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What’s in an Offer to Purchase?

Let’s check all the basic information included in an Offer to Purchase contract:

Both the Buyer and the Seller need to agree on what stays in the home and what goes with the previous owner.

Conditions of sale

Conditions of sale are terms inserted into the Offer to Purchase by both the Buyer and Seller. Commonly, these conditions of sale include: subject to finance and bond approval, subject to a sale of another property, and subject to the specialist inspection approvals.

An Offer to Purchase must include a condition that the sale is subject to a bond approval being obtained within a realistic amount of time. Once a home loan has been approved by your Bank, you should notify the Estate Agent to ensure that your offer becomes valid and this will enable the buying process to continue.

Property is normally sold voetstoots, meaning you buy the property with all defects and faults. However, a condition of sale can often include the repairing of faults by the Seller, should the Buyer wish to negotiate this in the Offer to Purchase

Fixtures or fittings

These are items found in and around the house that are included in the purchase price of the property. For example, items such as curtains, light fittings and mirrors are considered to fall into these categories. As a rule of thumb, all items which are fixed to a surface remain in the house, unless both the Buyer and Seller agree otherwise.

Occupation date

This is the date, agreed upon by both the Buyer and the Seller, when the house will be vacated by the Seller and the Buyer takes occupation. It is essential to clarify a date in order to make moving arrangements accordingly.

The Offer to Purchase needs to contain all the terms on which the parties agreed, such as date of occupation, occupational rent, fixtures and fittings and other conditions of sale

Occupational rent

If the buyer occupies the property before the date of offer stipulated on the contract, then the Seller is entitled to charge the Buyer occupational rent. Occupational rent applies in the same way if the Seller stays on after date of offer. The rental price can be agreed on by both parties with the help of an Agent.

Deposits

There is no legal stipulation that you must pay a deposit. However, this action of putting down a deposit can be seen as a sign of commitment by the Buyer. If there is a deposit, this needs to be stated on the Offer to Purchase with details such as the amount along with any other relevant information. Generally, it is a good idea to put down a deposit since the larger the amount you put down, the better your interest rate will be. This amount should be placed in a trust account until transfer of ownership is completed, with interest being for the benefit of the Buyer.

Purchase price and other small clauses

The most anticipated point of the Offer to Purchase is the purchase price. This is the price offered by the Buyer to purchase the house. The offer should have a time limit for the Seller to accept, reject, or make a counter-offer. Other items which are also important and should be included are: commissions made to Agents, offer expiry date and compliance certificate requirements.

How bonds work

Negotiate an Offer to Purchase