If you make an offer on a property and then decide that you no longer want to purchase
it, can you withdraw that offer?
Hi I'm Ryan Mclean from positivecashflowaustralia.com.au where we teach people like yourself how to
find and invest in positive cash flow properties all over Australia.
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When we are looking at making offers on properties can we renege our offer and can we remove
it and what happens if we do that, let's look at different scenarios, firstly we want to
look at when you haven't put down any money at all you haven't signed any contract, secondly
we are going to look at when you've signed your contract and you are in the cooling off
period and thirdly we are going to look at when you've signed the contract, the cooling
off period has ended and you've already paid your deposit.
Then lastly fourthly we are going to look at what happens if we make offers at auction
and can you renege on that offer and so forth.
Number one is when you make an offer but you don't sign a contract and you don't put any
money down, well check with your particular state because every state varies differently
but in most situations you are going to be okay to remove that offer.
Often you are making an offer based on a price point and you wouldn't necessarily discuss
the terms, they are maybe some terms within that offer that you're not happy with or you
may decide that the property is not to the standard that you thought it would be up to.
Most situations is okay to remove your offer from the table and you can do that by letting
the real estate agent know.
If you get into a habit of doing this then obviously real estate agents are going to
expect it from you and may not take your offer seriously, do make our offer serious when
you are offering but don't be afraid to pull up if it doesn't end up suiting your needs
or been a great decision for you.
Number two is when you pay the small deposit usually is 0.25% of the purchase price and
you've signed the contract and you've now entered in the cooling off period.
Depending by what state you are in and was do vary check with your professional with
a solicitor or with the convincer about this.
Once you've entered into the cooling off period and signed the contract then you no have the
cooling off period to decide whether or not you want to purchase the property, this may
give you time to due diligence checks things like getting a building inspection done or
getting a pest inspection done and you can decide within that time period that you don't
want to go ahead and purchase the property but obviously it depends on your contract
to check with your solicitor, if that happens and you decide to pull out then in almost
all situations you are going to lose that 0.25% that you've paid as a deposit on that
property.
Number three is when you've signed your contract, you've finished your cooling off period and
you've paid your deposit, can you still withdraw your offer and can you not purchase the property
the answer is yes but obviously there's going to be repercussion for doing this depending
on how you structure your contract it may mean that you lose your deposit, may mean
that you lose a portion of your deposit or you may be able to get your deposit back.
If you structure the contract in such a way that they are clauses that you can get your
deposit back if you decide not to go ahead, then there's a good chance that you be able
to get your deposit back, however if you just go ahead with a standard contract and you
haven't specifically stated that you want your deposit back and you decide not to buy,
then in most situations if you decide to withdraw your offer after the cooling off period has
ended then you are going to lose the deposit that you've paid on that property.
Usually the deposit is five to 10 percent it's going to be a significant amount of money
you kind of want to remove your offers before the cooling off period and definitely before
the cooling off period ends because otherwise you could find yourself in a lot of strife
Number four is at auctions, when you at an auction generally you would have looked at
the contract and the terms and conditions before you start bidding, this maybe in the
days leading up to the auction or maybe on the day before the auction but when you are
bidding you are negotiating in the price only and not in the terms, it is expected that
if you make an offer at an auction that you will then complete that offer by purchasing
the property and paying your deposit on the day straight after the auction finishes.
Don't go ahead and make really million offers at auctions because you may find yourself
in a very awkward position where you need to purchase a property that you don't really
want to purchase.
Now I'm not a solicitor and I don't know exactly on these point but I'm guessing that you could
always have the option if you made an offer and you decided that you don't want the property
to run away because then they've to chase you and find you get you to sign the contract
and because you haven't signed anything I guess that you could get out of it but wouldn't
be something that I would suggest going ahead and doing, and I would speak to a solicitor
about that because I don't know what the laws are around at auctions about whether you can
renege your offer whether you can make it down the street and run away from an offer
that you've made, just be careful when making offers at auctions, don't offer to much don't
offer at all if you don't want to purchase the property and be very careful about that.
You can look at making an offer before the auction and maybe you can negotiate with the
buyer before the auction even happens to get the price that you want and the terms that
you want as well.
I hope that answers your questions to whether or not you can remove an offer that you've
placed on a property and also what happens if you make an offer and you do want to remove
it, I'm Ryan Mclean you can get more videos, articles and podcasts just like this one by
heading over to positivecashfloaaustaralia.com.au and once again thank you everyone who has
emailed me and showed their support for what we are doing here.
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