Recently, the residential market has been lacking in secondary property listings. Buyers buying for self-use purposes are more eager to close the affordable property deals, as there’s a small amount of them available on the market.
But don’t think that signing a provisional agreement will secure the deal. It’s common to see property owners sell their flats to another prospective buyer who is willing to pay even more, as the owner can still make a good profit after refunding the deposit and paying compensation.
With market supply falling short of demand, some buyers would rather close the deal than receive the compensation. Here are some tips that help you secure your home purchase deal.
(1) “Must buy and must sell” clause
When signing a provisional agreement for sale and purchase, the buyer can suggest an additional condition – “must buy and must sell” – to ensure both parties have to complete the deal until the formal agreement is signed. This clause requires consent from both parties, which means either one can reject it.
(2) Sign only after a consensus is reached
Even if the apartment is love at first sight, don’t rush into signing the provisional agreement without filling in the necessary information. The clauses in the agreement should be mutually discussed and agreed by both parties. For example, unauthorized building works and related responsibilities would affect the title of the property. Also, if the transaction period is shortened by the owner, the buyer may not be able to apply for a mortgage loan on time.
(3) Increase the amount of initial deposit
The amount of initial deposit is usually 3-5% of the property price. But if you’re really into the flat, try paying an 8% deposit. This will make it difficult for the owner to cancel the deal, as the compensation cost will be higher than the original amount.