Take care when entering into a purchase agreement
Buyers of residential property all too often enter purchase agreements without carefully reading the documents they are signing. This can from time-to-time lead to problems which, of course, a good conveyancer would have warned the client about.
In a recent case a potential home purchaser and his wife, both of whom were income earners, made an offer for a home subject to the usual condition that the offer be conditional on their being awarded a mortgage bond.
When the couple were granted a bond, it transpired that the interest rates were far higher than they had expected – and the repayment more than they had anticipated, even with the stringent economic measures applied to the approval of the bond – but contractually the purchasers were legally committed to the purchase of the house.
The couple approached the seller, asking to be allowed to cancel the sale. He finally agreed to this, but had to be compensated to cover the amount due to the estate agent as well as a damages charge for not proceeding with the transaction. The seller could very easily have stuck to the terms and conditions of the contract and, had the issue then been taken to court, he would almost certainly have won. The estate agent, too, could quite legitimately have sued for his commission.
Our advice to purchasers
Our advice to you, the buyer, is this: It is absolutely essential in making offers that the terms of the offer to purchase are properly understood because the consequences which could arise from non-performance of one’s obligations in terms of the offer can be serious.
If you are looking to purchase residential property and are unsure about anything surrounding your offer or the purchase agreement, please do not hesitate to contact us at Gunstons.