What to Check in an Offer to Purchase a Property

Property agreements, also known a deed of sale or offer to purchase, can be intimidating at first glance. With so many lengthy sections and the use of a lot of legal language, many people simply skim over the agreement, sign it and hope for the best. This, however, can be detrimental to your long-term financial well-being. It is important to understand the legalities of buying or selling the property. You should always check the contents of the agreement of sale to protect yourself and your rights.

An agreement of sale should always include the personal information of both buyer and seller, details of the property, the purchase price and conditions that must be met for the sale to proceed.

This post discusses what should be contained in a property agreement of sale.

What a Property Agreement Typically Includes:

Property sales agreements typically have your personal details, a description of the property, purchase price, payment terms, possession, what happens in the event of default and suspensive conditions.

Personal Details

The agreement should include the details of both buyer and seller. It is recommended that the full names ID numbers, contact details, and addresses of both parties are contained in the agreement.

Purchase Price and Payment Terms

This section should include the total purchase price, the deposit amount and how the purchaser will pay of the property (cash or mortgage, etc).

Possession

This section will deal with when the purchaser would take possession. Possession would normally occur upon registration.

Default

A default (also known as a breach) is when a party fails to comply with their obligations as set out in the agreement. Normally the agreement will state that the innocent party can call upon the defaulting party to remedy their breach and, if the defaulting party does not remedy their breach after being call upon to do so, the innocent party can decide to either cancel the agreement and sue for damages or enforce the agreement by compelling the defaulting party to perform in terms of the agreement.

Suspensive conditions

A suspensive condition is a specific requirement or event that must occur before a contract becomes legally binding, effectively putting the contract “on hold” until the condition is met. For example, the agreement might state that “This sale is subject to the condition that the purchaser is approved for a mortgage bond to finance the purchase of the property.”

The suspensive condition is not met within the period specified, the agreement may lapse.

Enlist RC Smith and Associates

Our property attorneys can assist in all aspects of in property law, including drafting agreements of sale and property transfers. Let us help you become a homeowner – contact us today.