Everything buyers need to look for in an agreement of sale
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An agreement of sale, also sometimes called an offer to purchase (OTP) is a legally binding document that is signed by both the buyer and the seller of a property. As a buyer, it's important that you understand all the implications of this document before you sign. This is one of the reasons why it's so important to work with a real estate professional that you can trust. Here's a breakdown of some of the things to know when signing an agreement of sale for a property.
First things first: what should an agreement of sale contain?
An agreement of sale should contain the personal details of both buyer and seller, details of the property in question and any relevant suspensive conditions. If a deposit is being paid, the amount should be specified, and it needs to be stated that the deposit will be held in a trust account until the sale is complete, with interest accruing to the buyer. It will also contain various details, such as:
- The exact price for which the property is being purchased.
- Details of how the purchase will be paid for and when payment will be made.
- A breakdown of the obligations of both buyer and seller.
- Details of the attorneys who will attend to the registration of the sale.
- A breakdown of the estate agent's commission.
Suspensive conditions
Before you sign an offer to purchase a property, you need to ensure that all necessary suspensive conditions have been included. A suspensive condition is any clause which states that something needs to happen for the deal to go ahead. For example, if you need to secure a home loan to pay for the property, then the contract needs to specify that your purchase is subject to being granted a home loan - even if you have already been preapproved. Similarly, if you need to find a buyer for your current home before you can buy your new home, this needs to be built into the contract.
Dates and deadlines
When you sign an agreement of sale, the offer comes with a deadline which you can determine. This encourages the seller to decide on whether they will accept your offer, reject it, or present a counter offer. Another date to keep in mind is the date that you'll be able to move into your new home. If you're selling a home, your buyer may ask that they pay you occupation rent in exchange for being able to move into their new home prior to transfer formalities being concluded. Approach this with caution, because if you're unable to move into your new home before the transfer process is finalised, you may find yourself temporarily "between houses" and need to find short-term accommodation.
List of fixtures
The offer to purchase should come with a list of fixtures that are included and excluded in the deal. If, for example, you were particularly partial to the window blinds in the living room, it is worth ensuring that they are specified in the agreement. If they are not specified, the seller is under no obligation to leave them behind.
The benefits of using an experienced #RealPartner
Unless you are a property investor, you are unlikely to be very familiar with the ins and outs of an agreement of sale document. By partnering with a well-known and widely respected estate agency when it's time to buy property, you can be sure that your best interests will be kept at the forefront of the transaction. Take the time to read through the document with a fine toothcomb and ask all the questions you want - it is your #RealPartner's job to answer them.
The Jawitz Properties team deals with the intricacies of agreement of sale documents every day. Contact us for assistance in finding the right property and tailoring a property transaction that meets your needs.
Author: Jawitz Properties
