Signing Contracts Subject to Solicitor Approval
You want to buy the property, the vendor wants you to buy the property and the agent definitely wants you to buy the property but you have not had a chance to seek legal advice and remain unsure. Everyone refers you to the ‘cooling off’ period but even that comes with a list of exceptions that may apply and you will still lose 0.2% of the purchase price anyway.
One way to sign the contract and ensure that you have a way out is to sign the contract subject to your solicitor’s approval within a specified time. This time can then be extended by agreement in the event that more time is needed to obtain further information about the property.
Agents are usually happy for purchasers to sign contracts subject to such conditions as they feel they have secured a purchaser and the vendor will also be happy to sign where they are confident that there are no defects in the property for the solicitor to find.
Berrigan Doube Lawyers recently acted for a purchaser of a $1.48 million property. The purchaser was under pressure to sign the contract as the vendor had several other interested parties. While the purchaser did not want to lose the sale, they did not want to find themselves trapped in a $1.48 million contract that would be costly to get out of.
The purchaser signed subject to our approval by a specified date. The date was extended to allow us to obtain further information about the property. The information was obtained and the purchase proceeded. At all times the purchaser retained an entitlement to get out of the contract on our advice.
If a vendor is unwilling to accept such a condition, the specified time may be shortened. If the vendor remains unwilling, this may be an indication that the vendor is not confident that the property will meet with a solicitor’s approval. This in itself is reason enough not to sign the contract without obtaining legal advice.