- When does the sale become finalized?
As soon as the Seller has signed the offer to purchase the sales have been finalised and become a valid agreement of sale. Until the seller has actually signed the offer no sale exists. If the seller makes any changes to the contract it then becomes a counteroffer and the sale will only become valid once the Purchaser has accepted the changes. Until the Purchaser signs the changes no valid sale agreement exists.
- Can the Purchaser withdraw after signing the offer?
The offer normally has a time period in which the seller can accept the offer. Until this period expires the Purchaser cannot withdraw and you as the agent are obligated to take the offer for the seller’s decision. Remember, you are the seller’s agent and you represent him. The seller may accept the offer at any time during this period. (Remember, once you have an offer you have performed your duty and should not let anyone deny you your opportunity to earn your commission.)
- Can an estate agent withhold an offer?
No! once a purchaser has signed an offer to purchase the agent is compelled to present it to the seller forthwith.
- What if the seller receives two offers simultaneously?
If the seller receives two offers from two different prospective purchasers, the seller has complete freedom to either reject both offers or to accept one in favour of the other. He is not obligated to give either preferential treatment. Neither are agents allowed to interfere or manipulate the seller’s decision.
- Must the seller accept a purchaser’s offer if he has offered the full asking price?
No! Even if the seller gives a mandate to an agent to sell the property, he is not obliged to sell the property, even at his asking price. If he rejects it the seller may still be liable to pay the agent’s commission as the agent has fulfilled his duty as per the mandate they received, but he has no obligation to the purchaser.
- Is a verbal acceptance by the seller enforceable?
No! even if a seller phones an agent or purchaser informing them that he is accepting the offer and then changes his mind and does not accept, no sale exists. By law, all property sales MUST be reduced to writing and signed by all parties before a valid agreement of sale exists.
- Can the seller accept the offer after the expiry date?
Not unless the purchaser is still willing to buy the property and there is an addendum signed extending the acceptance date that was originally allowed in the offer to purchase. If no addendum is signed, then the offer has lapsed and is no longer of any force or effect.
- Can the seller reject the offer and then change his mind and accept it?
No! once the seller has advised the agent or the purchaser that he has rejected the offer before the expiry date he cannot change his mind and accept it. Once he has said no it is a formal rejection of the offer and he cannot later accept it without the purchaser’s consent to do so.
- Is a purchaser bound to a verbal offer?
No! according to the Alienation of Land Act, no one is bound to any sale agreement of immovable property unless it has been reduced to writing and signed by both parties. A purchaser can change his mind anytime before signing an offer to purchase.
- Can a purchaser or seller compile their own offer to purchase?
Yes! However, it is always advisable that either an estate agent or attorney draw up the agreement so that it is compliant with the requirement of the Alienation of Land Act.
- How binding is an offer to purchase?
Once the offer has been signed by both parties, including the acceptance and a signature of all parties to any changes, it is a legal and binding contract. A purchaser, once he has signed is not merely making an offer, he is making a firm intent to purchase the property from the seller.
- Does either party have any rights to cancel the contract?
As long as both parties comply with their obligations, neither one has the right to cancel the contract. If either party does not comply with his obligations, he will be in breach of contract. Parties may agree to cancel by mutual consent, however, if an estate agent was involved the seller will be liable for the estate agent’s commission. The payment of commission is not automatically cancelled, and the commission clause generally protects the agent’s commission in such circumstances.