John McGregor
For anyone that listened or hasn't listened along, that we kind of just cover off on a glossary of terms to help me out with.

Aaron Horne
How did that go.

John McGregor
With you made across the road?

John McGregor
You want to hear a secret? I've been avoiding him. I've just.

Aaron Horne
I've actually stopped by.

John McGregor
I've had just enough opportunities just to be like, Oh, I got to run it with the kids. Or just like a tutor is a lovely bloke. I do really enjoy chatting with him. I just. I know he's at the park. This is where I know he's at the moment where the price reduction conversation's coming. Oh, that's. I don't.

John McGregor
I don't want him coming over and asking me like, do you reckon it's a good idea for and I don't.

Aaron Horne
Go he wasn't.

Patrick Berrry
Going to. I know you're listening to the property.

John McGregor
All right, guys, welcome back to the property by your weekly engagement in the real estate here in the Hobart marketplace, I'm your host, Aaron Horn, and I'm joined by superstars of real estate here in Hobart, Patrick Berry and John MacGregor. Welcome back to the property Bad Boys.

Aaron Horne
Always glad to be here.

John McGregor
Always good to have you back. And we are riding high on the success of I hate to say this, I hate to say this out loud, a 20 year school reunion. How have we been out of school for 20 years?

Patrick Berry
That was surreal. Yeah, that is surreal, I would say.

John McGregor
How is that happened? Like literally someone at the start of you said it's coming up. I said, I can't be that close. 20 years on the weekend, I drive up to our old stomping ground. I'm going to college in England. Walking here, I pull up into the car park and I see John's car and Pets.com.

Aaron Horne
You I was about to say, you know.

John McGregor
What was their 60, 70 kids at school and what ten turned up of.

Aaron Horne
Which three of them were us. So I went to see each other every day. Yeah.

John McGregor
And I live around the corner from one of the other ones. They are see him when I'm walking my dogs.

Aaron Horne
I really see others at the coffee shop.

John McGregor
Yeah, it was, it was, it was fun. It was good. It was awesome to see the facilities at the school thinking that my boys might be going there one day and just been like, holy crap. Like, we could have had a podcast when we were 15 had we had these facilities, music.

Patrick Berry
Studio that was that amazing what they've done with that place, which I was really happy to see actually, that your old high school and primary schools just actually come a long way rather than, you know, because it'd be so many, I'd imagine, with other people across the time that would just have just gone backwards. But Dominic's just flowing.

Aaron Horne
I'm pretty sure my.

John McGregor
School fees alone have paid for that musically.

Aaron Horne
And my kids have only been there for three years.

John McGregor
Shout out to Mark and the other teams at the Tony the the Dominic art scholars for yeah showing us around and for I think it was Jocelyn and to make it did a lot of the heavy lifting on actually getting it off the ground so yeah it was really fun to I was I felt really bad on the tour but touring around and showing us all these places and say, Oh wow, this is now the woodwork area and everyone, everyone's just in their own little pockets reminiscing on like, oh, do remember when such and such was making out with that person?

John McGregor
Do you remember when I got the atomic wedgie over this way? No one was listening to what he had to say about.

Aaron Horne
That, because I don't.

John McGregor
Care what it is now, mate. We care about what was.

Aaron Horne

John McGregor
Is banking on you guys bringing your kids.

Aaron Horne
There. So he's like, look how good this place is. So talking about your wages.

Patrick Berry
And one thing I did like, though, is I think all of us, it was mine. All of us actually enjoy each other's company. And Tony, he just said, Gee, you guys are chatty bunch, which is kind of a nice change from the last ten years. He goes, Cheese, you guys can drink a lot, you know?

John McGregor
Right. Well, let's set out to the one person who did drink a little bit too much at the end of the night. At the moment, I tell you know who you are. You're probably in Marble Bar at the moment listening to this. Deep down in the mines, we won't mention what you are vroom, vroom to you massacre.

Aaron Horne
Up.

John McGregor
Heaps of fun. It was it was a blast getting together with everyone from the old stomping ground. So, yeah, shout out to that. I'm jumping into real estate stuff I actually really enjoyed last week. For anyone that listened or hasn't listened along that we kind of just covered off on a glossary of terms to help me out with.

Aaron Horne
How did that.

John McGregor
Go with you may across the road.

John McGregor
You want to hear a secret? I've been avoiding him. I'll just.

Aaron Horne
I'll only stop by.

John McGregor
I've had just enough opportunities just to be like, Oh, I got to run it with the kids. Or just like a tutor is a lovely bloke. I do really enjoy chatting with him. I just, I know he's at the art. This is where I know he's at the moment where the price reduction conversation's coming. Oh, that's. I don't, I don't want him coming over and asking me like, do you reckon it's a good idea if I don't do this?

John McGregor
So after last week's chat, I'm like, It's been on the market a little while. I know that this is going to be the next step. I've heard enough in the offices. I know what's coming or just I've just been avoiding. I'm just on the avoidance train. I'm not legalistic agent. If I get a commission off, advise him on.

Aaron Horne
Maybe.

Patrick Berry
Negotiate that in my.

John McGregor
Yeah. So anyway I've been avoiding him like in the plank, but I do want to know some more terms. Yeah. You got something fat?

Aaron Horne
No. Sorry, I'm ready to go. You gave me the thing and I just scratched my face.

Patrick Berry
I want to take it a bit and then I'll say that.

Aaron Horne
You desperate on the auction that oh, that's not over there for 1.1 million. So she knows it's going to be like if you're very silly, I.

John McGregor
Think I miss this. But yeah. So before the reunion, you were you're doing your best auctioneering.

Patrick Berry
Yeah, I didn't see anybody. We did end up with a like a bid did a million bucks and that to pass it in. But it took me about 12 minutes of just just constant just back on the lawn going at going going eventually until the bloke finally just put his hands up to beat at last because the idea.

Aaron Horne
He was like, oh, let's just make this end. Well the think the.

Patrick Berry
Best part about it we looked in the end we weren't because he knew the Reserve was too far. Yeah. And if we get, if I do an auction, people still come out to watch. He can still make it a bit of fun, you know, just, just go through different terms and try to point men individually. I think I tried to call for the there was a Labrador.

Patrick Berry
I said I could have sworn that put its paw up. And then one of my a couple of my friends are there and they just they were just they live around the corner. They just just generally want to see what it was that you said. Our John started rambled bits. I felt like just putting my mum head on and just sort of I just coega Joanie now.

Aaron Horne
Wrap it up. Come on, take a little take love.

John McGregor
So the guy was put out of his misery basically wasn't really a case of.

Aaron Horne
Let's put this rabid dog. Yeah, but at least.

Patrick Berry
Diana could kiss the prize, you know? But two's too far. At least they could get. Well, he just like he had a crack at it. Yeah, you know, rather than going out again. Yep, yep, yep. Now, back in. I think you.

Aaron Horne
Got to put on a show.

John McGregor
For the video anyway. John. So well done. Take congratulation.

Patrick Berry
That's it.

Aaron Horne
But the thing was, he wasn't interested to.

Patrick Berry
Do so for at the back. He was never participating.

Aaron Horne
In what she said. She had no idea. Let's go. But it was it was.

Patrick Berry
They're always good fun. They're always good fun to do. And it just it just ended up on a, you know, passing it on vendors. Yeah.

John McGregor
So still on the market and still available out there if you are looking for a home in anybody.

Patrick Berry
But if you ever want to come to one of auctions knowing that no one's going to bid, I will make a fool of myself for at least 15 minutes, so.

Aaron Horne
Make sure is put aside a little bit of time. Yeah, it's such a morning.

John McGregor
All right. Well, let's jump into some of this buyer talks. I like people out there like well, like there's some terms there that you were saying. So you passed it in. Hit me with what passed that in mind because I'm just kind of like I think I know I've seen the block. But again, yeah.

Patrick Berry
It's just the term that it didn't sell under the hammer. So where the good one of it's event or bid so we have the as the auctioneer you have the right to bid on the vendor's behalf. And so what happened in that particular case, that guy put in a bid for a million even a candidate with a vendor bid a million, 28 million, 25,000.

Patrick Berry
And because there was no other no other people.

Aaron Horne
To run this vendor.

John McGregor
In this window bidding, it always makes me interested, because last time I checked, the vendor is trying to.

Aaron Horne
Sell the house and get rid of it, not buy back. Yeah. Know I'll put a beat on my own property.

Patrick Berry
It is, it is an odd thing but it's the it's I'll be really interested to hear about the evolution of the bid being right like it's only trying to continue on that sequence of bidding to do right. And I guess you could think of it almost like a counteroffer. So I could counteroffer. Counteroffer like you would have no problem in.

John McGregor
Private trading.

Patrick Berry
Yeah, but what happened? That case is if a reserve price is the price that under the hammer look like with the auctioneer at the front once the what's that? What's a bidding. Once the bids hit that price. Yep. You it's now on the market to sell so you know if it was if the owner had a reserve price of a million and the guy offered a million I'll you know I could have in theory called we are now on the market, which means whoever's the last bidder will secure that property and.

John McGregor
That's when you want to scratch your.

Patrick Berry
Face. That's a.

Aaron Horne
The house we bought a house or.

Patrick Berry
A Labrador to. Right for they sit in the pit, pass it in is in this situation where doesn't so the last bid on in that case was a vendor bid so which and then we didn't sell took there it goes reverts back to a private treaty situation.

John McGregor
Okay shop so.

Patrick Berry
So and then a private treaty situation is the auction the auction the auction finished and that's going to transition to an advertised.

John McGregor
Price more like a traditional thing you'd say on real estate or.

Patrick Berry
That's it. Yep, yep.

John McGregor
All right, so we've covered off on passing it in private treaty auction. The one thing I want to kind of work as like when you're at the auction is going to run with the auction thing. Here is when I'm making the bid, does that make it an official offer or a contract like so let's talk office contracts and kind of where these bids fall into place.

John McGregor
Like by raising my hand or touching my nose, I've just said, is that illegally binding offer slash, contract slash bid? What does it become?

Patrick Berry
So as part of the rules is that you're actually if if the auction is accepted, your bid, you're not allowed to withdraw it without my consent. The other problem is that I can't control you just Bolton down the street and disappear.

Aaron Horne
See you later. So the.

Patrick Berry
Reality of it is if someone throws their hands up with.

Aaron Horne
These and runs away as well.

Patrick Berry
You're kind of stuck. Yeah, but in theory, if the auction process, if you put your bid up, your hold of the bid and you just disappear with it when it just said, don't let.

Aaron Horne
Go, you just walk back into the ground like.

John McGregor
Backwards or disappear into the hedge like Homer.

Aaron Horne
Reference. So these are.

Patrick Berry
Difficult things to navigate. But yeah, I mean, in theory, you know, you want to know if the bids been accepted, you're not allowed to withdraw it without my consent.

John McGregor
So in theory, yep, I'm doing this by raising my hand for the audio people or I'm scratching my knees like that.

Patrick Berry
Oh, maybe.

John McGregor
Yeah. Well, the bid that is legally binding. Like, if I was, you could take me to court to say or what would be the repercussions of the Rana that.

Patrick Berry
What we would more likely do is you'd probably just say to the vendor, look, they're doing a runner. We have to find another buyer because to try and actually force you to commit before you've signed the contract, before you've put the deposit down, would just be it just to work, you know, so that there are the situations like.

John McGregor
Lucky that doesn't happen very often.

Patrick Berry
No. Oh, no. I'm pretty.

John McGregor
Confident people that bid at auction today because they want to buy the house and not because they.

Aaron Horne
Want to rush it straight and.

Patrick Berry
Just see what happens.

John McGregor
Yeah, I know. There's the pranksters out there everywhere. So you then turned on to sign the contract that became like the next step where you said like, Oh, we've had to tell the vendor that they haven't signed the contract. So bids happened, then signing the contract or putting in an offer and I'd like to like work out what these terms mean.

Patrick Berry
There's two scenarios. Even if the the property doesn't sell under the hammer, as we say, the last person who placed the bid has the first right to negotiation. So what we do is we approach that bidder and say, hey, thank you for your interest. You know, come inside. Let's see if we can negotiate a deal between you and the vendor.

Patrick Berry
So there's actually an incentive to actually still be the last bidder, even if it doesn't sell. You know, that even if it doesn't hit reserve because now you've got a one on one situation. Yeah. Whereas if then, if it goes and that's your only chance to do it one on one because then of course if we advertise it to the rest of the market Boomi back in competition so in that bidders mine he thought well stuff it I'm going to throw the bid out there and then see see what I can negotiate it behind the scenes just in case because at this point they don't know what they won't know what the reserve is until

Patrick Berry
he walks inside and we can, you know, illustrate that to him. Yeah. And see if we can close the deal then in the and if not, of course we go back, we catch up with the window and go to the market as normal. Yeah.

John McGregor
All right, so let's remove the auction side of things. And I just want to talk offers and contracts and what they mean. What that means. Yeah. So if I put an offer in on a property, so I'm, I'm all made across the road, he comes at me and he's just like, I've had enough of this. I just want to sell it.

John McGregor
And I put an offer in.

Aaron Horne
Yeah.

John McGregor
What does that mean?

John McGregor
So an offer basically means it's all on your terms as the buyer. Okay, so you're dictating the price, the conditions, settlement, everything to do with it now is all on your terms. Now, if the vendor you made across the road now accepts that, it then becomes a contract. Yes, that's the same document. We don't use different documents here in Tasmania.

John McGregor
Other states, I believe they might have an offer form. This is a.

Patrick Berry
Contract. It was just an offer to commit. Yeah, well, we could do the same, if you like, with our online form of credit.

John McGregor
But effectively, yeah, it becomes a contract once the other party accepts it. Yeah. So that's the main difference between offer and contract is that it depends. It's all on their terms or it's your and you agree to their terms.

Patrick Berry
Sure. And the offer could be anything like you thrown at look night. I'll give given 600. I'll give them 600 like. Well, that's the theory, you know.

John McGregor
Like 600 sheep, 600 cats. Like they've got to like. Yeah, yeah. So it could define anything as long as the offer is a defined expression of interest.

Patrick Berry
Where the difference is in Tasmania as a practice is we've evolved that most offers are drawn up on the actual, you know, contract itself. And there's two reasons for that. One enables the because there's so many little small nuances through the contract that can change and you want to understand what every single one of those are. So both the vendor and the purchaser know exactly what's being negotiated.

Patrick Berry
Yep. And once you've got that signature, obviously it does extend to another level of commitment, but you can absolutely do that through verbal or email. That's just a common practice that Tasmanian Tasmanians have adopted.

John McGregor
And then I guess the next one is conditional versus unconditional. Yep. Then what applies to Nick? So once you've got an offer that's been turned into a contract, it can fall into two brackets, a conditional contract or what we call an unconditional contract. Yep. And the main difference between them is a conditional means that, you know, it's a contract subject to certain things happening within a certain time frame job where an unconditional contract means it's pretty much officially sold.

John McGregor
Just waiting for a settlement date. Yeah.

Patrick Berry
And that the specific word they use if people pick up it is called a condition precedent. And all that means is that this condition precedes the contract moving forward.

John McGregor
Okay, sure. Yeah, that's how that makes sense.

Patrick Berry
So then once it's unconditional, there are no conditions left.

John McGregor
So an example of a condition could be finance, building, new fence being installed in the back yard. Like, yeah, give me anything. Yeah. But the main two that you would probably come up against would be a finance or a building or a subject to another house selling the you three. That would be the main difference.

John McGregor
Okay, so there are three core one. So you've got finance, whether the person is going to be able to obtain the finance provider to fulfill the contract. What was the second one?

John McGregor
Maybe they've got a house that they need to sell before they can purchase this property.

John McGregor
Okay, so this one I covered, this is subject to sale. Yep. Yep. So the condition of this contract being proceeded is that you need.

John McGregor
To sell 1 to 3 substrate within so many days. Yep. And then the third one would be a building inspection. So getting someone to attend the property on your behalf and check that it's.

John McGregor
So essentially you're making an offer provided that it meets a certain standard of a building quality. Quality?

John McGregor
Yep. Now that.

John McGregor
I'm not a real estate agent, I'm going to go I'm not going to avoid all my.

Aaron Horne
I'll just go across the site. But yeah, I've got.

John McGregor
All these.

Aaron Horne
Terms down that I'm going.

Patrick Berry
And the existing thing is that the way that the clause is written and Tasmania's building quality is based on the value of the defect limit and defect, in our definition is anything it could be. You know, there's a crack in the floor, there's a missing brick, there's the foundations bed. What we do in Tassie though is we set a defect limit or like a threshold you could say.

Patrick Berry
So would just use ten grand. And the idea being is if the building inspector goes through and finds a bunch of faults with the property that progressively each one costs a certain amount, and then should those combined, you know, cost more than ten grand to be able to fix the purchaser actually has a right to withdraw from the contract based on a failed defect clause.

John McGregor
Okay. Inspection. Yeah, awesome. Actually, you just hit on one final word. I think I wouldn't mind covering off. Is it like this withdrawing an idea of an offer, like being like the I don't understand contract law well enough to know like when can you do the bolter or disappear into the bush or yeah, like once you've made the offer and I guess I've worked out now that signing the contract is the point where it all becomes more official, like you and I put you John Hancock on, I think hit me with this withdrawing thing because like, you know, this one fell through or this this listing fell over.

John McGregor
This has got to do with some of these unconditional conditional stuff is that yeah.

John McGregor
It can actually start as early as the offer itself before it's even signed by the vendor. Yeah. I might sign an offer today for your house Aaron. Yeah. And then John's your agent. John's got a thing on and he doesn't get to you until tomorrow morning. For instance, in that time, I have a change of heart, and I decided I don't want to buy it anymore.

John McGregor
Yeah, I can actually ring up John and withdraw my offer, providing that you haven't signed it. So. And he hasn't told me that you've signed it. So up until the point that we get offer and acceptance, which is you accepting my offer. Yeah. I can withdraw it at any stage with no strings attached.

John McGregor
It's not official until it's.

John McGregor
Yeah.

Patrick Berry
And like Patrick said, you've got that, you've got.

John McGregor
It's.

Aaron Horne
It's not like the company that you sell used to colleagues. I wouldn't like that but.

Patrick Berry
Once you got the offer an acceptance is better before that's at, that's when it becomes contract. Yeah.

John McGregor
Yeah.

Patrick Berry
So withdrawal before contract.

John McGregor
That's when we move on to your second question, which was how do I withdraw from an offer or an offer falling over after it's been signed by all parties? Yeah, well, that comes down to your finance and your building and those things, all those conditions. You know, maybe I've got a clause in there that says I need to borrow half a million dollars within 21 days and it gets to day 21.

John McGregor
And the bank can't give me that guarantee that I can have that money. So then I've got a decision to make like I have a, I have to withdraw because the bank said I can't do it or I need to pivot and ask for more time potentially to keep trying or, you know, change tactics or walk away. There's different scenarios that happen.

Patrick Berry
Michel Well, and the other thing in the contract, it it describes the purchaser must use all reasonable endeavors to fulfill the terms of the contract and take the finance clause, for example, like we can't just go, yeah, didn't get the finance. No, no. You need a letter from your bank stating that you didn't get finance, so therefore it becomes a, you know, used all reasonable endeavors.

Patrick Berry
Yeah. Then the other part too is that if your timeframe ends on the 22nd day, that means your, your timeframes have ended in terms of, you know.

John McGregor
Based on that original document of a contract, as I've got 21 days or so.

Patrick Berry
It also means that that's what we're saying, is that unless you get an extension or the event or then on the 22nd day, what's the time have lapsed? Is it they can choose to withdraw, to cancel the contract.

John McGregor
Terminate or.

Patrick Berry
Withdraw what's happened? Yeah, the venue has the capacity. They'd still get a deposit back in other elements, but that's another way you can withdraw.

Aaron Horne
So yeah, we're.

John McGregor
Having a few of those at the moment where unfortunately things falling through. If things are falling over banks just being that little bit tighter and with these interest rates increasing at the moment, someone that got pre-approval three months ago, two interest rates have happened since then. Yeah, maybe all of a sudden they can't buy a house as expensive as what they thought they could.

John McGregor
Yep. So there are a few challenges at the moment in the market, but we're working through most of them with most buyers and I think 99% of buyers are pretty well-educated and know what they can and can't do, and that's because.

John McGregor
I listen to the.

Aaron Horne
Property. But that's right.

John McGregor
And I don't think there's any of them out there that are going out and mortgaging themselves so high to the limits that, you know, the smallest interest rate is going to force them not to be able to buy a house. So, yeah, it's not happening huge. But it is happening a little bit.

John McGregor
Yeah, not sure. I guess it was just yeah. Some of those terms again last week we spoke about them and it helped me understand even I was avoiding. I would, might help me understand a few things. Yeah, I just thought if we off a few of those before the end of the year that might be a handy way of Yeah.

John McGregor
Getting a story to the end of year and then resetting again for 2023. I think the plan is let's we're going to go one more round. We'll have a Christmas special. We like to do it normally. We have you brother on for Christmas. Is he coming down?

Patrick Berry
He won't be here at this time.

John McGregor
He does want to get covered again. He got covered last time.

Patrick Berry
It was just he stood up and he stood there. Mum and dad's like top room, like a creeper, like, you know, the hunchback and Notre Dame.

John McGregor
The worst part is I could see him. Or you just like peering.

Aaron Horne
Around the corner, like, yeah, this really awkward piece of Christmas.

Patrick Berry
For our families we had last year because aside from me, everyone look, okay, it's Coca-Cola mum and Lego covers, and no one was actually able to spend time together.

Aaron Horne
Yeah, yeah. John's at the dinner table, full sprays online.

John McGregor
It was full on home alone. Just setting up little traps for anyone that leaves their room. Don't leave your.

Aaron Horne
Own paid to the face.

John McGregor
And dropping him, whacking them on the head. So we won't expect. I think he's filming Taskmaster at the moment isn't he. I think I saw the other day that that is the new Channel ten show.

Patrick Berry
He's got these two clips.

John McGregor
Yeah. I'm actually really looking forward to that next year. So yeah, that's just in my Greg in years.

Aaron Horne
Alright, well we'll just.

John McGregor
Jump into our pool of other celebrities.

Aaron Horne
He thinks so. He got this.

John McGregor
All right. So Christmas bonanza next week. Don't know what we'll do just yet, but yeah, watch this space and we will see you all next week.

John McGregor
I see you guys are alright.

John McGregor
Bye. You have been listening to the property, both recorded and edited by 414 media house in conjunction with the Fall and Fall Property Code.

John McGregor
This podcast is general information only and the thoughts of views expressed is the opinion of our panel and listeners should always seek than use their own investigation into any topic we discuss to ensure they fully understand their own situation.

Aaron Horne
It does not constitute.

Patrick Berry
And should not be relied on as purchasing, selling, financial or investment advice or recommendations expressed or implied. And it should not be used as an invitation to take up any agent or investment services. No investment decision or activity should be undertaken on the basis of this information without first seeking qualified and professional advice.