Price by negotiation
What is price by negotiation?
The property is placed on the market with an asking price, or “by negotiation” with no fixed asking figure. Offers are invited from purchasers who have inspected the property. All contracts relating to land must be in writing, so the offer to the vendor is drawn up by the salesperson on the Real Estate Institute Sale and Purchase agreement.
This offer is signed by the purchaser and usually accompanied by a 10% deposit cheque. The deposit is usually payable to the real estate agents’ trust account. The deposit is normally asked for at the time the purchaser makes the first offer on the property and is a demonstration of the seriousness of the offer.
The offer may be either:
• Conditional - having one or more conditions to be met within a specified period
(eg. subject to a building inspection).
• Unconditional. No conditions are included.
The offer is then presented to the vendor for their consideration. If the offer is at an acceptable level, the vendor will sign as acceptance and the sale is concluded. If not at an acceptable level, the offer may be counter-signed by the vendor and sent back to the purchaser for their consideration. This may happen several times until the price and conditions are satisfactory to both parties and a sale is concluded.
At this point, the Sale and Purchase agreement is dated, and the agreements are forwarded to both the vendor’s and the purchaser’s solicitors. It is normal practice for the salesperson to give copies of the completed agreement to the vendor and the purchaser as well. They then have documentation of when the possession date is and of what chattels go with the property.
Settlement/Possession Date:
The process by which a sale and purchase of property takes place. It is commonly conducted through lawyers and involves the payment of the purchase price (less any deposit already paid) in exchange for the Certificate of Title, a Transfer Document, and a release of previous charges over the property. Keys to the property are usually either handed over to the purchaser or his/her lawyer at settlement, or able to be picked up from the salesperson immediately following settlement. Normally, the settlement date and the possession date are the same.