Cancelling a sale of property after the sales agreement has been signed has major repercussions. Should the seller change his mind about the sale of the property, the costs involved with the cancellation can end up being quite costly.
Should the sale not be approved, both the seller and the buyer are able to walk away from the deal without any consequences.
There are numerous reasons why a sale is not approved every single time there is an offer.
Some of these reasons may include but are not limited to
However, if the seller cancels an approved sale for any other reason, he or she may be held liable for any financial implication involved with the cancellation.
The buyer may sue for out of pocket expenses which arise with being forced to purchase a house which is more expensive and out of their budget. Often, in these cases, the seller who cancelled the sale may be held liable for the balance between the selling price of his home and the selling price of the new home the buyer was forced to purchase.
Another aspect that must be taken into account is the cost of a conveyancing attorney. The cost payable to the conveyancing attorney will depend on how far the transaction has progressed before the cancellation.
Any administration carried out by a conveyancing attorney will come at a cost and the seller will be liable for these costs.
It is a common misconception that estate agents earn their commission based on very little work. However, this is far from true. The process of selling a home demands a lot of time and requires a large amount of paperwork.
Part of the process involves the advertising of the property as well as sourcing buyers and taking them for viewings. This takes time and costs money; therefore, the estate agent is entitled to claim their commission on a sale that has been cancelled. The seller will be liable for these costs.
There are a number of reasons why a seller would choose to cancel the sale of his property. Many would assume it’s because there is the possibility of a higher offer being made.
However, there have been cases where the seller was meant to transfer to another city or country and the transfer fell through after the signing a sale agreement.
Additionally, a simple change of heart can prompt a seller to cancel the sale. Regardless of the reason, there are significant financial implications involved for which the seller will most likely be liable.
It is important to remember that once a sale agreement has been signed by both the seller and the buyer, it becomes a legally binding contract.
To find out more about cancelling a sale or other matters related to property law in South Africa, call our property attorneys in Cape Town or Johannesburg.
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