Questions and answers regarding buying and selling a property

From the moment you have become interested in a property until signing the contract of your new home, you will face a number of issues. This is obvious, as you will not be buying a house every day.

buying a property

What does the purchase involve?

If, during the purchase process, the seller and buyer agree on matters that are most important to them (usually this concerns the price, completion date and cancellation clause), the seller’s estate agent will put the agreements in writing in the purchase deed.

Cancellation clauses are an important topic. As a buyer you will not get a cancellation clause automatically. For example, should you want a cancellation clause for financing you will have to state this while making your offer. It is important that the parties also agree on the additional agreements and cancellation clauses before the purchase deed is drawn up. Take a penalty clause for example, if either one of the parties fails to meet his obligations.

When a consumer buys a property the Sale of Immovable Property Law stipulates that a purchase is finalised only if this has been put in writing. As long as a purchase deed is not drawn up and signed by both parties the purchase is not legally valid.

As soon as the buyer and seller have signed the purchase deed and the buyer (and the solicitor, if applicable) has received a copy of the deed, the statutory reflection period for the private buyer will come into effect. Within this reflection period the buyer can still refrain from purchasing a house. If the buyer does not refrain from the purchase within this reflection period and has his finances arranged and possible other cancellation clauses do no longer constitute an obstacle either, the conveyance will take place at the solicitor’s office on the agreed date.

What is the reflection period?

During the reflection period the buyer can still cancel the agreement. This provides the opportunity to, for example, consult experts. The reflection period will last (at least) three days and starts on the day that follows the day on which the buyer receives the deed signed (by both parties) or a copy thereof. The reflection period ends near midnight of the last day of the reflection period. Thus, the moment the buyer received the copy of the deed, is of no consequence.

What does ‘being under offer’ mean?

If the estate agent mentions ‘being under offer’, this means that he has a serious candidate, whom he has promised not to enter into transactions with others. However, that doesn’t imply that viewings cannot proceed anymore. In that case, the estate agent should make it clear that it is ‘under offer’.

If I offer the asking price, will the seller be obliged to sell the property to me?

No, he won’t. As it happens, the highest court, the Supreme Court, determined in a ruling that the asking price of a property is an invitation to make an offer. If you offer the asking price mentioned in an advertisement or a property guide, then you are bidding. The seller may still decide whether to accept your offer or not, or whether he will have his estate agent make a counteroffer. He can even decide to increase the asking price during the negotiations.

What does ‘plus costs’ mean?

‘Plus costs’ means that the costs of the conveyance of his property are payable by the purchaser. These ‘plus costs’ consist of the following:
– Conveyance tax;
– Solicitor’s fees for drawing up the conveyance deed;
– Land registry costs for the registration of the conveyance deed.

In addition to these costs, the buyer shall take into account:
– Solicitor’s fees for drawing up a mortgage deed;
– Land registry costs for registering a mortgage deed;
– Valuation fees;
– Mortgage adviser fees.

Purchasing costs payable by the purchaser never include estate agent fees. If a seller contacts an estate agent for the sale of his/her property, the estate agent fees are payable by the seller. If the buyer contacts an estate agent for the purchase of a property the buyer will have to pay the estate agent fees.

Selling a property

Is ‘agent commission’ included in the ‘plus costs’?

No, it isn’t. ‘Plus costs’ are never included in estate agent fees. If you hire us to sell your property, the costs of our services will be payable by you. If the buyer hires an estate agent for the purchase of a property, the costs of services shall be payable by the buyer.

What is a purchase option?

Legally, an option gives a party the opportunity to enter into a purchase agreement with the counterparty, by means of a unilateral declaration. In this instance, parties do agree on purchase conditions, whereas the buyer will be given a reflection period of one more week.

Such an option is still applicable when a newly built home is being purchased. When buying existing property, the term ‘option’ is often wrongfully used. In this case it means that a seller’s estate agent can make certain commitments to an interested buyer during the negotiation process. Such a commitment could include that an interested buyer will be given a few days’ time to think about an offer. In the meantime, the estate agent will attempt not to enter into negotiation with another party. The interested party may use this time to gain a better understanding of his funding or the possibilities for use of the property.

An option cannot be demanded; the seller and seller’s estate agent themselves will decide as to whether they will offer certain commitments during a negotiation process.

The negotiations

The estate agent’s asking price for a property is extremely high. Is that allowed?

The seller determines the selling price of his property, in consultation with his estate agent. The buyer can negotiate the price, but the seller decides. This applies to all matters, the seller feels are important, regarding his decision as to whether he wishes to sell his property to this buyer. If the seller and buyer come to an agreement on all of these matters, the purchase will take place.

Sometimes a seller and buyer decide to negotiate less relevant matters, for instance moveable property, only after they have agreed on the key issues. In such a case, a judge could determine that if the parties are not able to come to an agreement on secondary issues, while they do agree on key issues indicated by themselves, they must continue their negotiations until a reasonable result has been achieved regarding secondary issues.

When am I negotiating?

You cannot force negotiating. You are negotiating only if the seller responds to your offer. In other words: if the seller makes a counter-offer. The seller’s estate agent may also explicitly indicate that he is negotiating with you. You are not in the process of negotiating if the seller’s estate agent specifies that he will discuss your offer with the seller.

Does the estate agent have the right to negotiate with more than one candidate at the same time?

The estate agent may negotiate with several candidates simultaneously. He must however inform all those involved.

Can the seller increase the asking price of a property during negotiations?

The answer is yes. If the asking price is merely an invitation to make an offer (as set out under “If I offer the asking price, is the seller obliged to sell the property to me?”), then the seller may also decide to reduce or increase the asking price.

During negotiations parties often make offers to one another. If the prospective buyer makes a counteroffer that deviates from the offer previously made by the selling party, this previous offer of the selling party will be withdrawn. So, also if the parties “meet one another” in the bidding process, the seller after all may suddenly decide to increase his counteroffer again and the buyer could decide to lower his offer again.

Does an estate agent have the right to change the system of the purchase during negotiations?

He does. One of the parties may end the negotiations. Sometimes there are so many interested candidates offering the asking price or come close to offering it, that it is hard to determine who will be the best buyer. In that case the seller’s estate agent may – obviously in consultation with the seller – decide to terminate ongoing negotiations and change the bidding procedure. Obviously, he first needs to respect the commitments made. Subsequently, the estate agent may opt for a registration procedure. All bidders will have an equal opportunity to make the highest bid.

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