Too many times, home buyers and sellers tend to take a relaxed approach to offers to purchase documents. Whereas in reality, so many things can go awry! Why continue with blank sections in the contract? Skipping initials? Filled in later?
Doesn’t this all open a can of worms down the road? Great article to read!
Why A Good Sale Starts With A Good Sale Agreement
The paperwork involved in the sale of a property is a potential minefield for both buyer and seller, and should not be tackled without the assistance of an experienced real estate agent and a conveyancing attorney.
Incorrect or incomplete sale documentation is not only likely to cause a delay in the transfer of the property to the new owner, but can also give rise to a number of other problems, all with potentially serious financial consequences, says Gerhard Kotzé, MD of the RealNet estate agency group.
“For instance, the lack of essential documentation that the conveyancer needs, such as proof of the buyer’s identity or marital status, could hold up the transfer and result in the situation where a buyer who has been allowed to take occupation becomes, in effect, a subsidised ‘tenant’.”
“The seller in such a case will have to make up any difference between the occupational rent and the monthly repayment on the existing home loan until transfer can be registered, and will also continue to be responsible for the rates and taxes on the property. He or she will probably also have to continue to insure the property – and pay the excesses on claims for any damage that occurs while the buyer is in occupation.”
Meanwhile, he says, neither buyer nor seller should ever be persuaded to sign a sale agreement or offer to purchase which includes blank sections that they have been assured will be “filled in later” by the agent or someone else.
“This could lead, for example, to the buyer facing a claim for the sales commission that is usually paid by the seller, or the seller being made responsible for the transfer costs that are usually met by the buyer.”
“Similarly, if the contingency clause giving the buyer a certain time in which to sell his or her existing property is left blank, he will theoretically be able to take as long as he likes to accomplish this, while the seller faces mounting holding costs and, quite possibly, a long delay in finalising the purchase of his next home.”
On the other hand, Kotzé notes, if an occupation date is agreed on but not filled in, and the seller fails to vacate the property on an expected date, the buyer might have to find and pay for alternative accommodation until the transfer is actually registered.
“It is thus vital for buyers and sellers to realise that offers to purchase become legally binding documents once signed by both parties, and that great care needs to be taken when they are being completed. Assistance from an experienced, registered estate agents is really valuable when it comes to ensuring that the interests of both parties are protected.”
Issued by RealNet estate agency group – http://www.realnet.co.za