Understanding the basics of the offer to purchase

Whether you are the buyer or the seller of a property, it is important to understand the different elements of the offer to purchase contract. If structured correctly, including all the basic conditions of the sale, it will protect both parties and ensure a smooth homebuying and home selling journey.

What are the conditions of sale?

The conditions of sale are terms that you include in an offer to purchase. Both the buyer and seller must approve the conditions of sale before signing the contract. These terms are usually different “subject to sale” clauses such as:

The “voetstoots” clause and defects

Property is normally sold voetstoots. This means that the buyer buys the property with all its defects and faults – or “accepting it as it is”. That’s why it is important for the buyer to get a professional to inspect the home before signing the offer to purchase.

There are two kinds of defects: patent defects (defects that can be seen like a broken window or a leak) and latent defects (defects that can’t be picked up in a superficial inspection). As the buyer, you don’t have recourse on patent defects after the sale has gone through. However, if you can prove that the seller was aware of latent defects without declaring them – you could have recourse. Just remember that these legal battles are expensive and emotionally draining. Rather pay for an inspection and you’ll avoid nasty surprises and lengthy legal battles.

The purchase price

This is probably the most important inclusion in the offer to purchase. It is the price that the buyer is willing to pay for the property. The seller has a certain amount of time – an expiry date – to accept or decline the offer. Alternatively, the seller can make a counteroffer. Remember to also include the estate agent’s commission.

The occupation date: move in day

It is important for the buyer and the seller to settle on a date that the seller will move out. Additionally, when the property will be ready for the buyer to move in. Both parties need to make arrangements for the big move, making this an essential clause in every offer to purchase.

Occupational rent

There are circumstances when the buyer may vacate the property before the registration of the bond has gone through. In these scenarios the buyer and seller need to agree on an amount for occupational rent. This is if the buyer wants to move in before registration. The estate agent can assist with putting a fair rental amount together to ensure it works for both parties.

Deposits

It is not a legal requirement to put down a deposit, but it does show the seller that you are a serious buyer. It also helps you decrease the amount of interest you pay over the loan term. If you are putting a deposit down, you must include this amount in the offer to purchase. The deposit is transferred to and kept in the conveyancing attorneys trust account until the transfer of ownership is successful. The interest earned on this amount belongs to you, as the buyer. 

Fittings and fixtures

Fixtures are generally defined as any items that are fixed to a surface. These must, according to law, remain in the house unless stated otherwise in the offer to purchase. For example, shelving or blinds. Fittings, on the other hand, are things like curtains or light fittings like chandeliers. As the buyer, if you want to include any of the fittings in the sale, you must include this in the offer to purchase.

The offer to purchase is an important document that all parties must review with care. If you have a good estate agent, they will also point out any irregularities and help you include all the conditions of sale clauses you require. Buying a home is an important step, a step worth taking, but with all your wits about you.