Thank you for the opportunity to assist with your pre-purchase contract report.
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1 Our Ref: MJH: July 2015 By Dear Customer, Your proposed purchase from (the Property ) 1. Instructions Thank you for the opportunity to assist with your pre-purchase contract report. We attach a copy of the contract that we have been provided with for the purposes of review. Please advise us immediately if you have been provided with a different version. Where we refer in this letter to the Contract, we are referring to the attached version (including any amendments we have negotiated and are referred to below). We confirm our engagement for the purpose of (at this stage) reviewing and advising on the Contract. It is beyond the scope of this letter to provide an advice on the whole conveyance. We do however provide a brief summary of the conveyancing process in Schedule 2, including the work covered by the balance of our retainer should we be instructed to act for you following the exchange of contracts. Preliminary matters Before proceeding further, please ensure that the Purchaser named on the front page of the Contract is correct. This legal name description must accord precisely with your driver's licence (or other identification you have provided to your bank) because your financier will draft the mortgage based on this ID, and the mortgage must match the Contract and Transfer. We cannot change the purchaser's description after the Contract is entered into, nor can we change the purchaser to another person. The table below records the amendments to the Contract that we have already negotiated on your behalf. Prior to the auction you should inform the agent that you are a client of this firm and that the changes referred to in the first row of the table below have been agreed by the vendor.
2 Event/Item Outcome Amendments Note: Please ensure the inclusions are accurate and properly functioning by your own inspection prior to exchange The following amendments to the Contract are now deemed to take effect if you are the successful purchaser (even despite no physical amendment to the Contract having been made): a. b. c. d. e. f. reduce the default interest rate in clause 32 from 12% to 8%, which is more in keeping with current commercial default interest rates; increase the time for service of the draft Transfer in clause 35 by the purchaser from 7 days to 21 days after the contract date; remove the land tax acceptance provision in clause 38 and require the vendor to provide a clearance certificate on settlement Important Note The contractual amendments referred to above are in your best interests and commercially realistic based on our experience as property lawyers acting for purchasers in the past. If for some reason you do not require/press/desire any of the aforementioned amendments, please let us know immediately. Likewise, if there are further amendments to the Contract that you require us to request, please let us know at least 48 hours prior to the scheduled auction date or proposed exchange of contracts. Deposit Completion Period You must pay a deposit on exchange of the Contract equivalent to 10% of the purchase price that you agree to pay either at auction or via the agent. The payment should be made by cheque (it does not need to be a bank cheque but must of course be honoured on presentation by the agent). We might be able to negotiate a lesser deposit if you instruct us to do so. The completion period for this Contract is 42 days. If you cannot complete the Contract on time, certain cost penalties and interest will apply, and you risk termination of the Contract by the vendor if you are more than 2 weeks late in completing. We might be able to negotiate a different completion period if you instruct us to do so.
3 Pre-auction If you wish to make an offer to purchase the property prior to the auction date then you must do this directly with the selling agent. Make it clear that your offer is subject to contract. If your price is agreed, please immediately contact us to take further action to secure the purchase prior to the auction. The offer and acceptance is not binding on either vendor or purchaser until formal legal contracts have been exchanged and the deposit is paid. The property officially remains on the market until that occurs. Auction Exchange of Contracts You must ensure that prior to the auction you have negotiated any further amendments to the Contract (other than those referred to above) that you wish to take effect in the event you secure the purchase. We cannot negotiate amendments to the Contract after you have entered into it. Also, you must ensure that you have followed the other pre-auction steps referred to in this letter, and registered for the auction and read and understood the conditions of bidding at auction (these will be available via the agent or the auctioneer at the auction). Remember, you will need identification (e.g. driver's licence) to register as a bidder at auction, and bring along your cheque book. If you are successful at auction then the Contracts will be signed and formally exchanged. At this juncture you must pay the deposit via personal or bank cheque to the agent, and these two simultaneous (and interdependent) acts render the purchase arrangement legally binding. You cannot change your mind or back out (called rescinding ) after this occurs, unless there is some material default or illegal act committed by the vendor entitling you to do so. The Conveyance Having secured the property, if you wish to engage this firm to complete the conveyancing process for you, then please and one of our property team will get in touch with you. The terms of our retainer and a brief summary of the process are set out in this letter, in particular in Schedule 2 below. 2.3 Should there be any further changes required for your particular requirements (e.g. 5% deposit, use of a deposit bond, delayed settlement, etc) or if you have any specific queries arising from the contract or this letter, please setting out those requirements and we will happily accommodate. Please note that specific amendments will incur a further flat fee of $110 (including GST).
4 3. Qualifications Assumptions 4.1 We are proceeding on the basis that the following assumptions are accurate (the Assumptions ): a Contract amendments Assumptions 6.1 We now set out our general advice on some of the more salient legal matters arising from the Contract. This is not a summary of the Contract nor the entire conveyancing process but simply a highlighting of some of the more important matters to consider before entering into the Contract: a. 7. Work to complete the purchase Set out in Schedule 2 is a short description of the work required after the Contract has been successfully entered into and the deposit paid to the agent. Assuming you have paid our fees via BYB for the Contract review phase, then the remaining professional fee component for your conveyance (if you elect to continue to instruct this firm) will be plus disbursements. Disbursements generally total no more than, and cover items that we pay to third parties on your behalf such as settlement, stamp duty clerks, and searching agents (we use a company called Infotrack Pty Ltd for enquiries required to be made of Council, Water Board, RTA, State Rail, Office of State Revenue, etc). It is impossible to forecast the precise value of disbursements until they are actually ordered, and this happens after the Contract is entered into.
5 In the unlikely event that we consider that some event or circumstance has arisen rendering the assumptions underlying the foregoing cost estimates mislaid, then we will immediately contact you to discuss alternative billing arrangements and a revised estimate. This would only occur, for example, if considerable additional correspondence or general legal work became necessary due to your default (or the vendor's default) or some other extraordinary matter arose (or if you request additional legal advice on related matters, for example taxation or family trust or family law matters). Please should you be the successful bidder for this Property and you would like to engage our firm to complete the conveyance on the terms recorded in this letter. Good luck with your bid, After auction Finance SCHEDULE 1 Enquiries
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