Can we make multiple offers on different properties at the same time? If not, is there a more legitimate way of working around this problem? On account that we're serious investment buyers and not wishing to miss out on potentially good deals we've shortlisted in a particular area. More often, you may end up having to negotiate each of them and really wish to only settle with the few best bargains that works in your favour. In the interest of time, I'm hoping to find ways to shorten the negotiating timeframe by having to nego multiple offers at the same time rather than to work on the offer outcome one-at-a-time and potentially lose opportunity cost that way. I was told by an opinion that you can't and you need to wait for an outcome of the first offer before you can make the another. Are there any binding clauses that we can't do that? Would need advice if there are any (legal) implications or obligations of such circumstance.
The only thing i can think of is eg. you put in 10 offers at same time and all of them are accepted! In dat case, u've got to really make sure your pocket is deep enough to take all in. But what are the chances that all of them are accepted in the first offers?!
dan.
Hi Dan
We operate mainly in NSW and, as far as we know, there's nothing stopping us from making multiple offers. Of course, as always, check with your solicitor.
In fact we use the concept of multiple offers and a time limit on our offers, to insert some urgency into the transacction, e.g.:
"Good Until: 10am Tuesday, xxth May, 200x. Please be aware that we are making multiple offers."
Good luck.Cheers, Paul
Paul Dobson | Vendor Finance Institute
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I guess you could use the "cooling off clause" if all offers were accepted.
Jacqueline
I would be very careful in making offers. you could have binding contracts if your offers are accepted and multiple binding contracts could be painful!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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best to be aware that cooling off penalties were instigated to protect vendors from buyers doing what you are looking at and I am pretty sure this applies in all states.
Verbal offers and negotiating are not binding either way so you could miss out if you go that way too.
pulling out under finance and then buying elsewhere can have a legal implication
Building and pest clauses can provide an out but will cost for the inspections.
The way many sale contracts are prepared and handled, many loopholes could be used to pull out if push came to shove.This is the case in Queensland , where sales agents do the contracts and some I have seen make me laugh.
A good conveyancing solicitor is worth their weight in gold. They will be able to insert clauses as paul suggested with time limit on offer. This will vary from state to state.
Keeping on the agent to act quickly may help, as will correct handling of the documents if faxing.
You are lucky to be in an area where there are so many good deals presenting themselves.
Hope this helpsThe way I would go about this is buy putting in offers with very small timeframes with a clause similar to Paul stated above "eg. "good until xxxpm on xxx date". If you have a short timeframe of say 24 hours, then you will know very quickly whether your offer will be accepted.
Don't put in any more offers than you are prepared to contract. What if all of them accept your offer? The beauty of a very short timeframe is that you will know very quickly whether you have secured the property or whether you should continue making offers.
Let the agent know that you are making several offers. I have sold several properties before and usually I ignore offers with timeframes because I feel pressured, but if I know that it is because the purchaser wants to be free to make other offers, then I will give an answer within a few hours. The agent should tell the vendor the reason for the short timeframe.
If you were to make several offers and they were all accepted, you could take advantage of the cooling off period but, in my opinion, RE Agents will be less likely to consider you a serious purchaser. Why would an agent continue to deal with you in the future, let you know of deals before they are released to the public, if you then just cool off without any good reason? As much as people say that RE Agents work for the vendor, the truth is that they work for themselves and if they have a purchaser who they know is a straight shooter and doesn't mess them around and makes life easier for them, they are more likely to want to deal with that purchaser.
Cheers
K
If all offers were accepted then I would imagine that the bank wouldn't loan you the money to buy all the properties anyway so you could legitimately cancel under the finance clause, couldn't you?
Jackie1966 wrote:If all offers were accepted then I would imagine that the bank wouldn't loan you the money to buy all the properties anyway so you could legitimately cancel under the finance clause, couldn't you?Possibly, depending on how you were to word the clause and the vendors were notified in time.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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in QLD you can make multiple offers but if they are accepted you can not pull out unless you use the cooling off period which will incurr a .25% of the total purchase price penalty. If your looking at 10 properties thats alot of bread
in QLD you can make multiple offers but if they are accepted you can not pull out unless you use the cooling off period which will incurr a .25% of the total purchase price penalty.
This assumes that all of the offers were cash unconditional offers otherwise as Jackie has mentioned you could terminate on the basis the approved finance was not acceptable to you the buyer and the full deposit would be refunded.
Richard Taylor | Australia's leading private lender
In NSW, a contract is not binding unti it has been signed and exchanged. Until that stage, it is still a negotiation with the buyer able to pull out and the vendor able to sell to someone else even after offer and acceptance, hence some people think they have been "guzumped" even though they had not yet entered into a binding contract.
As always, please confirm with your own solicitor and this may differ in other states.
Mick
We recently lost a sale because, even after several extensions, the buyer could not get finance.
Our solicitor sent me a bill for $330 for his time, being a lot of communication with the buyer's solicitor. Ouch!
So if a buyer comes to me and wants to buy our house, I want to know they are likely to go ahead with the purchase.
Having said that, I myself have sometimes put in multiple offers. I remember once a REA ringing me and asking if I wanted all of them presented, or one at a time. I said All. I will figure out how to pay for it later if they all say yes. If they are good deals, I can find JV partners easily enough, or refi other properties to raise the deposits.
However, the most we ever bought at one time was three, back in the days when houses were around 100k, so it wasnt' too bad.
Qlds007 wrote:in QLD you can make multiple offers but if they are accepted you can not pull out unless you use the cooling off period which will incurr a .25% of the total purchase price penalty.
This assumes that all of the offers were cash unconditional offers otherwise as Jackie has mentioned you could terminate on the basis the approved finance was not acceptable to you the buyer and the full deposit would be refunded.
That's useful information, thank you.
Rudi
newbi2 wrote:In NSW, a contract is not binding unti it has been signed and exchanged. Until that stage, it is still a negotiation with the buyer able to pull out and the vendor able to sell to someone else even after offer and acceptance, hence some people think they have been "guzumped" even though they had not yet entered into a binding contract.As always, please confirm with your own solicitor and this may differ in other states.
Mick
Hi Mick
Bear in mind that a contract doesn't have to look like a formal contract. For a contract for the sale of land to be binding it only has to have about 5 things including location, amount, parties, and signature (plus 1 more??). A note on the back of an envelope could satisfy as a contract.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Hi Terry,
As always your comments are thought provoking and informative. Do you know of where I can find more information on this? I was of the understanding that there were certain documents that needed to be included for it to constitute a contract (eg council searches etc). Just curious.
Thanks,
MickHi Mick
Have a look at any first year law textbook on contracts such as "contract Law in Australia" by Carter – btw you can pick up very cheap books in the 2nd hand uni bookshops.
It looks like contracts for land must be in writing and must contain the following essential terms (the 3 ps)
– Parties
– Property
– PriceThe document must also be signed – signatures can be in many forms too, eg. a secretary signing on your behalf in front of you.
All these requirements need not be on the same document too, they could be spread out over a few documents of different dates.
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
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