select
|

Sellers must have a way out in linked deals

Many homebuyers these days first need to sell their own properties before they can proceed with the purchase transaction, and most sale agreements make provision for this with a “subject to” clause.
 
But what happens when something goes wrong and the buyer’s own sale falls through? “This can and does happen,” says Berry Everitt, CEO of the Chas Everitt International property group, “due to the withdrawal of the second buyer’s mortgage finance, perhaps, or due to insolvency and sometimes even due to ill-health or death, and the first seller in the chain needs to be protected in such circumstances.”
 
The “subject to” clause usually stipulates a date by which the buyer must sell his own property, and also usually provides for simultaneous transfer, since the buyer needs the proceeds of his own sale to fund the purchase of his new home.
 
However, he says, it is very important for the first seller that the clause it also contains a specific transfer cut-off date – and a provision that the whole deal will fall away if something goes wrong with the buyer’s sale and he cannot or will not take transfer by that date.
 
Writing in the Property Signposts newsletter, Everitt says that if the clause is not worded in this way, the seller might well find himself put “on hold” for many months and even years while the buyer sorts out the problems with his transaction.
 
“And this is just one of several reasons for homeowners to check the sale agreement that their agent will be using, before awarding a mandate.
 
“They should be aware that there is no such thing as a ‘standard’ sale agreement in the real estate industry and if necessary should get this specific contract checked and explained by their own attorney to ensure that their interests will be properly represented and protected.”
 
Issued by Chas Everitt International


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 26 Apr 2018
      Banks are showing an increased appetite to lend according to first quarter (Q1 2018) property statistics recently released by ooba, South Africa’s leading home loan originator.
    • 26 Apr 2018
      Moving into a new home comes with such a long list of expenses that one often searches for ways to cut back on costs. Hiring a professional moving company is one of the first expenses that many buyers tend to try and work around, especially now that purse strings are even tighter owing to the VAT increase that took effect this month.
    • 26 Apr 2018
      Investors looking to buy a property offshore can potentially recoup their money faster through short-term rentals than traditional letting options, all the while earning income in a foreign currency.
    • 25 Apr 2018
      Whether you are a seasoned seller or new to the game, putting your home on the market is an exciting moment. To ensure you get the best possible outcome these 8 value adding additions to your home is worth the effort.
    • 25 Apr 2018
      After four years of unprecedented growth fuelled by semigration, the Southern suburbs market faced a number of challenges in 2017, including dwindling affordability and a marked slowing in house price growth with many sellers forced to lower their prices in order to secure a sale.
    • 25 Apr 2018
      Mall of Africa, is celebrating its second year of sensational success. This splendid super-regional shopping centre first opened on 28 April 2016, and has grown in popularity, performance and profile since then.
    • 25 Apr 2018
      While the role of trustee in a sectional title scheme is a voluntary and unpaid position, it is one that comes with huge responsibility. Trustees have a fiduciary duty towards their scheme, says Chinelle Hewit, Operations Manager at sectional title finance company Propell.
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK