Property Insider
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Gazumping: knowledge is power. When the property market is at full boil gazumping becomes more common. It is important to understand how you can minimise the risk of this happening to you. Gazumping occurs when an agent or seller accepts an offer you make to buy a property at an agreed price but the property is sold to someone else. This usually happens when the vendor sells the property for a higher amount. While it may not seem fair, is important to understand the agent is obliged to pass on offers until the exchange . In NSW, a property sale is binding on the seller and buyer when contracts are exchanged between the two parties. Exchange occurs when the seller signs their copy of the sale contract; the buyer signs their copy, and the two parties exchange their signed contracts. It is usual at this time for the buyer to pay a deposit, usually 10% of the purchase price. If you are gazumped, neither
The agent is legally obliged to pass on to the vendor any further offers received for the property up until the exchange of contracts. the agent nor the seller are obliged to compensate you for any money you may have spent on legal advice, inspection reports, finance application costs or inquiries. Your expression of interest payment must be refunded to you in full.
is no delay before attempting to exchange contracts on a property. Q Obtain a copy of the sale contract as soon as possible and have it examined by either your licensed conveyancer or solicitor. Q Seek to exchange contracts with the vendor as soon as possible. Anyone purchasing residential property has a five-day cooling off period commencing from the time of exchange of the contracts. Only the purchaser can waive the
Protect yourself Some ways to protect yourself from being gazumped are: Q Always have your loan finance pre-arranged and ensure you can pay the 10 percent deposit so there
cooling off period and it can be extended by agreement. Q During the cooling off period, you can do a building and pest inspection and have the contract examined. However, if you rescind the contract during this period, you forfeit .25% of the purchase price to the vendor, as the property has been taken off the market for a period of time. Q Negotiate firmly with the vendor or real estate agent. Insist on the agent passing your bona-fide offers to the vendor. The law requires agents to inform the vendor of all offers up until exchange of contracts has taken place unless the vendor has instructed otherwise in writing (eg. the vendor instructs an agent not to advise of offers under a certain price). Q You may wish to ask for evidence in writing that your offer has been passed on, but this is not required of an agent by law.
Q If you are advised that other offers have been made, ask to have this in writing. While an agent is not obligated to provide this information in writing most agents will do it. Q If you are certain that you want the particular property, be ready to possibly increase your purchase offer to the vendor. Q Be aware that the vendor is not generally compelled to sell to any specific person and can change their mind at any time prior to the exchange of contracts. Vendors may not necessarily sell to the person that makes the highest offer, but may accept a lower offer from a prospective purchaser.
Gazumping cannot occur in the auction process.
byronshirerealestate.com.au
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Inspect Saturday 23rd Nov. 12-1pm Auction Saturday 23rd November 1pm on site Todd Buckland 0408 966 421
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1 Left Bank Road, Mullumbimby Set on a rolling green acre with perm creek frontage, this property offers a wealth of features. Established gardens, four car garage, and a big family home. Constructed of double brick, the solid house will accommodate a growing family or multigenerational guests.
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Inspect By appointment Price $1,195,000 Todd Buckland 0408 966 421
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Just 100m from the Brunswick River, this high set cottage is in a great location with loads of potential. The block’s big enough for a granny flat and ideally has rear lane access. High ceilings, timber floors and loads of space for guests. Guide price $1.2m - $1.3m.
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10 Banool Circuit, Ocean Shores Situated in an elevated location in North Ocean Shores this 1996 built two storey home enjoys stunning ocean views to the east and views up to Hastings Point to the north. This is a great size double storey 4-bedroom family home and offers privacy - bordering nature reserve.
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Inspect Saturday 23rd Nov 2-2.30pm Price $775,000 to $810,000 Gary Brazenor 0423 777 237
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