14 Oct, 2019
Types Of Contracts
First Home Buyers Loan,Home Loans Comments Off on Types Of Purchasing Contracts- You Must Know

Different Types Of Purchasing Contracts

Unconditional Contract

An “Unconditional Contract” as suggested is an agreement where you purchase the property for an agreed price without any conditions.

Conditional Contract

A “Conditional Contract” includes conditions that need to be satisfied before the contract becomes unconditional.

Finance Condition

A typical condition found in most contracts is a finance condition which states that the contract is subject to financial approval by a lender within a pre-determined number of days. Another common condition is an inspection of the property by a Building and Pest Specialist by a pre-determined date.

Sellers can also have conditions that they require as part of the sale. For example, a seller may require a specific date for the completion of their sale, to align with another contract, linked to the purchase of their new property. A seller may want to retain a fixture of the property, like an expensive chandelier for sentimental reasons.

As a Purchaser, conditions can arise for many reasons. You may identify some repairs that you would like to have rectified that the seller may have to agree with. The property may have a piece of furniture that is fundamental to the look of the property that you may want to include in the purchase price, alternatively, you may want to retain a garden shed or a garden statue. These examples are just a few of the reasons why you would include special conditions on your contract that the seller would consider as part of your offer.

Special Conditions

Some conditions, like finance, or pest and building inspections are straightforward and generally applicable to most purchase contracts, therefore they are accommodated within a standard contract in simple terms. Other conditions are referred to as Special Conditions. Special Conditions can be prepared by an agent for you or you can ask your solicitor to prepare the special conditions which are then applied to the contract. Obviously, using your solicitor is the best option available.

TIP If you choose to accept special conditions prepared by an agent, you can ask your solicitor to review these conditions before signing the contract. This ensures you fully understand how the special conditions will affect your contract and eliminate later surprises.