Offers to purchase are for keeps, so take your time
Category RealADVICE
Homebuyers should never allow themselves to be pressured into signing an offer to purchase until they are certain that they want to buy a particular property - no matter how much they would like to qualify for a loan before interest rates go up any further.
That's the advice of Gerhard Kotzé, MD of the RealNet estate agency group, who says it is also vital that buyers - and especially first-time buyers - read every clause in a sale agreement and make sure that they understand them all.
"Buyers should never sign an offer just because an agent or a seller tells them they need to make a quick decision or risk losing the property to a competing buyer, for example. A reputable property professional will not engage in that type of high-pressure selling."
Similarly, he says, buyers should be wary of any agent that won't take the time to go through a sales agreement with them before they sign, or is unable to fully explain anything that is unclear.
"And this advice applies especially to first-time buyers who, it appears, are quite often also told that they needn't worry if they change their minds after signing an offer because they can always use the 'cooling-off clause' to easily withdraw from the sale.
"The truth is that the 'cooling off clause' which is a provision of the Alienation of Land Act only refers to residential stands or homes that are sold for less than R250 000, and only gives the buyer five working days after signing an offer to notify the seller, in writing, that it is withdrawn.
"Meanwhile, the five-day 'cooling off period' which is written into the Consumer Protection Act (Section 16) only applies if the purchase of the property was made as a result of direct marketing. What is more, it only starts after the property has already been transferred to the buyer, not after signature of the offer to purchase."
Kotzé says buyers should also be aware that it is a requirement of the Property Practitioners' Code of Conduct for an agent to point out and explain all the material clauses of any offer to purchase, to the buyer and the seller.
These include those clauses dealing with:
- The purchase price of the property and its method of payment;
- The occupation date and any occupational interest payable;
- Any specific contractual obligations of the seller or buyer such as the procurement of any electrical, plumbing, gas or beetle certificates that may be required;
- Any suspensive conditions of sale such as the buyer's ability to secure a home loan or need to first sell another property;
- The amount of sales commission being charged and when it is payable;
- The condition of the property and whether it is being sold "voetstoots" or with certain guarantees;
- The date when risk in the property will pass to the buyer so that it will remain fully insured; and
- Any special conditions added to the agreement by either party.
"In addition, given the large number of inexperienced buyers in South Africa, reputable agents accept that they often have to do more than just what is required by law to assist and protect those buyers, especially when it comes to offers to purchase.
"And we believe that those agents who do not have this attitude should be avoided by both buyers and sellers - no matter how appealing the property or supposedly 'urgent' the sale."
Author: RealNet
