What you should know when purchasing a investment property
When purchasing a investment property, it is crucial that buyers are aware of the potential pitfalls when it comes to real estate sales contracts. These contracts are legally binding documents – once accepted and signed by both parties (purchaser and seller) you are obligated to uphold its terms and conditions.
Contracts for the sale of property do vary from state to state so advice is recommended before you place offers to ensure that you are adequately protected and not in breach of any legal requirements.
At Momentum Wealth, we always add our own clauses to contracts to protect clients from concealed or unforseen circumstances.
Researching properties for purchase can be a time-consuming process, especially when looking at multiple properties. There may also be some issues that weren’t attended to before placing an offer on the property. This is why we always use a sufficient “get-out” clause to protect clients in these instances.
I am still surprised at the number of people who believe the use of a finance clause will protect them should they change their mind about purchasing the property or find some problem with the property that they were not aware of. Typically finance clauses state that the purchase of the property is subject to you the purchaser obtaining finance within a particular time period.
Anyone using this clause on its own is taking quite a risk. If you discover something that may affect your purchase decision, (for example a development next door, or structural problems with the house) then you may find yourself in breach of the contract if you walk away from the sale.
We always ensure that we use other clauses or sufficient “get-out” clauses to cover our clients. This provides them with an option to walk-away if something arises that we were unaware of when making the offer on the property