PROPERTY NEWS - 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 follow a few simple guidelines, there is very little to worry about."

He says 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 the 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."

Detail
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," says Goslett.
"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.

Suspensive condition
"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," warns Goslett.

Date of occupation
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."

Goslett says 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.

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