I want to purchase a second-hand property

Enter into provisional sale and purchase agreement

Usually, purchaser and vendor first sign a provisional agreement for sale and purchase (“PASP”) before signing a formal one. In the sale and purchase of second-hand properties, there is no statutory or standard format for the PASP; it is generally provided by the estate agents. Although the terms of a PASP are relatively simple, they are legally binding. Therefore, purchaser and vendor should read carefully every clause of the PASP and take note of the fees payable. Also, one should ask the estate agent to clearly explain the same to them. One should not sign the PASP if any information has yet to be filled in. Any additional conditions such as any “must buy, must sell” clause, clauses relating to the sale of the property with unauthorised building works and the related demolition responsibilities should be clearly stated.

The purchaser should not sign the PASP before a consensus is reached with the owner in respect of the transaction terms and conditions. If either party wishes to change any terms in the PASP, the estate agent may only revise the PASP with the consent of the other party. Any revised terms and conditions should be endorsed and initialed by both parties.

Where possible, the estate agent should arrange the signing of the PASP by both parties at the same time, in order to avoid any sudden changes of mind or any changes of the property price from the originally agreed price.

Before signing a PASP, the purchaser should ensure the estate agent provides the latest information on the title. If there is any doubt about the owner’s ability to repay the loan for the redemption of the property, you should seek legal advice on whether to make it a requirement that deposits be paid to solicitors as stakeholders, and for how long, lest the vendor misappropriates them when he/she is unable to complete the transaction.

In addition, with effect from February 2026, if purchasers obtain a mortgage for the purchase of second-hand properties, the transfer of money may make use of the Payment Arrangements for Property Transactions (“PAPT”). For further details, please refer to here.

The PASP is a valid and legally binding contract and you should seek legal advice before signing one. Generally speaking, both the vendor and purchaser have to engage their own legal representatives. However, they may engage the same solicitor if they are associated parties; or if the purchase price does not exceed $1 million and there will be no conflict of interest arising from joint representation. Nevertheless, in all cases, it is always advisable for the vendor and purchaser to instruct their own solicitors to protect their interests and to avoid conflicts of interest arising from joint representation.

Conveyancing fees charged by solicitors vary. You should compare the price and services provided by different solicitors before making a decision.

Moreover, purchasers should note that the PASP should specify the date of completion of the sale and purchase of the property and whether vacant possession of the property shall be delivered on completion. Purchasers should exercise due care in selecting the date of completion and should ensure that, by such date, all financial arrangements have been duly completed and any outstanding title issues have been resolved by then. 

Generally speaking, the terms of a PASP typically include the following:

• Identity of the vendor and purchaser
• Description of the property
• Purchase price
• Deposit and method of payment of the purchase price
• Estate agent’s commission
• Rights and obligations of both parties in the event of breaching the agreement
• Right of the purchaser’s mortgagee to inspect the property prior to completion for valuation purpose
• Right of the purchaser to inspect the property prior to completion
• Vacant possession
• Other special terms, such as arrangement for deposit stakeholding and the use of PAPT, or inclusion of specified furniture and appliances in the purchase price