Step 7: Contract Signing
This page contains a detailed description of Step 7 of the 12-step property sale process
Once your solicitor has reviewed the terms of the contract they will notify you of the deposit to be paid (normally a percentage of the purchase price less the booking deposit paid to the estate agent). The client will lodge this amount with their solicitor and makes an appointment to visit their solicitor to sign the contracts.
The contract for sale binds the parties to the completion of the sale. If you withdraw from the sale after this contract has been signed, you may lose your deposit. If you buy through private treaty your solicitor will check that the contract is in order before you sign it.
Once the seller’s solicitor receives the signed contract and the deposit, they and the seller will sign and return one copy of the contract to your solicitor. At this point the seller has legally agreed to sell you their property.
The Solicitor for the Seller will draft the Contract for Sale and send it to the buyer's solicitor along with a copy of the seller's Title Deeds. Both solicitors must ensure that the Contract reflects the agreement their respective clients intend to commit to and must take detailed instructions from their clients, either the buyer or seller to ensure all aspects of the transaction are reflected in the Contract.
Usually, fixtures and fittings are included in the sale unless specifically excluded. Fixtures and fittings are items like shelves, curtain rails, fireplace, light fittings etc. anything that is fixed or fitted to the property and removing it would require some repair work afterwards. Contents don’t go with the property unless specifically provided for in the Contracts e.g. furniture, curtains, electrical goods; A garden shed if removable would not automatically be included in the sale. It is for that reason that we recommend that the Auctioneer negotiating between both parties list the contents that are agreed for sale so as to avoid any delays once the contracts have been issued. The contract should exhibit a list of the contents included.
For a contract to be binding the Standard Law Society Conditions of Sale and Contract for Sale must be in writing, signed by both parties, exchanged and consideration such as the deposit paid. The contract will describe the specific area of land being sold, Names of Parties, identify the property in Sale and the price agreed.
As stated if you withdraw from the sale after the contract has been signed, you may lose your deposit. The introduction of this standard contract was intended to eliminate the need for individual solicitors to draft their own contracts and sought to give a fair balance of rights between Buyer and Seller.
You should now arrange for deposit monies to be lodged with your solicitor’s client account and make an appointment to see your solicitor.
Before signing the contract, it’s important to check that the property hasn’t fallen down or been damaged in any way, e.g. by a storm or fire etc. You should also do a final inventory immediately prior to completion (the previous owner should have already vacated the property) to ensure that the vendor hasn’t absconded with anything that was included in the price. You should have an inventory of the fixtures and fittings and anything that was included in the contract or purchased separately, e.g. carpets, light fittings or curtains, and check that they’re present and in good order. This is particularly important if furniture and furnishings (and major appliances) were included in the price.
You should also ensure that expensive items (such as kitchen appliances) haven’t been substituted by inferior (possibly secondhand) items. Any fixtures and fittings (and garden plants and shrubs) present in a property when you viewed it should still be there when you take possession unless otherwise stated in the contract.
If you find that anything is missing or damaged or isn’t in working order, you should make a note and insist on immediate restitution such as an appropriate reduction in the amount to be paid. In such cases, it’s normal for your solicitor to delay the signing of the contract until the matter is settled, although an appropriate amount could be withheld from the vendor’s proceeds to pay for repairs or replacements. You should refuse to go through with the purchase if you aren’t completely satisfied, as it will be difficult or impossible to obtain redress later. If it isn’t possible to complete the sale, you should consult your solicitor concerning your rights and the return of your deposit and any other fees already paid.
At this stage, you should also be signing your mortgage documents which your solicitor will return to your bank together with a date for the drawdown of funds. It is important that you keep in touch with your bank or mortgage broker if you are using one, throughout the process. Your bank will require that the conditions set out in your loan offer are all completed before you can draw down funds.
The buyer and their solicitor and their lending institution are involved in this step. It is important to coordinate all the required dates and tasks to ensure the sale progresses smoothly.