Soliciting Sales & Purchase Agreement
After the loan has been approved, the next step for Mr & Mrs Tan is the Sales & Purchase Agreement (SPA). It is a legal document outlining the terms and conditions whereby Mr Chan (vendor) has agreed to sell the property to Mr & Mrs Tan (purchasers), and the purchasers agreeing to purchase the property from the vendor.
The standard practice is for the purchaser’s solicitor to draft the SPA. Therefore, Mr & Mrs Tan have to solicit for a solicitor. There are 2 types of solicitors:
The solicitor skilled and specialised in SPA is a conveyancing solicitor. They are knowledgeable in the jargons and legal procedures pertaining to legal matters in this area.
Mr & Mrs Tan do not know any solicitor or conveyancing solicitor for that matter. I, a real estate agent, not only have a network of bankers but also a network of solicitors. I recommended to them a solicitor who was very friendly, professional, and helpful. The solicitor also has had many years of practice in the industry.
Mr & Mrs Tan have a solicitor to represent them. Mr Chan, the vendor, also have a solicitor to represent him. Then, the purchaser’s and vendor’s solicitors’ contacts were exchanged.
The SPA still have to be finalised and signed within the 14 working days period as agreed. The purchaser’s solicitor drafted the SPA and sent to the vendor’s solicitor for revision. The vendor’s solicitor revised the draft SPA, made a few comments on it, and sent it back to the purchaser’s solicitor for a revision. This process goes back and forth for a few times until both solicitors and their clients can agree on the terms and conditions in the SPA.
In order for this part of the transaction to sail smoothly, both solicitors must be able to understand each other and work well together. They’ve to understand each other’s jargons and reasonings. Even though one is a red apple and the other is a green apple; both are still apples. If one is an orange and the other is an apple, the transaction can be delayed. Furthermore, if there is a long (public) holiday season or the solicitor has gone on a break during the 14 working days period; the transaction can be further delayed.
I had to follow-up constantly with both solicitors and their clients on the status of the SPA. Thereby making sure that everything was progressing smoothly and everybody was at least on the same page.
If there had to be a delay, both parties and their solicitors must mutually agree on an extension. The SPA can be finalised after the 14 working days period.
Thankfully, the SPA was finalised a few days earlier than the maximum agreed 14 working days period. Mr & Mrs Tan signed the SPA at their solicitor’s firm. Then the SPA was sent to the vendor’s solicitor. Mr Chan too then signed the SPA at his solicitor’s firm. Alternatively, both parties could have also agree to sign the SPA at a mutually agreed location.
Then, Mr & Mrs Tan made arrangements with their banker to sign the Loan Agreement (LA). Even though both LA and SPA can be signed at the same time or whichever comes first. It is best that the SPA is signed first before the LA. You, as a purchaser, need to be assured that the property has been successfully and legally transferred to you first.