There has been many controversies on when exactly is a property sale or purchase transaction deemed closed or completed to prevent or disregard any form of complaint, issues of concerns, option to rescind or refund of the purchase money by the seller or the buyer would not be acceptable regardless of how genuine, tenable and reasonable the excuses or reasons are.
Many sellers and buyers of real estate properties find themselves in this position mainly due to poor due diligence on the property they intend to purchase or inability to go through the normal, adequate and comprehensive process of property sale transactions and contract agreement due to unavailability of fund or ignorantly cutting cost as some would put it.
Patently, I believe that real estate sellers and buyers, buyers in particular need to seek the opinion or engage the services of professional if they desire a hitch free, smooth and successful property sale transactions and contract agreement.
We have seen many cases of buyers who purchased a real property asset and later resurfaced few weeks after the deal has been closed with some reasons either reasonable or untenable and preposterous excuses and may also demand to renege the contract.
I have also had a case of a property being sold by someone who partly has no right or full right to sell the properties but managed to sell the property because his name was on the document of the property. The property was bought in his name for future use by his parents but decided to sell the property without the knowledge of the parents and the parents are now worried and looking for ways to buy back the property that has been sold few months earlier.
I quite agree and understand that buyers may be faced with unexpected problems and circumstances that may be beyond their control such as environmental problems and concerns such as incessant flood, natural disaster, high crime rate, health and safety issues of their family.
Similarly, the seller also may have good reasons to want to buy back the property from the buyer but the question is, could this be possible after the sale transaction process has been closed and the sale contract agreement signed and initialed by all parties involved?
When exactly could we say a property sale transaction deal cannot be reversible and above all, are there provisions of the law to take care of the problems or disputes that may stem from execrable property deals or contract?
As we all know, real property sale is a polymorphic process and every stage of the sales process is vital to the success of that investment but what we have seen in this part of the world is that, many consider these processes as unnecessary, waste of money or as they usually put it cutting cost and therefore compromise in many of these processes.
As a result, many are not happy, comfortable and satisfied with their new purchase, most times they feel cheated and wondered where they got it wrong or what they could have done better that would have averted the present predicament they found themselves in.
This brings us to the aim of this post, I want to help many understand this situation especially to acquaint them with the property sales transaction process and of course help them with some of the most important items they must take care of when purchasing a property as well as discuss the importance of seeking professionals advice and using escrow services to execute their property purchase deals.
I need you to please pay great attention to what am about to reveal to you on property sales transaction and contract agreement because this may make or mal your future transactions depending on the level of seriousness you attach to this vital information.
The good news is that, it will completely change the way you transact property deals as well as increase and improve your knowledge and understanding of these processes to enable you handle even more or much more complex and complicated real property asset transactions.
In an organized set up, when purchasing any real property, it is very important for you as the buyer to include all contingencies or clauses you might require that can protect your interest and that could ultimately help you get not only a great deal but also a smooth and hitch free deal in your offer letter that is sent to the seller or the home owner should in case you are buying directly from the owner.
This can easily and successfully be achieved by engaging the services of a real estate attorney knowledgeable in real estate transactions deals and you can also use the services of a reputable real estate broker or agent to do this for you so that you would not need to fret over this task.
It is the responsibility of your real estate attorney, broker or agent to prepare your offer letter at a fee and send it to the seller or the home owner with your earnest money of 10% to show how serious and committed you are in the sale transaction to purchase the property.
I must stress that, this must be after you might have decided that the property and the location are good enough, socially acceptable to you and of course meets all your criteria which is critical to successful real property asset purchase.
The contingencies you may need to include in your offer letter might be tied to foreseen issues that might show up or hinder the smooth sales transaction process such as financial, inspection, due diligence report, review of conditions and restrictions, home warranty, insurance and title commitment contingencies.
All these contingencies must be embedded or included in the offer letter to protect you and your earnest money during the period of the property sale transaction process in order not to find yourself in situation or circumstances fraught with difficulties, where backing out of the contract agreement without losing your earnest money or 10% deposit would be a major problem.
Most property purchases in civilized countries are carried out by escrow service companies, that serve as a third party between the buyer and the seller after an offer letter or the purchase agreement with all your contingencies must have been accepted by the seller.
The escrow company’s duty or responsibility is to now make use of the details or information on the purchase agreement of the offer such as the financing terms if it is not an all cash transaction, the buyer’s name, the purchase price and the specified time allocated for each and all the sale transaction events and processes to be accomplished which include inspection and reports.
All these information are used to generate the escrow instructions which will spell out who is responsible for what and when to ensure a hitch free, fair, smooth and successful contractual agreement between the parties involved in the property sale transaction process.
Once this escrow instruction is mutually agreed upon by the buyer and the seller, then the buyer is expected to conduct all necessary or required inspections and may also have an independent party perform the due diligence on the property to give an unbias opinion and report on the true state of the property to enable the buyer make an informed investment decisions.
Often time, property purchase period or sale transaction process may take two weeks if it is been handled by an investment firm or management company that is actively involved in real estate transactions and at times it takes a month and at most three months depending on how terms and conditions of the purchase agreement or the escrow instructions are met.
I must also emphasize that the escrow instructions must also have the closing costs of the property sale, where all items and costs associated with the property sales are listed along side who is customarily responsible for each payment of the listed items between the buyer and the seller.
I may not have enough time to go through some of the most important items or payments to be made either by the buyer and the seller for a successful property sales transaction to take place, this arguably is one of the most important and the most ignored aspect of property sales transaction in this part of the world particularly in Nigeria.
For this reason, most property sales transaction process are not properly executed probably to avoid paying taxes and other necessary payments on the purchase or cutting cost by undermining the relevance of paying for real estate professional services such as engaging a real estate attorney, broker, agents, property inspectors to perform due diligence on the property.
Most times buyers resolve to making use of incompetent experts who could easily compromise on the ethics of their profession in order to satisfy the buyer or simply because the buyer complained of unavailability of enough fund to properly and adequately go through the purchase or sale process as it should be done and as a result a lot is swept under the carpet which most times may later come to hunt the buyer.
It might also interest you to know that buyers who make use of escrow service company to execute their property purchase transactions are provided with the opportunity to rescind the contract even after they must have put pen to paper and paid for the remaining or the balance of 90% for the purchase of the property to the seller at the end or close of escrow.
But this window opportunity to rescind the sale contract agreement by the buyer is only for five days or a week after the close of escrow and it is already included in the escrow instructions and the laws that guide and regulate property sale processes.
In other words, the seller or home owner as the case may be does not have the right to tamper with any payment made by the buyer and besides the contingencies and the escrow service instructions would be enough to protect any payment made by the buyer.
Moreover, money for the purchase and the property will only exchange hands after both parties must have mutually accepted, signed and initialed the sales contract agreement and are satisfied and happy with the sales or the purchase process.
The basis for this is to ensure a thorough and comprehensive property asset sales transaction process and the fact that it takes time and careful analysis to successfully execute a property sale process.
Hence buyers are somewhat cut some slacks to ensure they get great value for their hard earned money by making sure they testify to the escrow service company that the property they saw few months ago or at the beginning of the escrow is still in that great condition or shape at the time of closing the sale contract process.
If there exist any complaint, repairs or replacement issues on the state or the condition of the systems in the property which could be electrical, mechanical, plumbing, heating or air conditioner after escrow must have been closed and the buyer decided to renege the contract then he or she must be ready to part with about 3% of the initial earnest money or 10% deposit.
The reason for this is that all the time frame as to when each event and all the sale or purchase process would be completed has elapsed and at this time the contingencies must have lost its efficacy and its ability to protect all the earnest money because the escrow service company has closed the sale contract for the parties involved.
However, If your discoveries are still within the time frame in the escrow instructions and properly taking cared of by the contingencies, you may end up getting your entire earnest money or 10% deposit.
I don’t want to belabour the importance of using escrow services rendered by reputable management companies, who can take their time to walk you arm in arm through the tedious and comprehensive processes involved in real estate property sale transactions in order to achieve your desired result and most importantly be happy and satisfied with your new purchase.
In conclusion, for those of you wondering what these important items and costs associated with acquisition of real property assets are, I promise to write an article on this in my subsequence post and we shall discuss some these important items, costs or payments that is essential for a smooth and successful sales transaction as well as determine who are customarily responsible for the payment of these items between the buyer and seller involved in real estate property sale transactions.
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