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THE PROPERTY SALES PROCESS
SALE AND PURCHASE AGREEMENT
Step 7: Sale and Purchase Agreement
Step 7: Sale and Purchase Agreement
Once a potential purchaser indicates they would like to submit an offer on a property for sale, let them submit all the information we require to draft the REINZ e-form sale and purchase agreement by completing the Offer to purchase Information form on our website. This form also covers all the Purchaser's Consent information which is critical for us to have on record. Once this form is submitted, it will be sent to Office Support directly who will assist with the creation of the actual Sale and Purchase agreement document.
When reviewing the unconditional dates and the settlement date selected, please ensure there are at least 12 working days separating these 2 dates as the Real Estate Trust requires a 10 day release period for the deposit.
Once the document is complete, it must be approved by the Compliance Manager prior to being presented to the purchaser/s for signatures. Once the purchaser has signed the offer, please check that all required signatures are on all pages. Then present to signed offer to your vendor/s. If however more than one purchaser has indicated they wish to submit an offer, it is a multi-offer and we are legally obliged to follow the multi-offer process to the letter.
The Multi-Offer Process:
- All purchasers must notified that they are now in a multi-offer and be sent the link to the multi-offer acknowledgement form on our website to complete and submit.
- Regulations stipulate that once a multi-offer is called, a deadline must be communicated with all potential purchasers. This deadline must not be longer than 48 hours, unless it is over a weekend, in which case the deadline must end Monday 5pm.
- Each offer submitted must be sealed in an envelope and all envelopes kept save until the deadline has passed.
- If all offers are received by the same salesperson, that salesperson may present the offers to the vendor,
- If offers are received through multiple salespeople, the General Manager must present the offers to the vendors.
- All envelopes must stay sealed and only opened in the presence of the vendors.
- The vendors can decline all offers, decide to negotiate with one offer, or decide to accept one offer.
- The vendors can not negotiate with more than one potential purchaser at any time.
- Once the vendor has decided how they want to proceed, the purchasers who submitted the rejected offers must be notified and given the opportunity to leave their offer "on the table" in case negotiations with the selected offer does not reach an agreement.
- Once a vendor has accepted an offer and the property is under contract, rejected offers can be presented again as back-up offers if the purchasers so wish.
Conjunctional Sale Process
- When a salesperson from a different real estate company wants to bring buyers to your listing, they can request that a Conjunctional Sale Agreement is put in place. This agreement will result in them earning commission on the sale of the property if their buyer ends up buying it.
- The salesperson will normally contact the listing agent and ask if they can bring buyers to the property. Before you can agree to this, the salesperson has to complete the "Request to enter into a Conjunctional Sale Agreement" form on our website and submit it. Once the request is received, we must first make sure none of the Haze salespeople are already working with the particular buyers. If they are, we can not approve the request from the other sales person.
- Haze Real Estate has a fixed rate for Conjunctional Sale Agreements: The listing sales person earns 60% of the salesperson's portion of the commission and the selling salesperson 40%. Before approving any conjunctional agreement, the other real estate company has to agree that if the roles are reversed, they will at least pay 40% to our salespeople. We already have this arrangement with a number of companies, but request your general manager to contact the other company and get this arrangement confirmed in writing before agreeing to a conjunctional sale agreement.
- Also, in the first 4 weeks of a listing going live, active buyers will find your listing themselves, thus negating the need to enter into a conjunctional sale agreement with any salesperson. After 4 weeks it is more likely that the particular buyer might have missed your listing and it could be advantageous to enter into such an agreement.
- Also, approval of such a request is dependent on the vendor. The vendor must authorise such an agreement before the listing salesperson can approve it.
- If the request for the agreement is approved, arrangements for the viewing can be made.
- The salesperson can only bring the buyers specifically named in the request tot the property - nobody else. The rule is one buyer, one request.
- If this buyer wish to submit an offer on the property, they must do so through the selling salesperson (from the other real estate company), who must deliver the offer to purchase (created on the REINZ e-form) to the listing salesperson who will present the offer to the vendors. Only the listing salesperson or his/her General Manager or Principle Agent can present offers to our vendors.
- From here on the sales process runs as normal, but the details of the conjunctional agreement must be added to the "Transaction Report" to ensure they are paid as per the arrangement.
Referral of a Buyer Process
- A buyer can be referred to the listing salesperson by anyone. This is often the preferred way to deal with buyers working with salespeople from other companies instead of entering into a conjunctional sale agreement with them.
- Haze Real Estate has a fixed referral fee of 20% of the salesperson's portion of the commission.
- For the referral to be recognized, it must be in writing and this record of the agreement must be saved in VaultRE on the property record.
- The referral must also be noted in the Transaction Report.
- Basically the contact details of the buyer is passed to the listing salesperson who handles the process as per normal from that point forward. The other salesperson is not involved at all.
Once the sale and purchase agreement has been fully signed by both the purchasers and vendors, the document is uploaded to VaultRE and Office Support notified. They will check the document and send it to the Compliance Manager for a final check before it goes to the solicitors of both parties. A copy of the signed agreement is also sent to both the purchasers and vendors. Office Support will send the documents to the relevant solicitors and parties.
The sales person is responsible to follow up on all the conditions of the contract to ensure there are no delays. Work closely with the solicitors during this part of the process as they are controlling it with their client's instructions.
For listings signed on paper forms prior to 1 June 2020, the vendor is still required to sign the Vendor Consent form as the old listing form did not cover these points off.
Sale and Purchase Agreement Resources
Sale and Purchase Agreement Resources
- REA Guide for Sale and Purchase Agreement
- Transaction Report Form
- Offer to purchase information form (OTP Form)
- Multi-offer process
- Purchaser's multi-offer acknowledgement form
- Request to enter into Conjunctional Sale Agreement
- Information as to how to obtain a LIM from FNDC
- REA Client Consent for licensee to acquire interest in property form
- Approved suppliers and recommended building inspectors
- Vendor Consent Form (for old listing agreements)
- Compliance Process
- Purchaser complete Offer to purchase Information form online
- Office Support and the salesperson draft the Sale and Purchase Agreement in REINZ e-forms
- Compliance Manager must approve the agreement prior to it being presented to the purchaser for his/her signatures.
- Purchasers sign completed and approved agreement
- Present the offer to vendors if it's a single offer
- If it's a multi-offer, follow the process detailed.
- Once you have a complete signed agreement document, contact both the vendor and purchaser and confirm they are happy for you to date the agreement.
- Once dated, send the document to Office Support (Monday to Friday and to the General Manager over weekends or public holidays) who will check it, then they will pass it to the Compliance manager for a final check, before we send the originals (x2) to the 2 solicitors. This must take place within the day or early the next day / first workings day; and
- Copies of the agreement to each party (vendor and purchaser).
- Upload a signed copy of the agreement to VaultRE
- Make sure all offer are uploaded to VaultRE, even if they were declined.
- Facilitate access to the property as appropriate to meet contract conditions.
- Ensure deposit payment instructions are sent promptly when contract is unconditional and follow up with the purchaser and their solicitor to ensure deposit is paid promptly.
- Facilitate and attend pre-settlement inspection
- Arrange and personally attend the handover of the keys once the vendor's solicitor has confirmed settlement is complete and keys can be release.