Why might your property sale be delayed?

Congratulations! You have a signed contract for the sale of your property.

Now the clock begins ticking down to several important milestones in the settlement process until that long-awaited moment when your property officially changes hands.

But what happens if there are delays? And what’s the likelihood these might occur?

Contractual obligations

After the contract of sale is signed, a series of milestones occur.

There’s the cooling off period, where either party can decide against purchasing or selling the property for any number of reasons.

Then there are other key dates where the seller needs to meet specific conditions, depending on what clauses are included in the contract.

These might include pest and building inspections, a bank valuation, due diligence, finance approval, and actual settlement where the bank releases the required funds and the property officially changes hands.

Any of these milestones have the potential to cause delays, in which case the buyer’s conveyancer and your conveyancer will liaise to work out alternate deadlines and keep you informed of the progress.

So, what might prompt a delay?

Finance delays

One of the most common reasons for a delay in settlement involves finance, with the buyer’s lender required to undertake a host of work behind the scenes.

The lender needs to value the property, assess the purchaser’s financial position and ability to service the loan, and then organise the mortgage.

If additional properties are involved in this calculation, things can be complicated further, which is why it’s preferable a buyer seeks pre-approval prior to making an offer on a property.

Due diligence

In any property transaction there will be a certain amount of due diligence undertaken, including title checks for the property, searches for any council restrictions and conditions, covenants and more.

These too can cause delays, particularly if a local council is struggling with an influx of checks and inquiries.

Pest or building inspections

Many sales contracts are ‘subject to pest and building’, which sees qualified pest and building assessors check the property for existing or potential issues.

In a busy property market, like the one encountered in 2020-21, there may be delays in obtaining the required inspections simply due to demand.

Public holidays

Most contracts are calculated by working days, rather than calendar days, but still, public holidays can impede the settlement process and slow things down.

If there are numerous holidays, such as major holidays like Christmas and Easter, between the signing of the contract and settlement, this too can delay settlement date.

How to handle delays

Despite everyone’s best intentions there can be delays in the property transaction process. Some can be foreseen while others might be unexpected.

Regardless, it pays to stay in touch with your conveyancer and agent who will keep you updated on what’s going on and let you know of anything you need to do to assist with a swift and stress-free transaction.

Looking to buy or sell?

If you’re considering buying or selling a property, why not chat with one of our friendly agents on 1300 438 439 to understand the state of play in your local market?

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