You agree to generally purchase with a penalty for non-compliance, a property that you have not examined and verified in detail. You agree to buy a property on different terms, which means you will have to buy the property, even if it has defects or if your bank will not approve your mortgage. In other words, you agree to enter into a sales contract with an unknown wording. You also agree to pay a booking fee or down payment, the amount of which is generally the same as the contractual penalty imposed if you have changed your mind and have not purchased the property for any reason. The booking contract also provides for the obligation for the real estate agency not to offer such real estate to other people. “Is it then that a seller accepted a buyer`s offer, or only to the point just before the contracts were exchanged? This issue alone could have a big impact on the effectiveness of booking fees,” says Tennant. Tennant warns that another problematic area involves defining precisely when a sale has been agreed – and thus the entry point into force of the booking agreement. Since booking fees can be significant (up to $20,000 at the top of the market), the buyer`s agreement should be reviewed by a legal expert before signing. In practice, however, it is typical for buyers to sign booking agreements before calling their lawyer. What does that mean? You don`t have time to think about your purchase. It is not the result of the contract that you may change your mind about buying the property. You should always know the condition of the property BEFORE signing a contract. This is generally not true; The contract does not involve anything like this – this option is only offered by the most decent real estate agencies.
The real estate agency cannot promise you that such a property will not be sold by another real estate agency or by the seller himself to another buyer. They are guaranteed only if the seller commits himself or if the real estate agency and the seller enter into the exclusive contract. The booking contract is usually a bilateral agreement between and between the real estate agency and a person interested in buying a property. It can be mentioned under different names – booking contract, deposit contract, booking contract – but it is still a contract whose essential elements are not defined by law and it can therefore define the rights and obligations according to the will of its participants.