In the world of property transactions, one crucial document serves as the cornerstone of the entire process—the property sales agreement. While it may seem intimidating at first, understanding its significance is essential for both buyers and sellers.
In this blog post, we'll delve into the key aspects of property sales agreements, shedding light on what they entail and how they safeguard your interests throughout the transaction.
1. What is a Property Sales Agreement?
A property sales agreement is a legally binding contract signed by both the buyer and seller. This written agreement is typically divided into two sections—the Offer to Purchase and the Acceptance of Purchase. Together, they create a valid contractual arrangement that sets the stage for the property transaction.
Verbal agreements hold no weight in property sales - without a written and signed document containing all the necessary details, the property transfer cannot be registered with the Deeds Office.
2. Key Elements of a Property Sales Agreement
While every property sales agreement is unique, certain vital details must be present to ensure its validity. These include:
Additional optional details often covered in the agreement may encompass fixtures and fittings, details of conveyancers and estate agents, division of responsibility for costs, date of occupation, required certificates, a voetstoots clause (as-is clause), suspensive conditions, and breach procedures.
3. Seeking Professional Assistance
Given the complexity of property sales agreements and the potential pitfalls that may arise, it's strongly recommended to seek professional assistance. While some may consider drafting the agreement independently, this approach can lead to unintentional gaps or loopholes with severe repercussions later on.
To ensure a smooth and secure transaction, relying on the expertise of a real estate agent is the safest bet. In many cases, the seller's real estate agent will aid buyers in drafting the Offer to Purchase.
4. The Legal Binding Point
Buyers are often under the impression that once they sign an Offer to Purchase, they are immediately bound by the agreement. However, this isn't always the case. The Offer to Purchase may include a clause stating that it is irrevocable for a specific period.
Without such a clause, buyers retain the option to withdraw their offer until the seller accepts it. Once both parties sign the Acceptance of Purchase, the agreement becomes legally binding. Only a breach of contract or failure to meet suspensive conditions (e.g., securing finance) would nullify the agreement and halt the sale.
5. Negotiating with the Seller
In the event the seller rejects the buyer's offer, the existing agreement becomes invalid and cannot be reconsidered later. To negotiate, both parties need to draw up a new Offer to Purchase, reflecting any amendments to the purchase price.
Verbal negotiations can be useful, but it's crucial to understand that until written and signed by both parties, a verbal agreement is not legally binding.