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Tuesday, May 1, 2007
Remorseful day

A court judgment in March ruled that an expiry date on an offer to purchase a property is inserted solely for the benefit of the potential buyer, which he or she can choose to waive should the offer be accepted after the expiry.

The ruling came about after a certain seller accepted an offer to purchase after the specified expiry date, which she later attempted to use as way out of the contract.
“This was a case of seller’s remorse,” says Barak Geffen, Executive Director of Sotheby’s International Realty, South Africa, commenting on the outcome of the case.
“The decision reinforces the principle that once an offer to purchase is signed by the seller it becomes legally binding. If one suddenly develops seller’s remorse, it will take the consent of the buyer to make the agreement null and void.
“The ruling also highlights the importance of thoroughly considering the pros and cons of an offer to purchase and ensuring you enlist the services of a reputable agency to represent your property,” he adds. “The agency will work out the best deal for both buyer and seller, as well as accurately advise both parties through their in-depth market knowledge.”
In the recent court case, the agent found a buyer for the seller’s Sedgefield property, who signed an offer to purchase. The offer stated that it was irrevocable and would expire at noon on 8th November 2003. However the estate agent only faxed the offer to the seller the day after the specified expiry date.
“The seller signed the offer and faxed it back to the agent, but then realised that she could have obtained a higher price for her property and refused to sign any further documentation or respond to calls.”
An application to the Cape High Court was launched by the buyer to compel the seller to sign the necessary documents so that transfer could be registered. The seller opposed the application on the basis that because she accepted the offer after it had already lapsed, an argument the judge eventually ruled against.
“As an agent working for both parties it should be an imperative to get offers of purchase signed by both parties prior to specified expiry, thereby leaving no room for discrepancy,” Mr Geffen observes. “Sellers must realise, however, that this expiry deadline is there for the benefit of the potential buyer only.”

Copyright © Insurance Times and Investments® Vol:20.4 1st May, 2007
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