Signing an Offer to Purchase – Seller
In these days of electronic communication, there are times when an agent will send you an offer form for signature. You may notice when you receive it that the form is named ‘Contract for Sale’ and the form is actually a legal contract once all parties have signed, so it is important to complete (‘execute’ in legal parlance) the form properly. We have another post in our blog about how a buyer is to sign an offer. Now here’s what the seller needs to do.
The first page starts with the name of the real estate agent as it is the agent who will be administering the contract. Underneath that we write the full legal name(s) of the buyer(s). Next is the amount of the offer.
If you are happy with the amount of the offer (and you may already have engaged in verbal negotiation via your agent) then you don’t have to do anything in this section other than read it. If, however, you wish to counter-offer, you will need to write the amount of your counter offer, and initial the change. If there is more than one person (or entity) named on the Certificate of Title, everyone must initial any and all changes made.
Next is the settlement period. This is usually 28 days from finance approval (or acceptance if we are dealing with a cash offer.) If you are happy with the settlement period, you don’t need to do anything in this section, but if you want a longer or shorter settlement period, please discuss this with your agent and if there are changes to be made, then the new proposed settlement period must be written in and the change initialled by all parties.
The special conditions are usually standard – the buyer will initial to say they have seen the Certificate of Title and are happy with it, and if there is a dwelling on the property there will most likely be a requirement for a Termite Clearance (at the buyer’s expense) and a Building Inspection (also at the buyer’s expense.) There may be other special conditions. Read them carefully and if you are uncertain about anything, ask you agent. Each condition must be initialled by all parties.
At the bottom of page 1, all parties named on the Title must sign with their usual signatures.
On the second page you will find some legal information – please read it and if you are not sure about anything, ask your agent what it means.
On this page, you are named as the seller. Please check that your agent has entered your full legal name(s) correctly. The address on the form should be the one you are going to use for notices and correspondence during the settlement process.
Sign the form with your usual full signature in the area underneath where your name is written. You will need your signature witnessed by someone who is not a party to the sale (ie – neither the buyer nor the seller.) There are no qualifications required for witnessing a signature on an Offer – you can ask a friend, neighbour or workmate to witness your signature.
You will be given a copy of the Joint Form of General Conditions for the Sale of Land. This rather lengthy document sets out the rules for the sales and transfer process. It’s a bit of a dry read, but it is important. If you aren’t sure of anything, please ask your agent and we will be more than happy to discuss it with you.
At this point you will also be asked to nominate a Conveyancer or Settlement Agent. A Settlement Agent acts on your behalf during the sale and sorts out all the legal requirements for transferring the land from the seller’s name into yours. They will charge a fee for their services. If you have a Settlement Agent you like and/or have worked with before, you can nominate them here. If you aren’t sure, we can recommend a few firms with whom we have good working relationships. Please be aware that we never, ever receive finder’s fees for referring clients to Conveyancers.
Page 2 of a Contract – click on the image to enlarge
If you have agreed with the price and conditions offered, the signed form becomes a legally binding Contract for Sale. Any changes must be intialled by all parties, so you may get the Contract back and have to initial where indicated at some point during the process. If you does not agree with the price, you may counter with a higher price in which case the buyer will have to initial next to where you wrote the new price to indicate their agreement. Once everyone has signed their agreement to the price and the conditions, the date of the Contract becomes the latest date at which the parties have signed.
Once the Offer is accepted and becomes a Contract, the buyer and seller must then fulfil the conditions of the Contract within the stated time frames while the Settlement Agents take care of the legalities so that the sale may then be finalised.
If you have any queries or concerns about your Contract, you should contact your agent as soon as possible to discuss it.