Can I reject a signed offer to purchase in favour of a higher offer?

An offer to purchase is a legal document and, once signed by both the buyer and seller, it becomes a legally binding agreement.

Property Blog Articles | Advice | Contractual Matters | Market News

A seller may receive numerous offers to purchase on a property being sold and may select which to accept or reject. However, an offer to purchase is a legal document and once signed by both the buyer and seller, it becomes a legally binding agreement.

As with any such contract, it is vital to scrutinise all the terms and conditions within the contract carefully to make sure everything is in order before signing. Once signed though, both the buyer and seller are bound by these terms and conditions, and are required by law to perform accordingly to meet their obligations based on this agreement.

However, there are certain situations under which an offer to purchase may be cancelled after signing, and a new offer to purchase signed.

One such situation is where the price of the property being sold is less than R250 000. In such property transactions, there is an automatic “cooling off” period that typically lasts five days. During this time, should either party to the agreement decide not to proceed with the sale for whatever reason, they may cancel the contract in writing with no further consequences. As such, should the seller decide that there is a more beneficial offer for the property, he may accept this alternative offer after cancelling the original.

Another situation where a seller may cancel an offer to purchase in favor of another, is where this is allowed within the timeframe of and prior to a suspensive condition contained within the contract being fulfilled. This is also known as the continuing marketing clause. For example, should the sale of the property be dependent on the buyer obtaining the necessary finance from a financial institution within a specified period of time, this suspensive condition may also include a clause allowing the seller to accept an alternative offer and cancelling the current offer after giving due notice. This is to protect the seller from losing out on a sale while waiting for a potential buyer’s bond approval.

This is only possible, however, where such a clause is included in writing in the signed offer to purchase.

It is also worth noting that before accepting a new offer to purchase, a seller should confirm cancellation of the first signed offer to purchase in order to avoid any legal recourse due to breach of contract.

#‎AskSnymans‬ your property-related legal questions on Facebook.

10894

Recommended for you

Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Appointing multiple executors of a deceased estate

6927

The decision of who should be appointed as the executor of an estate can be made by the testator. While it is common for a single person to be appointed, it is also possible for a testator to appoint more than one person to share this role which can bring with it certain added complications.

Read More
Property Transfers | Bond Registrations | Snymans Attorneys
Contractual Matters

Buying a property with an existing tenant

7273

When purchasing a property with a tenant already in place, certain aspects should always be considered before the offer to purchase is signed.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

The long lease

12444

There has been a great deal of talk about 99-year leases which seems to have many, including Parliament, in a frenzy. What does a 99-lease entail? What happens at the end of the lease? Can your children inherit this piece of land? Below we answer some of the key concerns when it comes to a long lease.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Compliance Certificates and Home Inspections

12434

Before a property is sold and registered in the buyer’s name, it’s important that it is compliant with relevant regulations and that all parties are aware of the condition of the property and what maintenance or repairs might be needed. The buyer and seller each have responsibilities in this regard and it is important that both parties fulfil these obligations.

Read More
Property Transfers | Bond Registrations | Snymans Attorneys
Contractual Matters

4 common mistakes when selling your home

13109

Whether you’re selling your home for the first time or you’ve done it all before, it’s easy to get caught out by a few common pitfalls. That’s why we’ve put together this guide on four common mistakes and how you can avoid them.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

Can I reject a signed offer to purchase in favour of a higher offer?

An offer to purchase is a legal document and, once signed by both the buyer and seller, it becomes a legally binding agreement.

Property Blog Articles | Advice | Contractual Matters | Market News

A seller may receive numerous offers to purchase on a property being sold and may select which to accept or reject. However, an offer to purchase is a legal document and once signed by both the buyer and seller, it becomes a legally binding agreement.

As with any such contract, it is vital to scrutinise all the terms and conditions within the contract carefully to make sure everything is in order before signing. Once signed though, both the buyer and seller are bound by these terms and conditions, and are required by law to perform accordingly to meet their obligations based on this agreement.

However, there are certain situations under which an offer to purchase may be cancelled after signing, and a new offer to purchase signed.

One such situation is where the price of the property being sold is less than R250 000. In such property transactions, there is an automatic “cooling off” period that typically lasts five days. During this time, should either party to the agreement decide not to proceed with the sale for whatever reason, they may cancel the contract in writing with no further consequences. As such, should the seller decide that there is a more beneficial offer for the property, he may accept this alternative offer after cancelling the original.

Another situation where a seller may cancel an offer to purchase in favor of another, is where this is allowed within the timeframe of and prior to a suspensive condition contained within the contract being fulfilled. This is also known as the continuing marketing clause. For example, should the sale of the property be dependent on the buyer obtaining the necessary finance from a financial institution within a specified period of time, this suspensive condition may also include a clause allowing the seller to accept an alternative offer and cancelling the current offer after giving due notice. This is to protect the seller from losing out on a sale while waiting for a potential buyer’s bond approval.

This is only possible, however, where such a clause is included in writing in the signed offer to purchase.

It is also worth noting that before accepting a new offer to purchase, a seller should confirm cancellation of the first signed offer to purchase in order to avoid any legal recourse due to breach of contract.

#‎AskSnymans‬ your property-related legal questions on Facebook.

10894