Understanding the Sale and Purchase Agreement

So, you’re in the final stages of buying or selling a home and you’re about to get down to the nitty-gritty. You’re going to have to sign a sale and purchase agreement which is a very important document. A sale and purchase agreement is a legally binding document between you and the other party who is either buying your property or selling you theirs. So, what do you need to know? Put simply, the sale and purchase agreement sets out the terms and conditions of the sale. This will include everything from the settlement date, to the deposit amount the buyer will need to pay, to the chattels being sold with the property – like curtains, dishwashers, stoves, etc. This next part is important: make absolutely sure you read everything carefully and seek legal advice before signing anything. Once you’ve signed, you’re locked in, so it pays to be as thorough as you possibly can. A buyer will often have conditions they need to be met. For example, a buyer might only agree to buy a home on the condition that they sell theirs first, or that they receive a satisfactory building report. Otherwise, a buyer can make an unconditional offer, meaning they have no conditions that need to be fulfilled. If you don’t like something in the agreement, ask to change it. The other party might be fine with your amendments, or they might want to negotiate further. When time is up and the conditions are met, the agreement becomes unconditional and the two parties are committed to the sale. Either way, the contract isn’t binding until you both agree on everything and sign on it. There’s an independent guide to help you understand the sale and purchase agreement. You can find out more and download the guide at settled.govt.nz/sandp

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