following:
1.4 Settlement of this Contract shall be contemporaneous with the settlement of the Buyer Sale Contract.
Sunset date
A seller may also like to include a sunset clause which gives them the opportunity to terminate the contract if they receive a better offer in the intervening period. We recommend the following:
Sunset date
- In the event that the Seller receives an offer for the sale and purchase of the Property on terms considered more favourable to the Seller in their absolute discretion prior to satisfaction or waiver of special condition [insert clause reference] (Subject to Sale) by the Buyer then the Seller may give notice to the Buyer of such offer being received (Notice).
- If the Buyer does not give written notice to the Seller that the Buyer will proceed unconditionally with the purchase of the Property under this Contract within 3 business days of the Seller giving the Notice, then this Contract will be automatically terminated and any Deposit paid will be refunded in full to the Buyer. The refund of any Deposit to the Buyer will be the Buyer’s only remedy.
