After a buyer has identified potential land and gone for the site visit, it is important that they get to understand what goes on next before purchasing the property.
There are two documents that the buyer needs to understand:
- Offer Letter.
- Sales Agreement.
- OFFER LETTER
This is a document that details the terms and conditions of the transaction. It is drafted before any payments are made and signed by both the buyer and the seller.
One thing to note is that, this is not a legally binding document. Meaning, at any moment, the buyer may decide to back off from the deal.
Below are the contents of an Offer Letter:
- Name and Address of Buyer.
- Name and Address of Lawyer.
- Purchase price.
- Down payment.
- Terms and conditions.
The offer Letter clearly shows how the buyer wants to purchase the property and on what terms.
It also eliminates double allocation of the property. Again making the purchase process seamless as negotiations will be made easy. Lastly, you get a detailed history of the property you are going to purchase.
- SALES AGREEMENT
This document states the joint consent of both parties and signed by them and their lawyers as witnesses.
A Sales Agreement is usually drafted after the buyer has inspected the property using his/her team of experts.
A search of the property should also be conducted before any documents are signed. The buyer’s lawyer does the search so as to cushion him in case of any irregularities.
Below are contents of a Sales Agreement:
- Payment Method
- Transaction period
- Agreed price
- Details of buyer and Seller.
- Plot number and size
- Details of the Lawyer
- Location of the property
- Terms and conditions
It is important for the buyer to have knowledge of this information as it helps you differentiate between the two.
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