1. What are the usual steps for signing the formal sale and purchase agreement and paying the further deposit?
Step 1 . The vendor and the purchaser each appoint an independent solicitor to represent them.
Step 2 . The vendor's solicitor prepares the draft formal agreement . The vendor can include any special conditions he/she wants as long as the conditions do not violate any relevant ordinances or contradict the terms of the provisional sale and purchase agreement. On the other hand, the purchaser can also propose special conditions. Both parties must fully agree to all these conditions before signing.
Step 3 . The vendor's solicitor explains the terms and conditions contained in the formal agreement to the vendor, who signs the agreement and its counterpart accordingly. Then, the 2 sets of agreements will be sent to the purchaser's solicitor.
Step 4 . The purchaser's solicitor then explains the terms and conditions of the formal agreement to the purchaser, who signs the agreement and its counterpart. Upon signing the formal agreement, the purchaser should also pay the further deposit either by a bank cashier's order (bank draft) or a cheque issued by a law firm. Usually the further deposit together with the initial deposit would be 10% of the purchase price.
Step 5 . The purchaser's solicitor will arrange to deliver one set of the signed agreements together with the further deposit cheque to the vendor's solicitor.
Step 6 . The purchaser should consider buying insurance against any accidents (e.g. fire) which may result in loss or deterioration in the value of the flat after signing the provisional agreement or the formal agreement. The purchaser takes up the risk of the flat (e.g. any accident causing damage) once the provisional agreement or the formal agreement is signed .
Step 7 . The vendor gives the title deeds (documents showing who owns the flat) to his/her solicitor, who will pass them onto the purchaser's solicitor for inspection. If the title deeds are kept by the mortgagee (usually a bank), the vendor's solicitor will arrange for the release of title deeds from the bank to the purchaser's solicitor.
Step 8 . The purchaser's solicitor examines the title deeds, and asks the vendor's solicitor questions (legally called "requisitions") if he finds anything questionable. The vendor's solicitor must reply if the questions are reasonable. The purchaser's solicitor will let the client know if he/she is not satisfied with the answer(s).
Step 9 . The vendor prepares to deliver vacant possession (give a vacant flat) to the purchaser when the sale is completed later, unless this is not required in the formal agreement as, for example, the flat is sold subject to a tenant who is occupying the flat.