Real Estate Tips #5: What does 3+1 mean in a property transaction?

3 + 1 simply means that in any property transactions, the vendor (owner) will usually give the purchaser a time frame of 3 months (free of interests) plus 1 month (with interests) in order to complete the whole conveyancing (property transfer) process.

In other words, should the purchaser's took more then 3 months to pay the vendor the full settlement sum, the purchase can be charged interests on the amount owning, based on an agreed rate, normally between 8%pa to 10%pa.

What if the case drag on to longer than 4 months? In most instances, the purchaser can request for extension, bearing similar interests, this is however not automatic, and it is really depends on the decision of the vendor whether or not to accept your request. This is also why sometime, we also see 3 + 2, or even 4+ 1 which came into existence. But this 3+2 or 4+1 is normally pre-agreed upon signing the Sale and Purchase Agreement.

Therefore, always do a regular check on your solicitors (probably once or twice in a month) to find out the progress of the transfer process, so as to avoid your 10% deposit being forfeited by the vendor as a result of non-compliance of time frame given.