Bread & Butter Properties

Bread & Butter Properties
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Friday, October 1, 2010

It pays to check before you commit

Recently I was reminded of the importance of doing due diligence (check!) before you commit to a purchase. My friend sent me an article about the perils of not checking before signing the sales and purchase agreement (S&P); if the seller is a bankrupt, you, as the buyer may lose the down payment unless the bankrupt is solvent. Basically if you sign the S&P and have paid the 10% down payment, and then discover this – you are out of luck. You will have to wait your turn, together with all the unsecured lenders to get your money back. In the meantime, the deal is stuck as the seller as a bankrupt does not have any legal standing to consummate the deal in any case.

This brings me to the next point: hire a descent lawyer who knows what he/she is doing. This is one area you don’t want to be stingy on; don’t hire your friend unless he is well verse with conveyance matters. It can save you a lot of money (for example, if it stops you from making a mistake like signing with a bankrupt) and not to mention, a lot of pain, in the long run. Always do your bankruptcy check; and all good lawyers will advise you to do this before they proceed further.

There are all sorts of scams and tricksters out there nowadays. It pays to do your check; and as the saying goes: if it (a deal) is too good to be true, it probably is.

“Bankrupt Seller”, T10, The Star, 14 Sept, 2010

copyright Chris Gan@2010,

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