Signing an Offer to Purchase
Category Advice
However excited you may be to sign on the dotted line, there are some things you need to know before signing an offer to purchase in South Africa.
Our conveyancing attorneys know that finding your dream home may feel like a once in a lifetime opportunity, but it's important to maintain a level head before diving into the deep end.
What to Know Before Signing an Offer to Purchase?
The first and foremost thing to understand is that signing an offer to purchase is legally binding and once you make an offer, it cannot easily be changed.
What comes next is what the seller chooses to do; accept your offer, decline it, let it lapse by not responding at all or, present a counteroffer before sending it back to you.
The ball is now in your court and you have the opportunity to do one of the same mentioned above.
However, should your initial offer be accepted, and you have a sudden change of heart, you will not be able to change it without the seller agreeing to such changes.
So, before signing an offer to purchase, we advise that you consider the following three steps to ensure you don't end up agreeing to something you are not 100% sure of:
Check Your Finances
A real estate agent can help you prepare a reasonable offer to purchase based on the following:
- What comparable properties in the area have sold for
- Taking into consideration the home's location, condition
- Any extras included in the property
Before making an offer, make sure to obtain a bond pre-approval for the price range that you have in mind for the offer.
Furthermore, be sure to have the necessary funds set aside and ready for your deposit, transfer costs, and bond registration costs.
Understanding Before Undersigning
It's important to understand what you are agreeing to before you sign. We advise that you pay special attention to the section of the agreement that refers to permanent and non-permanent fixtures.
In other words, do not assume that any fixtures, whether permanent or not, will automatically be included in the sale.
If you are not sure how to translate legal jargon within your sale agreement, our conveyancing attorneys in Cape Town and Johannesburg can assist you.
The Power of Ask
Although the seller is under a legal obligation to disclose any known faults or defects of the property, there are some defects that can be undiscoverable and therefore unknown to the seller.
For this reason, it's strongly advised that you seek the help of an experienced home inspector to conduct a thorough inspection of the property.
That being said, there are certain limitations to an inspection that may prevent some defects from being discovered or identified.
Furthermore, if there was a defect which could have been discovered during an inspection, but you chose not to carry out an inspection, repair of such a defect will be your responsibility.
The Basics of an Offer to Purchase Contract
Offer to Purchase Conditions
There is a 72-hour clause in real estate that entitles the seller to the following:
- They are permitted to carry on marketing the property even after accepting your offer to purchase
- Should they receive a more appealing offer, they may provide you with a written notice informing you that you must waive the suspensive conditions and proceed with the offer to purchase within 72 hours. If you fail to waive these conditions within the 72-hour period, your offer to purchase will be null and void, consequently freeing the seller to sign an agreement with the new buyer
This clause was introduced because fulfilling suspensive conditions may be a lengthy process. Suspensive conditions can include the sale of your current home or obtaining the necessary funding to proceed with the purchase.
Sellers may become impatient while waiting for these conditions to be fulfilled and may miss out on an opportunity to accept a better offer.
Always be aware that this 72-hour clause was designed to protect the seller, not the buyer. For this reason, it's important that you proceed swiftly with fulfilling these conditions and are aware of them before signing an offer to purchase.
Author: Cor Van Deventer