Sales Agreement in Property Purchase

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A sale agreement is a lawful agreement, which serves as the authorized document in the transaction of a property.

Before signing a sale agreement you need to pay attention to the following areas;

  1. The Terms of Payment

A sales agreement should outline the buying price of the property. Provisions for advance payment, or deposits should also be made, which is normally 10 % of the buying price, but it also differs depending on the developer’s inclinations, and a roster of the down payment subject on the agreement between the two parties. It is advisable that you review the signs-off and the payment only when you have come into an agreement with the seller since you can be denied to buy the home in case of default payment. You can also be charged with penalty fees, or even be forced to forfeit the house and some of the money you had paid for it. It is important to understand the terms of payment so that you can plan your finances.

  1. Completion time is a particularly crucial consideration if you intend to purchase an off-plan property.

It is important to ensure that you check the date for completion before signing the agreement. It is done after discussing the terms of the sales agreement with the developer. Having a completion date will help you arrange your finances as per your payment plan. Furthermore, you can use the completion date to hold your contractor responsible and when they delay your work and you can use your sales agreement when recording an objection against the developer.

  1. Event of default (termination)

It is good to know the repercussions that you will get in case of any default on either your side or that of the seller. Through this, you will can protect yourself against any action by the vendor that may be harmful to your interests and anything that will accumulate against you in case of any default payment, or when you fail to meet the set agreement as stated within the sales agreement.

  1. Specification of the Property

The details and all the necessary information about the property should be well outlined in the sales agreement so that the buyer can know well what they are buying. Specification of the property comprises of location, typology of the property, and other features. Knowing the specifications for the property will help you know if you will get value when you buy the property and also you can plan for the use of the property. If the property is for renting, you will use the features above to advertise it to the customers.

  1. Completion Documents

When you are done making all the payments on the property the seller will provide you with completion documents. They include the title deed, rent clearance, and rate clearance depending on the type of property in Kenya you are purchasing. These documents are listed in the sale agreement, but they also depend with the vendor. It is essential to go through the sale agreement before signing since when you sign the agreement you get lawfully bound to all terms and conditions.