An offer to purchase is not simply a document recording the price a buyer is willing to pay. Once accepted and properly concluded, it can become a legally binding agreement with significant consequences for both parties.
According to Antonie Goosen, Principal and Founder of Meridian Realty, this is why agents have a responsibility to ensure that an offer is properly completed, clearly understood and accurately presented.
“The first thing to check is that the buyers and sellers are correctly identified, the property description is accurate and the purchase price and payment arrangements are clearly stated. Next, examine the conditions attached to the offer. Is it subject to bond approval? Does the buyer need to sell another property first? Are the timelines realistic? Who is responsible for obtaining the necessary certificates, and what happens if a condition is not fulfilled?," he says.
Goosen says agents should also establish whether the buyer has a realistic prospect of obtaining finance. An attractive offer means very little if the purchaser cannot ultimately fund the transaction.
“Occupation dates, occupational rent, fixtures and fittings, deposit arrangements and any special conditions must be carefully considered. The required property disclosure documentation also needs to be properly dealt with. One of the most dangerous mistakes is rushing a seller into accepting the highest offer without examining the conditions attached to it," he says.
He explains that a slightly lower offer from a financially qualified buyer with fewer conditions may ultimately be more attractive than a higher offer carrying significant uncertainty. Agents should explain these differences objectively, ensure that the seller understands the implications and recommend specialist legal advice where necessary.
He adds: "Our responsibility is not simply to secure an offer. It is to help sellers make informed decisions and give the transaction the best possible chance of reaching a successful conclusion.”
Morné Prinsloo, local agent with REMAX Town and Country Roodepoort and Krugersdorp, says an offer to purchase should never be presented based on the purchase price alone.
"I check the buyer’s details, purchase price, deposit arrangements, bond finance conditions, deadlines, occupation date and any conditions relating to the sale of another property. I also establish whether the buyer has obtained pre-approval or has credible evidence of affordability. Any unusual conditions must be explained clearly to the seller, including their potential financial and legal consequences," he says.
Prinsloo says a higher offer is not always the stronger offer. The likelihood of a successful transfer is just as important as the amount offered.
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