The basics of an Offer to Purchase contract | Legal Articles

 

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The basics of an Offer to Purchase contract

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

Offer to Purchase - Conditions of Sale

The conditions of sale are the terms in the Offer to Purchase. 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 then should notify the Estate Agent to ensure that your offer becomes valid and this will enable the buying process to continue.

Voetstoots

Property is normally sold as is 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 & Fittings

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

The fixtures and fittings are the items found in and around the house which are included in the purchase price of the property. For example, items such as curtains, light fittings and mirrors are included in this.

As a general rule, these items which are fixed to a surface remain in the house, unless both the Buyer and Seller agree otherwise.

Occupation Date & Rental

The occupation date is generally agreed upon by both the Buyer and the Seller, and is when the house will be vacated by the Seller and the Buyer takes occupation. It is essential to clarify a date so that moving arrangements can be made.

If the buyer occupies the property before the specified date, then the seller is entitled to charge the buyer occupational rent. This rent also applies if the seller stays on after the date of the offer. The rental price is often agreed on by both parties with the help of an Agent.

Deposit

There is no legal requirement for the deposit to be put down. However, making 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.

It is a good idea to put down a deposit because 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

The purchase price is generally the most anticipated point of the Offer to Purchase. 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.

Van Deventer & Van Deventer Incorporated - Conveyancing attorneys Sandton

Van Deventer & Van Deventer Incorporated seek to provide Offer to Purchase agreements that protect the seller and are fair to the buyer.

Contact us for Offer to Purchase contracts

 

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