What happens when an offer falls through?
HAVING a sale offer withdrawn on a property can be one of the most frustrating and disappointing experiences for vendors.
But there are ways to reduce the risk of it happening and options for those who find themselves in this situation.
Paul Nugent (OK), director of Wakelin Property Advisory, says vendors need to protect themselves from the prospect of a withdrawn sale offer by sticking to strict conditions.
“Never sell a property subject to conditions such as building reports or finance,” he said.
“Always insist on a 10% deposit – that will make buyers think twice before defaulting and be a source of compensation if things go wrong.”
To minimise the risk of potential buyers pulling out of the deal, Mr Nugent recommends vendors obtaining a cheque for the full amount on the day the contract is signed.
This can be difficult so at the very least ensure a 5% deposit is handed over within two busi- ness days of the contract date and the balance in the following two weeks, Mr Nugent said.
Ideally, a savvy real estate agent will be able to spot a problematic purchaser early and make sure a botched sale is avoided.
But if a sale offer does fall through, vendors suddenly face the prospect of another expensive and time-consuming campaign to try and sell their property again.
In this event, Mr Nugent recommends swift action, focusing on two objectives – finding an alternative buyer and recouping costs from the defaulting party.
“Engage the sales agent to identify and approach any parties who had been interested in the property during the original campaign, and take advice from a solicitor about making a claim on the defaulter’s deposit that is held in trust by the sales agent for costs around remarketing the property, any losses due to a shortfall in the subsequent sale price and any additional funding bridging costs,” he said.