I mentioned that I had signed a provsional agreement for the purchase of a small residential property. Until the formal sale and purchase agreement is signed by all parties, either party can back out by paying liquidated damages equal to the amount of the preliminary deposit I paid (about 5% of the purchase price) plus agency fees and costs for both parties.
The price I have agreed to pay was, in comparison to a recent sale of a comparable unit in the building, a discount to market price. The size of the discount looks bigger than it is because the comparable unit has been redecorated to a very high standard whereas my unit needs to be completely gutted. I was told last night that the original purchaser of the comparable unit has been gazumped to a new buyer who paid about 6% more. As things stand it would pay the vendors of my unit to gazump me.
The vendors' right to cancel the contract and pay liquidated damages will end once the formal sale and purchase agreement is signed by all parties. I will sign tomorrow. The vendors are required to sign by 24th August. Until they do, I will be sweating on this one.