Unpacking Property Ownership: Joint Tenancy vs. Tenancy-in-Common
TLDR When a property has multiple owners, the choice of ownership type is crucial to determine how shares are distributed...
Read More
TLDR
When a seller unexpectedly withdraws from a property transaction before a contract is signed, they are legally allowed to do so. However, once an Option to Purchase (OTP) is issued and exercised, both parties are bound by a contract. If the seller backs out after this stage, legal action can be taken, and the buyer may be entitled to compensation. To protect against unreliable sellers, buyers should pay attention to seller responsiveness, read contracts carefully, keep records of communications, and understand their rights. Ultimately, deciding whether to buy, sell, or wait depends on individual circumstances. It’s recommended to seek advice and guidance to navigate the real estate market effectively.
From searching for your perfect home, negotiating prices, managing finances, and looking into different home loan options, you need to do your best to ensure a successful purchase.
But what if the seller unexpectedly withdraws?
Are they even allowed to do that?
And if so, is the buyer entitled to any form of compensation?
Until a contract has been made and accepted, neither the buyer nor seller are obligated to the other party.
At the start of the selling process, before any contracts have been signed, the seller still has the right to pull out of the transaction if they no longer wish to sell their property – even if the buyer has been viewing listings and setting up meetings to view the property in person.
Thus, if you’ve expressed interest verbally but haven’t yet been handed an Option to Purchase (OTP) or sales agreement, the seller is able to revoke their offer without consequence.
When Sellers Cannot Back Out of the Deal
After putting pen to paper on the OTP, things are now undeniably official.
Once the seller issues an OTP, and if you decide to exercise the OTP, you and the seller enter into a binding contract.
It’s essential to read the OTP details carefully to see if the seller is able to withdraw from the agreement once the OTP has been exercised; while typically the seller is not allowed to back out once the OTP has been exercised, buyers typically can withdraw but will forfeit any deposits or option fees they have paid.
When you exercise an OTP, you may be required to sign a sales agreement, making it binding for both you and the seller. Unfortunately, this contract leaves no room for backing out; if the seller fails to uphold their end, any option fees or deposits paid by you must be refunded.
You could consider taking legal action against the seller to make them stick to their obligations; however, unless they have not refunded your money or caused you to suffer huge losses, it might not be worth going through the hassle or expense.
How to Protect Yourself Against ‘Bad’ Sellers
Most of the time, sellers don’t back out of property transactions – but there are some simple steps you can take to avoid any potential troubles from a reluctant seller.
1. Find Out Why They Are Selling the Property
When you chat with the seller or the agent, observe if the seller appears determined to sell the property, or if it looks like they are somewhat undecided.
Asking the seller or agent why they are selling can help you spot an uncertain seller. If the seller is simply upgrading their home, that’s usually a sign they are eager to sell.
However, if it appears they are just trying to see what price they can get for their home without a pressing need to get rid of it, they might not go through with the transaction.
2. Pay Close Attention To The Seller’s Responsiveness And Adherence To Deadlines
If the seller fails to fulfill their commitments, isn’t punctual for viewings, or does not adhere to timelines, there is a chance they may not follow through as promised.
Pay close attention to how they answer your calls, respond to your requests for information, and if they issue the OTP or sales agreement when they said they would.
3. Read the OTP and Sales Agreement Carefully Before Signing
Before signing any documents, it’s critical to thoroughly read through all contracts, such as the OTP and sales agreement, which will outline your rights and obligations as well as those of the seller.
Be sure to double-check if there are any stipulations that allow the seller to back out of the deal or end the contract, and if that doesn’t sit well with you, then speak up and try to have them removed.
4. Keep a Copy of All Communications
It’s essential to keep all communication with the seller and agent – whether in person, via text, or email – in order to have a paper trail should you ever enter into a dispute.
Be sure to save a copy of all messages sent and received for your records. To ensure that verbal conversations are not forgotten or misconstrued, it’s best to write down and acknowledge the details of the agreement in a text or email afterwards.
This way, you’ll have solid evidence of any verbal agreements made with the seller.
5. Know Your Rights When Dealing with Sellers
To guard yourself from any possible disputes, it’s wise to take a few precautionary steps before signing any documents, such as reading all contracts thoroughly and saving a copy of all interactions with the seller and their agent.
Despite the fact that most sellers don’t end up obstructing their property transactions, it’s always prudent to be aware of your and the seller’s rights, as well as keep an eye out for a seller who may be untrustworthy.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
Discover 7 New Condos Close to an MRT Station in 2023
TLDR When it comes to finding the perfect home near MRT stations in Singapore, several exciting new launches stand out...
Read More
The Future Of Singapore Property Investing: 5 Trends To Watch Out For
The future of Singapore's property market is shaped by several emerging trends that reflect cautious optimism, enviable locations, and sociable...
Read More
The Top 5 Renovation Tips For Increasing The Value Of Your Singapore Property Investment
When it comes to increasing the value of your Singapore property investment, strategic renovations can make a significant difference. Here...
Read More
Top 5 : How Does Investing In Luxury Condos In Singapore Compare To Investing In Other Real Estate Asset Classes In Terms Of Long-Term Capital Appreciation?
Investing in real estate has long been considered a reliable way to build wealth and diversify one's investment portfolio. In...
Read More
5 Singapore’s Best Property Investments for 2023: Where to Find Growth and Income
The Singapore property market has long been a sought-after investment destination, with its stable economy and growing population making it...
Read More
Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market
Singapore's real estate market has been a popular choice for foreign investors due to its stable economy, strategic location, and...
Read More
Exploring Singapore: The Top 5 Surprising Facts You Never Knew
Singapore, a city-state in Southeast Asia, is known for its rich cultural heritage, diverse population, and vibrant food scene. This...
Read More
Top 5 Must-Know Facts about Luxury Properties in Districts 9 of Singapore
Singapore, a bustling city-state known for its impressive skyline and vibrant economy, has always been an attractive destination for property...
Read More
Why Property Investing is the Key to Early Retirement in Singapore
Investing in property is a popular way to build wealth and achieve financial freedom in Singapore. With the right strategies...
Read More
5 Top Reasons Why Chinese Love to Invest in Singapore Property Market Today
Here are the top 5 reasons why Chinese love to invest in Singapore's property market today. 1. Political stability: Singapore...
Read More
Discover 7 Reasons to Sell and Right-Size Your Property
TLDR The increasing trend of right-sizing properties in Singapore is driven by various factors such as lifestyle changes, financial gains,...
Read More
When will En-Bloc set to Become Reality Beyond 2023?
TLDR The real estate market is experiencing a lull in en-bloc activities due to various factors. Higher Additional Buyer’s Stamp...
Read More
Is the Singapore Property Market Set for a Dip in 2024?
TLDR The Singapore property market is experiencing shifts with Morgan Stanley adjusting its outlook on major developers. A forecast predicts...
Read More
The Top 5 Impact Of Singapore’s Ageing Population On The Property Market And Investment Opportunities
Singapore's ageing population is having a significant impact on the property market and investment opportunities. The top five effects include:...
Read More
6 Reasons to Think Twice Before Hiring a Friend or Family Member as Your Agent
TLDR In Singapore, hiring a friend or family member as your property agent can be risky. Disclosing sensitive financial details...
Read More
5 Pros of Buying a New Development
Deciding whether to buy a new development or a resale property can be a challenge. In the next few video...
Read More
I Bought a Mega-Home : Hear 7 Homeowners Spill their Heartfelt Remorse
TLDR The article discusses various challenges faced by residents living in massive condo complexes in Singapore. From long elevator wait...
Read More
Why Aren’t Spacious, Wallet-Friendly Homes Our Reality Yet?
TLDR The article discusses the current housing market in Singapore, focusing on the challenges faced by individuals like Sherlyn Tan...
Read More
Top 5 Cocktail Bars in Singapore for a Night Out
Singapore, the vibrant city-state known for its impressive skyline and diverse culture, is also home to an exceptional cocktail scene....
Read More
