Buying or selling property is one of the biggest financial decisions most people will ever make. Yet, many enter the process with little understanding of the legal backbone that supports the deal: the sale agreement and the purchase price. These are not just formalities — they are legally binding elements that determine whether your property transaction will run smoothly or unravel with costly disputes.

What is a Sale Agreement?

A sale agreement is a written contract between the buyer and the seller, setting out the terms and conditions of the property transfer. It is more than a handshake — once signed, it is binding in law. It includes key details such as:

• The identities of the buyer and seller.
• The property description.
• The agreed purchase price.
• Timeframes for payment and occupation.
• Any special conditions (e.g., subject to bond approval).

Interestingly, South African law requires sale agreements relating to property to be in writing to be valid — oral agreements hold no weight in property sales. This is why consulting an attorney at this stage is so important.

Why the Purchase Price Matters

The purchase price is not simply the “sticker price” of the property. It also has implications for:

• Financing: Whether the buyer will pay cash, apply for a bond, or combine both.
• Transfer Duty: Calculated based on the purchase price, this is a tax payable to SARS.
• Deposit Requirements: Often specified in the agreement as a sign of the buyer’s commitment.

An often-overlooked detail is that the purchase price must be clearly defined — for example, whether it includes movable items such as appliances or whether these are sold separately. Failure to clarify this can lead to disputes at transfer.

Common Pitfalls

Many buyers sign standard sale agreements without fully understanding them. Some hidden risks include:

• Clauses allowing sellers to cancel the deal if deadlines aren’t met.
• Vague descriptions of the property.
• Missing compliance requirements (such as electrical certificates).

These issues often only surface when the transfer is delayed or financing falls through.

The Attorney’s Role

Attorneys not only draft and review the agreement but also ensure that the purchase price and terms comply with the law. For example, if the purchase price is incorrectly structured, SARS may impose penalties on transfer duty or reject the application entirely.

Final Word

The sale agreement and purchase price are the foundation of every property transaction. Treat them with the care they deserve — get professional guidance early, and you’ll save yourself delays, disputes and hidden costs.

For expert assistance with sale agreements and property transfers, contact NS Xulu Inc. today — where integrity and professionalism guide every transaction.

By: Nompumelelo Xulu
Managing Director