Question: When is the best time to start on due diligence?

Answer: When the Seller is happy with your Offer, proceed to due diligence. If your findings are not satisfactory, you can withdraw your offer at anytime before you sign the Sale Agreement.

5.Due Diligence

As the Buyer – While reviewing or after signing the Letter of Offer, it is now time to conduct your due diligence. As the offer validity period is usually for about 14 days, it is now time to work with your Advocate to conduct the necessary title searches and review the draft Sale Agreement which the Seller’s Advocate will send to the Buyer’s Advocate.

• Obtain an official search on the title at the Lands offices.

• For land, engage a licensed surveyor to ascertain the land size and boundaries indicated on the deed plan, and that these details match what is on the ground.

In law, all registered land is subject to certain overriding interests which may subsist without their being noted on the register. This may include but are not limited to; spousal rights over matrimonial property, trusts, rights of way, rights of water, etc. Due diligence will also need to be done in this regard.

As the Seller – The documents ordinarily required from the Buyer as part of the Seller’s due diligence would, amongst others, include copies of their Personal Identification Documents (ID/Passport copies) and PIN Certificate.

In the event of a Company purchase, the Certificate of Incorporation and PIN Certificate would form part of the ID documents, together with Directors’ ID and PIN.

For some cash transactions, proof of funds may form part of the Seller’s due diligence, so obtain your certified Bank statements ahead of time.

6.Review the Draft Sale Agreement

Think of the Sale Agreement as the firing gun before one of Usain Bolt’s famous races. It kicks off the transaction in a loud way; one in which the world sits up and takes notice. It is a show of commitment; a demonstration that both parties are running this race forwards.

The Seller aims for a full payment. The Buyer aims for the property, duly transferred to their name. The race well run, leads to two victors. Not one. You both win!

The draft Sale Agreement is prepared by the Seller’s Advocate in line with what you agreed in the Letter of Offer. Please read it. It is drafted in English. Any questions you have ought to be answered by your Advocate. Do not accept legalese. Have it explained in simple English, in a way you can indeed what it means.

If you need an independent party to review your contract, kindly reach out and we will do our best to give you feedback within a reasonable time.

7.Sign the Sale Agreement

Now that your due diligence and review of the draft contract is complete, it is time to sign the Sale Agreement. The deposit ought to be paid upon execution of the Sale Agreement. If you had made an initial partial deposit payment, now is the time to top-up to the deposit figure stated in the Sale Agreement.

The Sale Agreement should largely reflect the terms in the Letter of Offer. Take a moment to confirm the transaction period – is it 90 days? Does that still work for you?

Payment terms are agreed between the Buyer and the Seller and the Sale Agreement simply confirms this in a way that provides clarity to all parties, whether they remain cordial or not.

Part 5. Where most Buyers go wrong. Beware! >>