When purchasing a property, an agreement of sale is a crucial document that outlines the terms and conditions that both the buyer and seller must agree to before the transaction is complete. This legal document is used to protect both parties and ensure that the sale process runs smoothly. If you`re thinking of purchasing a property, it`s important to understand the key elements of an agreement of sale.
1. Purchase Price – The purchase price is one of the most important elements of an agreement of sale. It is the amount that the buyer agrees to pay the seller for the property. This amount is negotiated between the buyer and seller and should be clearly stated in the agreement of sale.
2. Deposit – The deposit is an amount of money that the buyer must pay to the seller as a sign of good faith. It is usually around 10% of the purchase price and is paid on the signing of the agreement of sale. The deposit is held in a trust account by the conveyancer until the transaction is complete.
3. Conditions – The agreement of sale will typically have conditions that must be met before the transaction can be completed. These conditions may include obtaining financing, obtaining building permits, and completing inspections. The conditions will be clearly outlined in the agreement of sale.
4. Chattels and Fixtures – Chattels are movable items that are not attached to the property, such as furniture, appliances, and personal belongings. Fixtures are items that are attached to the property, such as light fixtures, ceiling fans, and built-in bookcases. The agreement of sale should specify which items will be included in the sale and which items will be removed by the seller.
5. Closing Date – The closing date is the date on which the property will be transferred from the seller to the buyer. It is typically 30-60 days after the signing of the agreement of sale. The closing date may be extended if the conditions of the agreement of sale are not met.
6. Warranties and Representations – The agreement of sale should contain warranties and representations from both the buyer and seller. These are statements that each party makes about the property and the transaction. They are designed to protect both parties from any misrepresentations or misunderstandings.
In conclusion, the agreement of sale is a critical document in the purchase of a property. It`s important to read and understand the agreement of sale before signing it. If you have any questions or concerns about the agreement of sale, it`s essential to seek professional advice from a conveyancer or real estate lawyer. Understanding the elements of an agreement of sale will help you to make an informed decision when purchasing a property.