As the old saying goes, ‘having your roof over your head is one of the essentials of life’. However, with changing times and the increasingly busy lifestyle, most people today find it easier to rent a place than buy one. While renting a place could seem like the more comfortable option at the moment, buying a home is a more permanent and convenient solution for the long run.
Buying a house can be cumbersome and complicated. Hence, one must read the terms and conditions on all the documents carefully, before officially investing in the property. One of the essential home-buying documents is the property purchase agreement.
What is a Home Buying Agreement?
A Home Buying Agreement or a Home Purchase Agreement is essentially a legally binding contract between a buyer and seller which outlines the terms and conditions that protect the interests of both the buyer and the seller. This document also includes the purchase price that was fixed and is an excellent resource in helping the sale proceed smoothly. To make things easier for home buyers, here’s a list of the five significant clauses that one must include in the agreement.
1) The Indemnity Clause
This one’s a crucial clause which the seller and buyer insert as a safety measure to prevent any potential loss or damage. Since there are a lot of people involved in the buying and selling of property, legal issues are sometimes unavoidable. Hence, the seller and the buyer carefully draft this clause and every possible scenario which may cause potential damage; they include.
2) The Penalty Clause
The penalty clause is another crucial clause which is binding on both the buyer and the seller. Since property purchase is a question of land and money from both the parties, it is only fair that a penalty amount applies to whoever backs out from the deal for any reason whatsoever.
3) Right to Call Off Agreement
Having discussed the penalty clause, the ‘Right to Call Off Agreement’ is a provision for home buyers. As a purchaser, it is essential that one reserves the right to withdraw from the deal under certain circumstances without being financially penalized for it. A few of these circumstances could be as follows:
a) If the Bank Loan is not approved.
b) If the seller fails to provide legal or statutory documents for the property.
c) If the seller fails to provide all the legal documents at the time of the execution of the sale deed.
d) If the buyer finds a property default before the execution of the sale deed.
4) Outstanding Dues
Sometimes, it so happens that the person who previously owned the property might have taken it on loan. Hence, It is vital for the homebuyer to ensure through the purchase agreement that the seller will clear off all the outstanding dues concerning the property before the date of registration.
5) Special Clause
A special clause is a unique clause that every home buyer must include in the purchase agreement. This clause talks about certain special conditions and what the buyer and seller would do in the event of their occurrence. For example: Stating that the deposit money is not due until a few days after the completion of standard provisions such as Pest check and Building Approval.
For an average man, owning a house is one of the significant milestones in life. It is essential that when it comes to buying one’s dream house, one doesn’t forget the little things given the big picture. Another way to always ensure avoiding facing legal or constructional issues with the property is one must choose a reliable builder, that has not only a positive reputation in the market but also provides solidly constructed, sustainable, avant-garde homes which fit into your budget.
If you are looking for places in the suburbs, check out Why Kandivali Should Be Your Next Home Buying Destination.