Here are 3 suggestions for Sellers when negotiating an offer to purchase your home or other property.
1. Buyer Wants to Assign and be Released
You may receive an offer that states that the buyer named can assign the agreement “to any person, persons or corporation, either existing or to be incorporated” and the buyer named in the offer “shall stand released from all further liability....”
Don’t accept this clause as written, releasing the named buyer. In Ontario, the buyer has the right to assign the offer. The buyer, however, cannot assign their obligation to the contract. In other words, if the assigned buyer not close on the transaction, the buyer named in the offer remains liable. So you want liability to remain with the buyer who negotiated the offer with you.
Alternatively, you can agree that the buyer will not assign the Buyer’s rights without “your express written consent” as the seller, and “such consent may be granted at the seller’s sole option.” You at least have some control over who takes over the agreement to close.
2. Warranting Working Order of Chattels
Are you leaving any chattels with the sale of your home? You know: a stove, refrigerator or anything not attached to the home. If so, the offer you receive may state that the seller represents and warrants that the chattels are in good working order and such warranty shall extend beyond closing.
Don’t accept this clause. Chattels, especially those with working parts can break. One day they work and the next day they don’t, and it doesn’t matter if they are newer or older. People misunderstand the warranty clause and expect the seller to make good after closing if there’s a breakdown.
Alternatively, you might change the clause to say that the seller does not warrant the condition of any chattels remaining with the property.
The typical clause reads as follows: “The Buyer acknowledges that there is no express or implied warranty by the Seller on the chattels included in this Agreement of Purchase and Sale.”
3. Final Buyer Inspections
Most offers include a clause stating that “The Buyer shall have the right to inspect the property one further time prior to completion....” The clause is valid as the Buyer wants to ensure that what they saw prior to making the offer hasn’t changed, that nothing has broken or is missing.
Don’t allow other third parties to enter as part of this final walk-through unless you know why and you have given your consent. The sale at this point is firm and binding. A buyer shouldn’t be allowed to bring in an appraiser or a home inspector under this clause, as these inspections should be addressed as buyer conditions in the offer.
Alternatively, if the buyer wants other third parties to view the property, they should insert a clause that partially reads as follow: “The Buyer shall have the right to inspect the property prior to completion for the purpose of inspection for (e.g. financing, insurance, estimate(s) from contractor(s) etc.) to a maximum of ___time(s).” NOTE: remove financing example if the offer is cash or the mortgage condition is removed.
We will cover other cautions to address in future articles.