“I see its under contract….what do I have to do to come over the top and get it?”
“I see its under contract….what do I have to do to come over the top and get it?” After better than a year since the concept last meaningfully came up, I have now had the situation twice in a week (on two different properties) of buyers coming late to the party and wanting to beat an existing contract. The question is – can they do it?
While in other states (looking at you in particular, NSW) the practice of “gazzumping” or outbidding an already agreed to contract is common, here in QLD once the last signature hits the contract, that’s it (as long as everyone does what they are supposed to). A seller, having entered into a contract with a buyer cannot terminate that contract unless the buyer defaults, or the conditions specifically provide an opportunity to do so.
This isn’t to say that another offer can’t be entertained or a contract entered into, but it does mean you need to be very careful about the terms under which you do so. I can tell you that there are few things more worrisome in property law than a seller with a single property, finding themselves bound to sell that one property to two different people under two different contracts (without an easy exit). That’s a potentially expensive situation to be in – buyers don’t tend to take kindly to having the rug pulled out from under them and with the seller in default for at least one of those buyers, the legal fees and penalties can mount.
So what CAN you do, with a contract already in play but a new buyer ready and raring with a higher offer? Well first of all – be upfront about the current status. Pretending that you aren’t already bound is more likely to end in disappointment for everyone than just setting out the lay of the land. That established, a new buyer can absolutely make an offer, which the seller can either put in the drawer just in case, or accept, subject to an appropriate clause that only puts the new contract afoot if the other contract is rightfully terminated. In a changing market, a lot can happen in the weeks between first signing and handing over the keys at the end. You can be as clever as you like along the way, but honesty will generally do more for you than otherwise and a good chat to your conveyancer can be worth its weight in gold.