An expression of interest is the first step in the buying process for real estate. As buyers advocates, this initial stage is where you place an official holding reservation on a property.
The expression of interest sets out the proposed details including the terms & conditions of the offer, purchase price and time frames to act. It is a non-binding offer and does not in itself constitute a legally binding contract. However, it normally requires a holding deposit to be exchanged. This can vary from $500 – $5,000 depending on the property in question. The more valuable and luxurious the property, the more likely the deposit is the later amount.
The expression of interest is ultimately an offer made in good faith to establish a negotiation process with the aim of executing a legally binding contract. The reservation period may vary, but generally it provides the buyer with approx. 3 – 5 working days to make their final decision to proceed. In this period, the buyer can obtain legal advice around the contract of sale & vendor statement, confirm their borrowing capacity and ensure they can afford the property.
The vendor is not obliged to accept any particular offer made within the expression of interest, however this also applies to the purchaser. They are not legally obliged to proceed, and any holding paid is fully refundable.
As buyers advocates, we have seen some buyers by-pass the reservation process and aim to go straight to contract. Without clearly reserving the property, many buyers can miss out on buying if another takes this action. We believe reserving the property provides you with more time to action without the uncertainty it is still available.
If you’d like to learn more about an expression of interest and need assistance in your buying process, please don’t hesitate to contact us.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Sep 2018
