Sunday, June 7, 2015

Sale And Purchase Agreement (S&P)

Sale and Purchase Agreement (S&P) is a written contract signed between the buyer and seller stating amongst others, the terms and conditions under which a property will be sold. The Sale and Purchase Agreement usually are done by solicitors.

There are no fixed rules on the form of agreement for purchases from existing house owners (more commonly called sub-sale). However, it is common practice that upon signing of the S&P, 10% of the purchase price be paid to the seller, and the purchaser be given 3 months to pay the balance of purchase price with an extension of 1 month if he fails to do so within the first 3 months' period. 

Interest at the rate of 8% per annum calculated on a daily basis is normally charged for the extension period. Payment of the balance of purchase price is usually made to the solicitors acting for the seller as stakeholders to ensure redemption of the house (if the same is still charged or assigned to a bank or financial institution at the time of sale).

No comments: