A family of three who moved to Australia managed to put down a deposit of A$320,000 on their dream home but only to see their life savings forfeited due to contract terms that were unfavourable to them. From the article, the buyers did not have any real estate agents representing their interests and instead navigated through the property transaction on their own.
The real estate agent who handled the sale said the “subject to finance” clause was removed at the direction of the vendor. “We can’t suggest… we let every purchaser know what their rights and their obligations are. They are free to make their decision,” they said.
The omitted clause is a crucial clause for every buyer especially if you have not done your financial due diligence before commencing on your property search. In this case, the buyers had a shortfall of 5% in their home financing eligibility which led to the transaction being aborted and the deposit monies forfeited by the sellers as the buyers were not able to top up the shortfall before the contract due date.
In Singapore, the major real estate agencies have an in-house option to purchase contract to ensure fairness to both parties. However it is still noteworthy that savvy clients can also get their lawyers to draft up terms and conditions that are more favourable to them. It is also important to note that terms and conditions are subject to negotiation and agreement between both parties. There can be clauses which may be commonly overlooked such as the option to renew clause if the property is purchased with tenancy, transaction timeline among others.
Property agents are not allowed to dual represent and as such, buyers and sellers are advised to engage their trusted agents to assist and look after their interests.