In this current buoyant real estate market, buyers are discovering they need to move fast as competition from other purchasers is very strong. Demand is outstripping supply, meaning that there are many disappointed buyers out there who are missing out and even being ‘gazumped’.
At First National Coffs Coast, our professional team assists, educates and encourages buyers to commit to their purchase, once their offer has been accepted by the vendor. We recommend to both the purchaser and the vendor that they each sign a conditional contract (with a 5 or 10 business day cooling period), the purchaser pays a small deposit (0.25% of the purchase price) to protect themselves during the cooling off period while doing the relevant due diligence, and then the vendor and purchaser can both celebrate once contracts are unconditional at the end of the cooling-off period. This is known as an in-house exchange of contracts in our office.
The 0.25% deposit paid by the purchaser at signing of the contract is a small price to pay for peace of mind, the buyer being safe in the knowledge that they are protected from the rest of the competition and won’t go through the heartache of missing out on their dream because they have been ‘gazumped'. The vendor is protected, in the event the purchaser for some reason pulls out of the purchase before the end of the cool-off, with the receipt of the 0.25% deposit being compensation for ‘marketing time lost’ during the cool-off.
The biggest benefit for the vendor though, is this method avoids going under contract with an unqualified purchaser and wasting valuable time on market, which can be common with the slow method of exchange. Once a purchaser is asked to put down the non-refundable 0.25% this tends to sort out purchasers who are ready, and those who require more time to get themselves in a position to buy. The vendor also has a clear timeframe clock ticking (the cooling off period) and, upon completion, they will know whether the contracts will then proceed unconditionally or not.
This “in house office exchange” method of sale is now almost the norm in our office, and local conveyancers are largely very supportive of these office exchanges. And, importantly, because of a disappointment level of zero, this means our professional relationship with both the vendor and purchaser remains very strong.