Hi fellow investors,
2015 looks like the year I put my learnings into practise and also finally stop procrastinating, however before I do so I would like to get your opinions and views on submitting a “non-binding” letter of offer
The below is in respect to submitting an offer before having my conveyancer review the contract;
– If I submit a letter of offer and the buyer accepts, can I rescind my offer after my conveyancer reviews the contract and advise against the purchase without penalty? Some say a verbal offer will suffice, however I believe an offer in letter comes across more serious & genuine (plus I plan to have multiple offers with various terms)
Also to add further context I have negotiated a flat fee with my conveyancer whereby she will review up to 4 contracts with 1 settlement, as such I don’t want to send every contract if I know my offer hasn’t got any legs as I will quickly chew up my allowance of 4 contracts?
Has anyone been in the same position?
Any feedback is appreciated…Thanks
Be careful, your written offer may amount to a contract if the other person accepts. Best to use a solicitor to get legal advice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terryw,
Terryw et al, what are your thoughts on an “Expression of Interest” or “Invitation to deal” letter? Would an “offer” in this form be binding?
Also, putting myself in the Vendors shoes, would you see a verbal offer as serious and genuine as an offer in writing?
Also to add further context I have negotiated a flat fee with my conveyancer whereby she will review up to 4 contracts with 1 settlement, as such I don’t want to send every contract if I know my offer hasn’t got any legs as I will quickly chew up my allowance of 4 contracts?
That’s quite generous of them – I don’t know many that will do that.
Like Terry mentioned – prob best to put any offer via your solicitor if you’re concerned about wording, clauses, etc.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Terryw,
Terryw et al, what are your thoughts on an “Expression of Interest” or “Invitation to deal” letter? Would an “offer” in this form be binding?
Also, putting myself in the Vendors shoes, would you see a verbal offer as serious and genuine as an offer in writing?
Depends on the wording of the content rather than the title of the document. Under contract law an offer once accepted can become a contract. And a contract can be oral. But for a contract relating to land to be binding it has to be in writing – could be an informal back of the envelope type writing, a formal contract is not really needed.
So best to seek legal advice on your document before submitting. It would probably be highly unlikely that some would consider your offer a binding contract, but still a risk.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi @hungpham. Great questions. It’s always best to submit your offers in writing but to do so with a “get out” clause so you can back out if you decide not to move forward. I’ve written an article on this topic which should be posted on PropertyInvesting.com in the next few days. Thanks for the inspiration :-)
Jason Staggers | JasonStaggers.com
http://jasonstaggers.com
Email MeI’m glad that I have inspired you to finish of the article, I look forward to reading it
I’d add to what @jason_staggers has said.
If you’re making multiple offers and not sure which ones you’ll go ahead with then a ‘get out’ clause, or cooling off period will help you. It doesn’t take that long to plug your details into a contract either so you may even prefer to just give the vendors contracts rather than the letters you’re talking about. You could have a chat to the conveyancer about standard terms you will include in every contract and then just adjust the price for each property you make an offer for, if that works for you.
On the other hand, if you’re certain that you want to go forward with a particular contract then there’s no reason to include a ‘get out’ clause. All it does is weaken your offer as far as the vendor is concerned. Therefore by excluding the ‘get out’ clause’ you may be able to offer a bit less money and still get the contract over the line.
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This reply was modified 9 years, 10 months ago by
JBC.
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