Two people want to buy my property- What do I do?

You ask both purchasers what their best price will be and request them to sign an offer to purchase for that price. An offer without putting pen to paper should not be taken seriously and the purchaser should be requested to complete and sign a written offer to purchase. The Alienation of Land Act provides that all sale of land must be in writing. An oral agreement to buy and sell land is completely null and void. We can provide you with a blank offer to purchase agreement for completion.

Do-it-yourself sales are generally problematical for the following reasons:

• Sellers are generally incapable of being independent and objective and cannot effectively negotiate the sale of their own properties;
• For fear of upsetting the purchaser, the seller will shy away from calling for the all-important deposit;
• Private sellers who have their own show days, tend to not actively engage the prospective purchaser to find out precisely how they can make the purchaser realise that the purchaser’s requirements are being fulfilled by this particular property;
• They allow the purchaser to use their own bank to apply for a bond instead of using a Bond Originator who is most effective in driving and monitoring the process. This is because there is an intense incentive driven focus to get the bond granted.

 

Test the seriousness of the buyer:

• We recommend that you make an appointment with your conveyancer to conclude the negotiations and to actually sign up the offer to purchase in their offices. Getting a purchaser to go to a conveyancer’s office, will pin down the purchaser and will commit him to sign an offer to purchase there and then;
• The benefit is that both parties come away, an hour later with a signed and binding contract. One should avoid the situation where a draft sale agreement is e-mailed to each party’s attorney for scrutiny, resulting in a protracted succession of round-robin nit-picks;
• A conveyancer will be up-to-date on current bond application time periods. A recent sale agreement collapsed because the parties inserted that the bond should be granted within 5 days over the weekend, which effectively gave the bank an impossible 3 days to process the application.

 

The offer to purchase would deal with the following:

• It is very unlikely at this time for 100% bond to be granted as the banks require a deposit to be paid upfront.
• All of the banks are on the lookout for “loaded deals” whereby the purchase price is inflated for the purpose of obtaining a mortgage loan which will be greater than the actual real selling price. The practice of using an inflated mortgage bond to return some of the loan to the purchaser is roundly condemned and will be prosecuted as fraud by the banks;
• Banks will not allow transfer costs and other payments to be funded from the bond grant;
• One should prevent the chain of interlinked transfers from extending beyond two properties;
• if the purchaser is obliged to first sell his own property in order to realise the money to buy your property, you must insert a condition that links the two transactions to each other and facilitates the end transfer receiving payment from the sale of the purchaser’s property;
• the bond grant time period should be 30 days; but much longer if the purchaser is self-employed;
• The seller must insist that the purchaser pays a deposit.

 

Balancing competing offers to purchase:

• If there are 2 purchasers who wish to purchase the same property at the same time, it is best to request both purchasers to complete and sign those offers to purchase on the basis that they submit their best offers and best prices;
• One should provide that both offers to purchase must be kept open for a couple of days on the understanding that the purchaser will not be able to revoke such offers to purchase within the stipulated time period;
• Accordingly, the offer to purchase must stipulate that it is irrevocable until a certain date that must be inserted in the offer to purchase;
• This will enable the seller to collect multiple competing offers to purchase so that he can assess them within a couple of days and choose the best offer ; once all the competing offers have been gathered;
• On the odd occasion there have been disasters where the seller has by mistake sold the same property to 2 different purchasers at the same time; both of whom want to sue the seller, demanding transfer;
• Assistance from an everyday expert will generally be free and will avoid inconclusive and ineffective negotiations resulting in sales collapsing.

 

Who Appoints the Conveyancer?:

• It is the seller’s prerogative to appoint the conveyancer;The law of sale provides that it is the seller’s duty to make arrangements to deliver the article that was sold;
• The same principle applies in arranging to have the property registered into the purchaser’s name.  The seller does this by signing a Power of Attorney to Transfer the property in favour of his chosen conveyancer. This amounts to a legal instruction to give transfer, which is required by the Deeds Office.
• From a practical point of view, which is more important; it is the task of effectively collecting payment of the purchase price that should determine who is the best person to chase up the purchaser;
• Examples would be the purchaser deciding that he doesn’t want to pay occupational rent and therefore the transfer must be delayed to synchronise dates to favour the purchaser.
• The purchaser wanting his purchase to be delayed so that he can first collect money from the sale and transfer of his own property, when nobody was made aware that the cash was not readily available.
• The purchaser wishing to stall payment due to exchange control considerations.When the purchaser chooses the conveyancer, more often than not, the purchaser wishes to stall the matter and wants to control the process, as well as the conveyancer who would generally take instructions from whoever appointed him.
• The conveyancer may feel tempted to take sides with the purchaser and against the seller.
• In the past there have been many instances of unhappy and powerless sellers, who have not been informed of progress and have been kept in the dark, due to the purchaser controlling and/or delaying the payment process through the conveyancer.
• In conclusion, it is always best to request a conveyancer to check the proposed offer to purchase document before signing it into law, as costly mistakes which cannot be reversed, can be avoided.