Property Sales Contract [English for Salespeople]

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Property Sales Contracts are documents that legally describe the terms and conditions of an exchange of land, buildings or another type of property from one owner to another for an agreed upon payment.

Since Property Sales Contracts are required around the world, they will change from country to country and even state to state.

If you have ever seen a property contract, you may remember that they usually have many pages and details, but you will find that most of them include the five criteria we mentioned in our article “English for Sales People – English Sales Contract.

The five points we explain in that article are listed below.

  • The product or Service
  • Product or Service delivery
  • Cooling off/ Inspection Period
  • Guarantee or Warranties
  • Payment Arrangments

See if you can identify these points in our abbreviated (shortened) general Property Sales Contract.

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Unique Vocabulary

Even within English speaking lands, you will find that each country may have different words to describe the same thing, this is perhaps because of the legal vocabulary used in that country. Here are some of the more unique words you will read in a property contract.

Cooling Off

A period during which the Buyer could change their mind and walk away from the purchase without any further consequences apart from the loss of a small deposit or another penalty as explained in that part of the contract.

Deed/Title

A deed or title is the legal document stating who is the owner of the property; it will also have the property address and other legal details.

The Deed/Title may also have further information that legally influences ownership of the property recorded on it, such as a mortgage or other legal claim.

Escrow

Because of the value of the house and money involved, many people prefer to have a third party to negotiate the exchange between the Buyer and Seller.

Often referred to as Escrow companies, they will hold the purchase money and property Title/Deed until the agreed upon date for the exchange. At that time they will make sure that each party to the contract has fulfilled their obligations before making the transfer.

Financing

When the Buyer does not have sufficient money to buy the property entirely, it is common for them to take out a loan to complete the purchase.

This type of loan is called a Mortgage, and it is recorded on the Title/Deed of the property, why?

If an owner/borrower fails to repay the loan, the Lender of the loan may have the legal right to take ownership of the property and recover their money by selling the property to another Buyer.

Financial Institution

An organization that provides monetary funds for investments, these include banks and credit unions among others.

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Interest Rate

An interest rate is a percentage of the total loan amount charged as a fee on a daily, monthly, or yearly basis.

Settlement/Closing

Settlement or closing describes the final exchange of money and legal ownership between the Buyer and Seller on the contract date. It is also when all payments to any Sellers or Buyers agents are made, plus all legal costs to date.

The Seller is also responsible for making all payments related to water, electricity, and any other services provided to the property up to that date as its owner. Once a settlement has occurred, the Buyer becomes responsible for these Property costs.

Utilities/Services

Utilities describe various services connected to the property like Water, Electricity, and Gas among other things.

Since we are speaking specifically about Property Contract Sales, we have listed only the words that you are most likely to see there.

However, within Property Sales, Renting, and leasing there are many more unique words which we have not included. The name for this industry in general around the world is Real Estate.

Please note, this contract is an example only and has not been written to conform to any specific country’s property laws. Please do not use this as a property contract, instead seek a qualified legal advisor to assist you with your particular needs.

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Property Sales Contract 

PARTIES:

Seller/s:

Jack David Spencer and Jill Anna Spencer

Buyer/s:

Roger Bill Musgrove and Abigail Lisa Musgrove

PROPERTY DESCRIPTION: 

123 ABC Drive

North Sydney, Sydney 6001

New South Wales

Australia

Legal Property Plot and Boundaries:

City of Sydney

Lot 100 of North Sydney Parish

New South Wales

Area: 250 Square meters.

Corner of John Smith Road and Jane Doe Street.

PURCHASE PRICE AND SETTLEMENT (CLOSING)

 

Contract Price:                                               $1,000,000 AU

 

Initial Deposit held in Escrow:                          $5,000 AU

 

Date Contract entered into:                         1 January 2017

 

Contract Settlement (Closing) Date:                       1 Abril 2017

 

Cooling Off Period 

Once signed, this contract will become a legally binding sale of the property located at the address listed above.

The Buyer has 30 days from the signing of this contract to withdraw without any further penalty apart from the $5,000 deposit required upon signing.

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Terms & Conditions

The full purchase amount will be payable no later than the contract settlement date of 1 April 2017.

Failure to pay in full by such time may result in the Seller withdrawing the offer of sale from the Buyer and returning any funds paid minus a fee of 20% of the contract sales price.

In return for payment in full, the Seller will hand over to the Buyer any and all legal rights to the property along with all structures and services attached to it.

Upon Settlement, the Buyer will assume full responsibility for the cost of maintenance (Outside of the Warranty,) and any services used on the property, including and not limited to water and electricity.

Both Buyer and Seller have agreed upon ABC Escrow Company to look after all settlement matters connected to the house.

Warranty

The completed property will have a one year warranty on any damaged or faulty materials. Settling and cracking is considered to be normal wear and tear and is not covered.

Damage caused by any occupants negligence shall not be covered by this warranty and will become the owner’s responsibility to repair.

Financing

Buyer acknowledges that on the date of Settlement they will provide all pending funds required to complete their contractual obligations.

Should the Buyer finance the property purchase from an outside source such as a Financial institution,  they will advise the Seller of this fact.

The Buyer understands that the financial provider of the Loan has the legal right to place a claim on the Title / Deed in the event the Buyer has failed to make the required payments.

If the Buyer cannot pay the outstanding amount in full at the time of Settlement for any reason,  the Seller can choose to;

  • Honor the contract until financing can be secured.
  • Withdraw from the contract and withhold any money already given as a deposit.
  • Enforce Buyers obligations under this contract and secure financing on their behalf at any interest rate.
  • Withdraw from this contract without any further consequence on the part of the Buyer.

Acceptance of Terms

Upon signing this contract both the Seller and Buyer agree to the Terms and Conditions and understand their obligations set out within it.

Any changes to the Terms or Conditions of this contract must be set out in an addendum and signed again by both parties. In such case, both the Buyer and Seller acknowledge that the added addendums terms and conditions will supersede those within the original contract.

Buyer/s Signature:

Roger Bill Musgrove and Abigail Lisa Musgrove

Date:

 

Seller/s Signature:

Jack David Spencer and Jill Anna Spencer

Date:

 

Witnesses Signature:

Date

 

The above Property Sales Contract shows what is usually included when the property has already been constructed.

Most Contracts provide for multiple options and arrangements between the Buyer and Seller along with their legal and contractual obligations, all explained in great detail.

For property under construction or not yet built, the Sales Contract will include even more details about what the obligations of the Buyer, Seller, and his or her Builder will be.

The agreement will outline who is responsible for paying what and so on during the construction of the property, what the completed structure/s will look like, and what is included when the property will be handed over to the Buyer.

Property Sales contracts can be very detailed and complex, which is why many people ask a lawyer or other legal authority to revise them before signing. Taking this step has saved people thousands if not millions of dollars around the world!

So if you are looking to buy or sell a property, make sure you understand what is in your Property Sales Contract before signing on the dotted line.

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