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Click here for sample Sale and Purchase Agreement Residential Property
Click here for sample Sale and Purchase Agreement Business Property
Negotiating these documents can become stressful for all parties: if you are unsure please call your agent or broker to discuss, don't lose the sale for the sake of a 2 minute call.
The Sale and Purchase Agreement
The sale and purchase agreement outlines the buyer's offer, the date of settlement, and any conditions that must be met before the sale goes ahead. The agreement is prepared by the real estate agent, if one is involved, or by
the buyer's lawyer in the case of a private sale. In both cases you should discuss the terms and conditions outlined in the agreement with your lawyer before you sign it.
Unconditional Offer
This is an outright offer to buy your property. You should be 100% certain before you accept the offer, as once you have accepted you will be legally obliged to go through with the sale.
Conditional Offer
A conditional offer is also a binding contract; provided that all of the buyer's conditions are met. The buyer can only back out if one or more of their conditions are not satisfied. Common conditions include:
Subject to title search - this means that the sale will only go ahead if there are no ownership, access or other claims recorded on the property title.
Subject to valuation - this means that the sale will go through if the valuation is acceptable to the buyer and their financial institution if one is involved.
Subject to finance - this means that the sale will go ahead if the buyer's financial institution approves buyer's finance requirement.
Subject to a Land Information Memorandum (LIM) report - this means the sale will only go ahead if the property (including any alterations) complies with all building regulations.
Subject to a builder's or engineer's report - this means the sale will only go ahead if the buyer is satisfied that the house or land it is on are sound.
The buyer may wish to set other conditions. For example, subject to certain repairs being carried out. Talk to your lawyer about anything you are unhappy or
unsure about. Don't sign the sale and purchase agreement until you understand and are happy with the conditions.
Negotiation, acceptance and deposit
You may accept an offer straight away or may negotiate on the price or other aspects of the sale. Your real estate agent, if one is involved, will act as the "go-between" until you and the buyer reach a
happy medium. In a private sale you will need to do this negotiation yourself or rely on your lawyer. If you cannot agree on a price you can withdraw from the negotiation process. Remember that if there are any changes to the sale and purchase agreement, you should let your lawyer know
before you sign. Once both you and the buyer have signed the agreement it becomes legally binding.
Once the agreement is signed by both parties the buyer will normally be expected to make a deposit, usually between 5-10% directly to the real estate agent or to your lawyer. The deposit will be placed in a trust account until all conditions have been met.
Settling your conditions
The sale and purchase agreement will state the amount of time the parties have to settle the conditions. When all conditions are met, the offer becomes unconditional, the sale will go ahead and the property will be sold.
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