Some friendly advice about holding off on popping the cork on that bubbly too soon..

So you’ve found a home you want to buy? Great! Now it’s just a matter of packing up those boxes, roping some friends into helping you move, planning a housewarming party… Well, not quite yet.

Today I’m talking to you about a tricky little practice causing all kinds of confusion and frustration throughout the real estate industry – The Handshake.

Countless times in my career I’ve seen buyers and sellers shake hands and consider the deal done, only to be shocked when things fall apart.

Maybe another buyer swoops in and seemingly steals your new home out from under you. Or maybe that nice couple who really looked like they loved your house mysteriously change their minds and pull out. Whatever the reason, buying and selling a home is an exciting, emotional, stressful experience already. As an agent, it genuinely pains me to see people think they’re at the end of this journey only to find themselves right back at the beginning. I hate to say it, but there’s nothing legally binding about that handshake.

So at what point does a property become yours?

You’ve found your dream home. Your offer has been accepted and you’ve secured your finances. It might feel like you’re in the clear and it’s time to celebrate, but at this point there’s still no legal obligation in place from either party. This only happens once you’ve exchanged contracts. I love what I do and I try to make the process of buying and selling homes as pain-free and transparent as possible, so I really want to say that again – just to be super clear!

Until contracts have been exchanged, that home is neither bought nor sold.

Here’s a quick breakdown of this crucial part of the conveyancing process to help you:

  • Both the purchaser and vendor (buyer and seller) agree on the price and conditions of sale of the property. This is all written up in a contract and you each sign a copy. The contracts need to be identical for exchange to legally occur.
  • Purchasers will then pay a 10% deposit on the agreed purchase price of the property. As your real estate agent, I’ll hold onto this for you until settlement.
  • Your respective contracts are then exchanged and dated.
  • You can both breathe a little easier, as this is the point in a sale where vendors are legally bound to sell and buyers are legally bound to purchase. In other words, now you can celebrate!

Well, that’s it from me for today. This is of course just one small step in the process of buying and selling a home, so if you have any questions or need any advice please don’t hesitate to get in touch.

Cheers,

Kim