BEWARE OF BUYER CONDITIONS: PROTECT YOURSELF FROM HIDDEN RISKS IN THE CONTRACT

Beware of Buyer Conditions: Protect Yourself from Hidden Risks in the Contract

Managing Buyer Conditions: What Every Seller Needs to Know

Selling a property is one of the most significant financial transactions you will ever make, and it comes with many complexities. Among these are the conditions often attached to an Offer to Purchase. While these conditions may seem like harmless formalities, they can have profound implications for the success of your sale. Sellers must approach buyer conditions with caution and ensure they fully understand the risks involved.

What Are Buyer Conditions?

Buyer conditions, also known as suspensive conditions, are specific requirements outlined in the Off er to Purchase that must be met before the sale can proceed. Common examples include:

• Subject to sale of the buyer’s property: The buyer must sell their current property before they can purchase yours.
• Subject to bond approval: The buyer must secure financing from a bank or financial institution.
• Due diligence periods: The buyer may request time to conduct inspections, surveys, or valuations of your property.

While these conditions are standard in many real estate transactions, they can pose risks if not carefully managed.

Why Sellers Should Be Cautious

Delays in the Sale Process Buyer conditions can significantly delay the finalization of your sale. For instance, if a buyer’s purchase is contingent on selling their property, you may face weeks or even months of uncertainty while waiting for their transaction to conclude. During this time, your property remains off the market, potentially causing you to miss out on other serious buyers.

Risk of a Failed Sale If a buyer cannot meet their conditions—such as failing to secure financing or sell their property—the deal can fall through entirely. This leaves you back at square one, often with wasted time and lost opportunities to attract other buyers.

Limited Control As a seller, you have little control over the buyer’s ability to meet their conditions. Their delays, financial difficulties, or lack of preparation can derail the process through no fault of your own.

Impact on Your Plans Delays or failed transactions can disrupt your own financial and logistical plans, especially if you’re relying on the proceeds of the sale to purchase another property or settle debts.

How to Protect Yourself as a Seller

Include Time Frames in the Offer

Insist on clear, reasonable deadlines for fulfilling buyer conditions. For example, specify that bond approval must be secured within 14 days or that the buyer’s property must be sold within 30 days. This prevents indefinite delays and gives you the option to move on if the conditions are not met.

Continue Marketing Your Property

Do not take your property off the market until all suspensive conditions are met. Consider including a 72-hour clause in your agreement, allowing you to continue accepting other off ers and giving the current buyer a limited period to fulfi ll their conditions or step aside.

Vet Buyers Carefully

Work with your estate agent or attorney to assess the fi nancial and logistical preparedness of potential buyers. A buyer with pre-approved fi nancing or no dependency on selling another property is generally a safer bet.

Seek Legal Advice Before Signing

Before accepting any Off er to Purchase, have it reviewed by a legal professional. They can help you identify problematic conditions, suggest modifi cations, and ensure the agreement protects your interests.

Be Realistic About Risk

Understand that even with precautions, there is always some risk involved. However, by being proactive and well-informed, you can minimize potential pitfalls and keep control of the process.

Final Note:

Buyer conditions are not just harmless footnotes in a contract—they are critical components that can influence the success of your sale. As a seller, it is your responsibility to approach these conditions with caution and ensure that you are not placing yourself in a vulnerable position. By setting clear boundaries, continuing to market your property, and seeking expert advice, you can navigate buyer conditions effectively and protect your interests.

Remember, the ultimate goal is not just to sell your property, but to do so on terms that work for you. If you need assistance reviewing an Off er to Purchase or understanding its conditions, our team at LB Vorster Attorneys is here to help. Don’t hesitate to reach out for guidance and peace of mind during this important transaction.