Protection against a unscrupulous buyer and other useful tips when selling your property:
The sale of a property can be a very stressful event, as can be seen from our example below. If however you are prepared and understand the process, it can run smoothly and uneventful.
Suppose a seller has a valuable home and has been attempting to sell the house for quite some time, mainly due to poor economic conditions. Eventually, the Seller receives a private offer from Mr X. It is a cash transaction without any suspensive conditions. He does not want to pay a deposit, but provides a guarantee for the full purchase price. The Seller is very grateful and buys another property, based on this transaction. Meanwhile, Mr. X is sees another property he likes more and decides that the current transaction does not suit him anymore.
He cancels the contract and his bank withdraws the guarantee. What is the seller's position now:
1. Mr X had no basis to cancel the contract and therefore committed breach of contract.
2. The seller has two options (depending on the contract of purchase): she may force Mr X to proceed with the contract OR she can "accept" his cancellation and sue him for damages.
3. In both of the above-mentioned options, she must refer to the Court.
4. The unfortunate reality of any court proceedings is that it takes long and is expensive, without any guarantees of success, even if the facts are in your favour and you have the best legal team.
5. The main disadvantage is that the property is effectively OUT of the market once the Seller opts to force Mr X to proceed with the transaction.
6. The Seller ultimately decides to "accept" the Buyer's breach of contract, to reinstate the property in the market so that she can at least try to sell her property and sue Mr.X for damages.
How can a Seller prevent such a situation:
1. ALWAYS insist that the Buyer pays a deposit of at least 10%.
2. Make sure that the Buyer can afford the property and transportation costs.
3. Keep strictly according to the deadlines as contained in the purchase agreement.
4. Do EVERYTHING in writing and keep complete records of conversations and negotiations.
More tips to consider:
1. Never allow a buyer to pressurize or bully you into accepting an offer with which you are not satisfied or of which you do not understand all the terms and conditions.
2. Complete all documents in full and do not sign incomplete documents.
3. Be very careful about any suspensive conditions in an offer. A higher offer is not necessarily a better offer.
4. Remember that the SELLER chooses the transport attorney to act for and on her behalf. Choose someone who cares for your interests and who you trust. Engage
Your Attorney BEFORE you accept the offer so that you have the correct advice and assistance from the start. Contact Jaco Fourie, Maryke Landman or Paul Delport at Rauch Gertenbach Attorneys for more information or for any property related matters, at 044 601 9900 or email@example.com