Signing the contract
Signing a formal Contract of Sale of Real Estate, is the final and most important part of the sale.
When the negotiations have concluded, and both parties are satisfied with the deal, it is put in writing in the form of a written and legally binding Contract of Sale of Real Estate.
Who prepares the contract document?
The Contract of Sale of Real Estate is the document by which the vendor makes a formal offer to sell the property to the purchaser. The contract is prepared by the vendor's legal representative, and then presented to the purchaser as the vendor's offer. When the purchaser receives the vendor's offer it is clear to the purchaser that the vendor has initiated the sale, and that the purchaser is being invited to accept
to the vendor's formal offer by signing the contract.
This approach contrasts with the rather unfair method adopted by real estate agents, whereby the real estate agent (who works for the vendor) prepares the purchaser's offer, but does so on the vendor's terms.
Why the vendor signs first
The vendor signs the contract first, because it is the vendor who is making the offer to the purchaser on terms that the vendor has already decided are acceptable.
The purchaser then has the opportunity to properly check the terms of the contract, with their own independent legal advice if required, before signing it.
This approach contrasts with the procedure adopted by real estate agents whereby the purchaser signs the contract first, and is immediately committed to what is effectively the vendor's contract.
How long does the purchaser have to accept the vendor's offer?
The vendor's offer is usually open for 3 days from the day the contract has been signed by the vendor. The purchaser may sign the contract immediately, to accept the offer, or may have the contract checked by their legal represenative first. The period of 3 days allows the purchaser time to choose either option.
Can someone else buy the property during the offer period?
The vendor will be locked into the sale of the property as soon as the purchaser has signed the contract to accept the vendor's offer, and confirmed to the vendor that the offer has been accepted. However, the vendor is under no obligation to keep the offer open, and can withdraw the offer at any time before the purchaser has accepted it.
For example, if the vendor has offered to sell the property to a purchaser and another purchaser offers more for the property, the vendor can withdraw the original offer by telling the purchaser in writing that the offer is withdrawn. Of course, if the purchaser signs the contract before the vendor's offer is withdrawn, the vendor will be locked in and cannot withdraw.
The purchaser's right to "cool off"
In most circumstances, a purchaser will be entitled to cancel the contract within 3 business days from the day of sale. For more information on cooling off CLICK HERE.
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