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Ready, Willing, and Able Buyer

DEFINITION

‘Ready, Willing, and Able’ is a legal term that implies that a prospective buyer is qualified to enter into a binding contract for the purchase of a property.

EXPLANATION

A Ready, Willing, and Able Buyer is a potential property purchaser who is both financially and legally able to enter into a binding contract to purchase a property. A broker’s commission is dependent on his or her ability to procure a buyer who is ‘ready, willing, and able’ to execute an unconditional contract on terms specified by the property owner. The broker must use unequivocally clear language in identiying a purchaser if they desire to receive their full commission. If an agent has provided the seller with such a prospective buyer, and the seller decides to withdraw the property from the market, the broker is still entitled to his or her commission.

Laws

In some cases, a buyer is not considered ‘ready willing and able’ until a binding contract is actually signed, or the sale is completed. ‘Ready and willing’ means that the buyer is ready to enter into the contract under terms set by the seller, and that his or her position will not be impeded by an external factor.

A buyer can only be ‘ready’ after the terms of the sale are agreed upon. ‘Willing’ means that the buyer should be ready sign and execute the agreement on the terms. The words ‘ready and willing’ imply a capacity to act, and a buyer cannot be ‘willing to purchase if he or she isn’t able to complete the purchase or at the least be willing to execute an unconditional and binding contract.

‘Abiity’ to purchase depends primarily on the financial ability to complete the purchase, although this doesn’t necessarily mean that the money must be immediately in place at the bank. The purchaser must be able to demonstrate current financial means, or the funds must come through from another property in time to consummate the transaction in order to be considered ‘able to purchase.’

If a broker uses the term ‘ready, willing and able,’ he or she must explain the legal meaning of those words to his client.

Process

In English law, a person must have the proper financial resources at the proper time to complete the purchase, as well as being prepared by having cash or a banker’s draft ready for handover.

If two brokers are assigned the same property, either may produce an appropriate buyer and both may be entitled to a commission. This depends on who is the procuring cause, or effective cause, of the completed sale. To avoid the need of having to pay two commissions, a seller shouldn’t instruct more than one agent without first explicitly making the commission payable to the person that procures the completed sale.

If for some reason the seller isn’t able to profile a good title and the estate agent is aware, then the agent has acted in bad faith and is no longer entitled to commission.

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