Congratulations, you’ve accepted an offer on your home! Now, what comes next?
This can vary depending on the conditions of the offer and other external factors. While the transaction often proceeds seamlessly, unexpected complications may arise, and you will need to work closely with your REIWA agent to navigate the sale process.
Understanding the offer conditions
When you receive an offer on your home, it’s important to understand any conditions attached to it. Common offer conditions include:
- Cash unconditional: This is the simplest type of offer, where the buyer has the necessary funds available to pay for the home by the settlement date.
- Subject to sale: Here the offer is subject to the sale of a buyer’s current property, which requires them to successfully settle their property first. This can create uncertainty for you, as the smooth settlement of the buyer’s property is outside of your control.
- Subject to finance: Buyers who make an offer subject to finance need time to secure a mortgage. This may take them some time and there is always the possibility that their loan application may not be approved.
If you have a subject-to-sale offer you may consider including a “48-hour clause” in the contract. This means if you receive another offer while waiting for the buyer to finalise their sale, you can invoke the clause and give the initial buyer 48 hours to make their offer unconditional to proceed with the purchase. If the buyer cannot do so, you can accept the new offer.
What happens if an offer falls through?
It does happen – sometimes a buyer’s mortgage application can be declined even if they were approved in principle. If the sale does fall through, your agent will act quickly to find an alternate buyer.
Your agent will have a network of buyers who were interested in the property during the original campaign and will reach out to them to let them know the property is back on the market, while updating marketing materials and possibly scheduling another home open to drive more buyer leads.
Building and pest inspections
In most cases, it is the responsibility of the buyer to organise and pay for pest and building inspections. These inspections are crucial for identifying any structural or pest-related issues with the property.
If issues are discovered, negotiations may follow and may include price adjustments or repairs.
You may want to proactively arrange a building and pest inspection yourself. Services such as Before You Bid will conduct an inspection and have the report ready, so your agent can invite interested buyers to view the independent report (at a small fee) before making an offer. It could reassure buyers who are considering making an offer and prevent disputes and delays during the settlement process. The successful buyer can then purchase the report and have it transferred into their name for insurance purposes.
Settlement conditions
In the current market, sellers often have more flexibility in choosing settlement conditions.
The standard settlement period is between 30-90 days, but you should consider your own moving plans, financial needs and market conditions when setting a date. A longer settlement may allow you more time to find a new home if you haven’t already.
What happens on settlement day?
Settlement day is the final step of the sale and marks the official transfer of ownership to the buyer. It includes:
- Transfer of funds: The buyer’s settlement agent will transfer the funds to your settlement agent – this should only be done via a secure electronic transfer. With the increase in cyber attacks targeting all industries, it’s wise to be extra vigilant and ask your settlement agent about their cyber security protocols. Agents need to comply with Verification of Identity (VOI) requirements to protect clients.
- Finalising legal documents: All documents relating to the transfer of ownership will be signed, and title deeds will be transferred to the buyer’s name.
- Final walkthrough: Some buyers may request a final walkthrough to ensure the property is in the agreed-upon condition.
- Vacating the property: It is essential to be out of the property by the agreed-upon settlement time. Failure to do so can result in penalties.
- Utilities and services: Ensure you have disconnected any utilities or transferred to the new owner where applicable.
Once everything is complete, your agent will hand the keys to the new owner – and you can finally pop that Champagne!
