‘Sign conditions early to protect your purchase’

MARTEL Maides has urged prospective buyers to sign conditions of sale at the earliest opportunity to avoid disappointment.

Martel Maides director Nick Renny said the acceptance of an offer was usually a good sign that a vendor is agreeing to sell. However, nothing is legally binding until conditions of sale have been exchanged.

Mr and Mrs Smeja’s unfortunate situation could have been avoided had the conditions been signed sooner, he said.

‘Mrs Smeja’s frustration is understandable and we genuinely sympathise with her because she has been left disappointed and out of pocket,’ he said.

‘This is something that can happen to any purchaser, which underlines the importance of exchanging conditions of sale at the earliest opportunity.

‘That offers the vendor a very firm sign of genuine commitment by the purchaser and, more importantly, it provides protection to a would-be purchaser for an agreed period.’

Once conditions of sale are signed and a deposit is paid, there is a legally binding agreement.

However, this is normally subject to the purchaser obtaining mortgage approval, a satisfactory survey and title checks being carried out.

If any of these conditions are not met within the agreed timeframe, the buyer can withdraw without penalty and would receive their deposit back plus any interest.

But a vendor cannot withdraw without paying the prospective buyer an amount equivalent to the deposit.

‘We don’t know what advice Mrs Smeja was given by Swoffers or her advocate, but certainly we would not have suggested waiting until she had finance in place and had completed the survey,’ Mr Renny added.

‘All of that can be done after the conditions of sale are signed and, in the meantime, the vendor is precluded from accepting another offer without incurring a very substantial penalty.

‘In this instance our client initially agreed to sell the property to Mr and Mrs Smeja, but unfortunately two weeks after accepting the offer, conditions of sale had still not been exchanged, and often that is not a good sign.’

Mr Renny said that, because of that, his client chose to accept an offer from someone who was willing to sign immediately.

‘In those circumstances a vendor is entitled to take any action they wish and our role was simply to act on our client’s instruction,’ he added.