Sales Agreements 101 - Everything you need to know before signing the dotted line
Category Advice
Perhaps the most pivotal document in buying and selling property, a Real Estate Sales Agreement covers all the essential components of any transaction between the two parties. As the agreement sets the stage for any transactions going forward, it is crucial homeowners have a thorough understanding of the processes involved before making a final decision.
We provide a basic framework to ensure that homeowners both experienced and new to the property scene have a foundational understanding of the process. It is in your best interest to remain protected from pitfalls in real estate down the road.
How is an agreement drawn up?
Simply put, a sales agreement is a stipulation signed by both the seller and buyer and is split into two essential documents. The first is the Offer to Purchase (OTP) signed by the buyer, and the second is the Acceptance of the Purchase (signed by the seller). To ensure that both documents are legally binding, both parties must reference each other's agreement before the property can enter the transfer stage.
Anything that is decided upon outside of the property sales agreement, e.g. word of mouth agreements, is not validated unless expressly stated in writing. Without the sales agreement, the property transfer process will not be registered at the Deeds Office.
Vital information required
Always keep in mind that sales agreements do not follow a typical process. There will always be individual concerns depending on the property. However, vital information required in any property sales agreement must include the following parameters.
-
Full Names
-
Identification
-
Physical Address
-
The agreed price for the property purchase
-
All registered details of the property
Any further stipulations may be optional. These would usually cover details such as property furnishings and fittings, the details of the property practitioner and the real estate conveyancer, divisions of responsibility, date of occupation, a voetstoots clause, and any provisions in terms of a breach of contract.
Who is responsible for drawing up the agreement?
In terms of drawing up the contract, there is nothing stopping either the buyer or seller from entering into a private agreement. However, we would always recommend seeking advice from experienced property practitioners before signing the bottom line. Their wealth of knowledge will ensure that you do not leave any loopholes in your contract which could come back to bite you in the future.
For buyers, a useful tip to remember is to include a clause in your OTP stating it is revocable before a certain period of time. Remember, the Sales Agreement is only considered legally binding once the ACCEPTANCE of Purchase is signed by the seller.
Plans for negotiation
Verbal negotiations through the assistance of an experienced property practitioner are advised before drawing up an Offer to Purchase. They will ensure a proper consensus. Should the seller take issue with the OTP and reject the price listed then the property sales agreement is immediately invalidated and a new agreement will need to be drawn up before a sale can complete.
Contact Ikonic Real Estate today.
For Real Estate professionals you can trust and rely on for industry-related expertise, contact us below for more information.
If you are looking to live in Silver Lakes Golf and lifestyle Estate, Silver Stream Estate, Lombardy Estate & Health Spa, The Ridge Estate, Six Fountains Estate, or Willow Acres Estate and surrounding areas, then Ikonic Real Estate is your preferred property practitioner to assist you in all aspects of the selling and buying process.
Office Number: 083 452 5599
Cell Number: 083 452 5599
Email: martin@ikonic.co.za
Ikonic Real Estate holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority.
Author: Bryce Anderson