To sell a domestic property may not be an easy task. If you want to make the selling process easier, don』t miss out the following information!
To find a Buyer
There are different ways to sell your property, you can sell the property on your own, through an appointed property agent or at an auction. If you want to use a property agent, you must appoint licensed agents. Pay attention to the following points when you are signing the estate agency agreement with the appointed agent:
- Validity period of the agreement;
- Amount of commission and time of payment;
- Whether the agency relationship is a 「non-exclusive agency」 or 「exclusive agency」. In the latter case, the agent may charge you a commission even if the property is not sold through him/her but other property agents;
- Whether the agent acts only for you or acts for both you and the buyers. In the latter case, the agent needs to inform both parties of the dual agency and disclose the amount of commission he/she charges the other party.
To Sign Provisional and Formal Agreement
Provisional Sale and Purchase Agreement
When you and the potential buyer agree on a negotiated price, both parties will enter into a provisional sale and purchase agreement. It is a legally binding contract which must be fully obeyed by the involved parties . If the formal sale and purchase agreement cannot be signed, the parties can rely on the provisional agreement to proceed with the deal or to sue for compensation.
The provisional agreement must include information such as the address and price of the flat, amount of initial and further deposit, when to sign the formal agreement, the completion day, etc.
Formal Sale and Purchase Agreement
A formal sale and purchase agreement should be drafted by a solicitor based on the provisional agreement. It contains terms that are more detailed and is intended to replace the provisional agreement. You can include any special conditions you want as long as they do not violate any relevant ordinances or contradict the terms of the provisional sale and purchase agreement.
Encumbrances against the Property
As a vendor, you should reveal to the purchaser the encumbrances against the property, if there is any, such as:
- government order for removal of unauthorized building work (UBW);
- unpaid property management fees;
- repair works of the building concerned;
- any mortgage over the flat that has not yet been discharged; or
- lawsuit concerning the flat.
Although the property agent or the buyer can check the above information through a land search (if the encumbrances have been registered in the Land Registry), it is in your interest to reveal all the encumbrances and negotiate with the buyer to avoid subsequent disputes, which could hamper the entire sale process. Besides, you have a duty to disclose the latent defects, which a buyer cannot discover by a reasonable inspection of the property.
Stamp Duty is imposed on the agreement for sale of residential property and the rates vary with the amount or the value of the consideration.
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