select
|

Home buying advice - tips for submitting an offer to purchase

Searching for and finding the ideal property, is only part of the journey to becoming a homeowner. Once you have decided on the property you want, the next step is to sign the documentation and submit an Offer to Purchase (OTP). “For some, submitting an offer is the most daunting part of the sales process,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “but if they following a few simple guidelines, there is very little to worry about.”

He adds that in essence, an OTP is an agreement that outlines the terms and conditions of the property transaction between the buyer and seller. “Before the contract can be signed, it is important that both the buyer and seller agree to all the terms and conditions in the document. To avoid confusion or conflict in the future, it is vital that everything that is agreed to by the parties is put down in writing in the agreement. Once signed by both the buyer and seller, the document becomes a legally binding contract,” Goslett explains.

Why is the OTP such a vital document? Simply put, it is imperative because it protects both parties in the agreement and ensures that there is no ambiguity. Misunderstandings can result in conflict, which could jeopardise the sales process. “Ensure that the document completely covers all aspects agreed upon, such as the date of occupation, occupational rent, fixtures and fittings and the conditions of sale. Once concluded and signed by each party, the OTP will become the deed of sale on the property,” says Goslett.

While it might be a tedious exercise, the OTP should be as detailed and specific as possible. “Essentially more detail means more protection for the parties involved. There is also less chance of either party negating on the agreed upon terms at a later stage,” says Goslett. “It is not unusual for certain items of furniture or curtains specifically made for a uniquely shaped room in the home to be sold with the property. In a situation like this, it makes sense to list the items in the agreement. If the item is not listed, there is no obligation for the seller to leave it - this is where the details in the document become important.”

The parties need to agree regarding what items are included in the sale of the property and what aren’t. As a general rule of thumb, any fixtures or fittings that have been attached to the property (nailed, bolted, glued or screwed down) will stay.
“It is common for buyers to submit an offer on a property while they are still in the process of selling their current residence. In the offer, they will include a condition which states they have submitted the offer subject to the sale of their other home, this is known as a suspensive condition,” says Goslett.

A suspensive condition will normally include a time limit that will depend on the agreement made between the buyer and seller. Once the suspensive condition is fulfilled, the buyer should notify the real estate agent without delay so that the offer can be made unconditional. “If the suspensive condition is not met or the seller is not notified the agreement can become null and void, and the whole transaction could fall through,” advises Goslett.

A vital inclusion in the agreement is the date of occupation, which stipulates the date on which the seller will vacate the property, and the buyer will take occupation. This provides both parties with a clear date to work towards regarding moving. It will also determine whether either party may need to pay occupational rent. The rental amount should be market-related and can be agreed on by both parties with the help of an agent. The occupational rent amount should be included in the agreement.

“Because the OTP is contractually binding once signed by both parties, it is important that each party is fully content before they put pen to paper. Buyers and sellers should go through the document thoroughly, and if there is any clause that they need clarification on, they should ask their agent for an explanation or obtain a professional opinion from a lawyer.”
In closing, Goslett says that the OTP is a crucial aspect of a property transaction, and if used correctly, it will make the process of buying a home as easy and transparent as possible, reducing the risk of conflict.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK