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Property Reservation Agreement

The Reservation Agreement is a type of agreement that is focusing on conditions and terms on the payment of reservation fee. If you have found your dream home, it will be your first step in order to buy it. At this stage the buyer does not sign Contract to Sell and he agrees, that in the even that the buyer does not wish to buy this property anymore the reservation fee will be forfeited. There is no legal basis for fortfeiture and there is no chance to demand a refund withount this agreement.

The Reservation Agreement is an important stage that lead to the Contract to Sell. It usually requires a small amount of money, between 2% and 5% of the total property cost and it shows your interest to purchase particular property. Such an agreement also means that this property will be put on hold, untill the Contract to Sell will be signed.

After the Reservation Agreement is signed, purchaser will have time to ensure that this property is suitable for him, that he has finance to buy it and that the procedure is legal.

Vendor may charge reasonable costs if the Buyer cancels Reservation Agreement, due to the fact that he had some expences, such as preparing legal documents.

Although the Vendor should inform the Buyer regarding the costs that may incure. Additionally, the Vendor may not enter into a Reservation Agreement with every Buyer, and may pre-qualify potential Buyer, whether he is in position to buy property or not. Although he should not discriminate any groups of religion and race.

It is impossible to predict deductions from reservation fee, as every Vendor has their own system and expences.

The Reservation Agreement cannot be cancelled by the Vendor. It may be cancelled only by Buyer or due to the expiration date.

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