- When does the sale become finalised?
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 practitioner, are obligated to take the offer for the Seller’s decision. Remember, you are the Seller’s practitioner, and you represent them. 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 a property practitioner withhold an offer?
No! Once a Purchaser has signed an offer to purchase, the practitioner 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 accept one in favour of the other. They are not obligated to give either preferential treatment. Neither are practitioners allowed to interfere or manipulate the Seller’s decision.
- Must the Seller accept a Purchaser’s offer if they have offered the full asking price?
No! Even if the Seller gives a mandate to a practitioner to sell the property, they are not obliged to sell the property, even at their asking price. If they reject it, the Seller may still be liable to pay the practitioner’s commission, as the practitioner has fulfilled their duty as per the mandate received, but they have no obligation to the Purchaser.
- Is a verbal acceptance by the Seller enforceable?
No! Even if a Seller phones a practitioner or Purchaser informing them that they are accepting the offer and then changes their 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 their mind and accept it?
No! Once the Seller has advised the practitioner or the Purchaser that they have rejected the offer before the expiry date, they cannot change their mind and accept it. Once they have said no, it is a formal rejection of the offer, and they 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 their mind at any time 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 a property practitioner or attorney draw up the agreement so that it is compliant with the requirements 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 they have signed, is not merely making an offer; they are 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 their obligations, they will be in breach of contract. Parties may agree to cancel by mutual consent; however, if a property practitioner was involved, the Seller will be liable for the property practitioner’s commission. The payment of commission is not automatically cancelled, and the commission clause generally protects the practitioner’s commission in such circumstances.
