You are putting an offer in on a house, the sale and purchase agreement has been drawn up (usually by the real estate agent) it is time to sign - for your own peace of mind check that the sale and purchase agreement is correct.
Your Sale and Purchase Agreement Checklist
- Date - is the agreement dated correctly (at the top).
- Purchaser – The name(s) of the person(s) purchasing the house.
- Property - The Address, Estate, and Legal Description of the property – these should be the same as on the title document which can be provided (and checked) by your lawyer.
- The price you want to pay for the house – what you are offering - both numerically and in words.
- Deposit - The deposit amount - these are funds that you must have available to pay if/when the contract becomes unconditional.
- Possession - Check that this date (the date you want to take over ownership of the property) is correct.
- Conditions - Check these are correct and agreeable to you.
- Tenancies – Check to see if there are any
- Futher Terms of Sale - These are also referred to as 'Conditions'. Check that any conditions you require are present, are worded correctly, and are agreeable to you.
- Schedule 1 (Chattels) - Are these what you expect to be included - is anything crossed off or excluded.
- Check that all the pages of the agreement are present
- Check that no clauses in the agreement have been crossed out - if they have - find out the reasons and the implications.
- Check that all the pages and amendments have been initialled.
Who is the Purchaser on the Sale and Purchase Agreement?
Be careful when checking the name of the purchaser(s). You need to correctly name all of the people who will be owners of the property. These names can be people, company’s or trusts.
If you are unsure who the purchaser of the property is going to be – you can add ‘or nominee’ after the purchasers name (i.e. John Smith or Nominee) – this gives you scope to change the name.
It really is best to know exactly who/what is going to be purchasing the property when filling in the sale and purchase agreement. Remember any change to the contract – even a change to the name is considered countersigning.
Adding Conditions to Your Sale and Purchase Agreement
There can be conditions added to the sale and purchase agreement in both the 'Conditions' section on the first page and the Further Terms of Sale section later on in the document.
The 'Conditions' section provides a structure to the way in which the conditions are dealt with in the body of the agreement. Any conditions that are specified in the 'Further Terms of Sale' section can be drafted to meet your requirements - which is often preferable.
Tenancies Noted on the Sale and Purchase Agreement
Tenancies can be an issue – if the property is tenanted check to see what the tenants lease agreement is. If they have a fixed term tenancy they have a legal right to live in the house until the end of the fixed term.
If it is a periodic tenancy – 42 days notice needs to be given to the tenants (if you, or your family) are going to move in. For more info on tenancies check out the tenancy services website.
Check With Your Property Lawyer
It is always best, and we highly recommend, sending your sale and purchase agreement to your lawyer to look over before you sign. Especially if there is some unusual conditions, sections crossed out or anything you are unsure about or have questions about - run them past your property lawyer.
Are You Ready to Sign?
When you have finished checking have one final think - have you done all you possibly can to assure yourself that you know what you are signing?
Are you feeling pressured? Don’t worry about taking a bit more time to do some more checks and research. Don’t sign until you are assured that you know what you are committing to.
The Propertytoolbox Home Buyers Guide
For all you need to know about making an offer on a house – check out the Propertytoolbox house buying guide.