Tips for submitting an offer to purchase

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 buyers, submitting an offer is the most daunting part of the sales process,” says Adrian Goslett, regional director and chief executive of RE/MAX of Southern Africa, “but if they following a few simple guidelines, there is very little to worry about.”

He says 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 both the buyer and seller must agree to all the terms and conditions in the document. To avoid confusion or conflict in the future, everything that is agreed to by the parties must be put down in writing in the agreement. Once signed by both the buyer and seller, the document becomes a legally binding contract,” Goslett explains.

“The OTP protects both parties in the agreement and ensures that there is no ambiguity. Misunderstandings can result in conflict, which could jeopardise the sales process. You need to 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,” 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 both parties. There is also less chance of either party reneging on the agreed terms at a later stage, says Goslett.

“The parties need to agree which 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 not unusual for certain items of furniture or curtains specifically made for 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.”

He says it’s common for buyers to submit an offer on a property while they are still in the process of selling their existing home. In the offer, they will include a condition stating they have submitted the offer subject to the sale of their other home.

This is known as a suspensive condition, and will normally specify 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 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,” says 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 needs clarification, 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.