So you have seen a property advertised for sale and you want to make an offer. The property is advertised with a price range. What offer should you make?
Some years ago now, the law was changed to prevent properties being advertised at less than the price which a seller will accept.
The evil it intended to stop was people inspecting houses and being disappointed when they learned that they could not buy the property because the seller wanted much more than the property was advertised for. This practice is known as underquoting.
So what is the law?
An agent is not allowed to advertise a property at less than the prescribed minimum advertising price.
This price is defined as: “the greater of the agent’s estimate of the selling price or the selling price sought by or acceptable to the vendor”. If a range is quoted then the lower limit of the range cannot be less than the prescribed minimum advertising price. The upper limit of range cannot be higher than 100% of the lower limit of the range.
In other words, unless the vendor has advised the agent that he or she is willing to sell the property for less than the agent believes it is worth, the lower end of the range cannot be higher than the price that the vendor has advised in writing to the agent that he or she is willing to sell the property for.
Whilst sometimes there will be genuine competition for the property, and you will need to make an offer which is better than any other potential purchaser in order to secure the property if the price is offered as a range, the bottom end of the range will normally be the price which the vendor has advised the agent he or she will accept.
As solicitor’s and conveyancer’s we often only receive notification that someone has purchased a property after they have signed the contract and all conditions have been fulfilled. Agent’s will generally tell a purchaser, that the contracts are standard and that you do not need to obtain legal advice.
We can provide advice to purchaser’s before they sign the contract and during the cooling off period. Sometime there may be a need to ensure that a special condition should be in the contract. Advice before signing can ensure that your rights are protected and there will be a smooth transition to settlement.
Call us to discuss your potential purchase, a little bit of money spent before signing can save you lots of heartache later.
Contact us on 8523 8400 (Gawler) or 8211 6500 (Adelaide) to arrange an appointment for an initial no obligation consultation with one of our lawyers. Alternatively, send an email to firstname.lastname@example.org and we will contact you.