SELLING YOUR PROPERTY? READ THE OFFER TO PURCHASE BEFORE YOU SIGN IT

The property market is busy, and many homeowners want a sale signed before the holidays. The offer to purchase is usually the first document a seller sees, and it’s often signed on the spot, on the agent’s standard form. Once it’s signed, it’s a binding contract. These are the six points we most often see sellers overlook.

1. Only a signed, written agreement counts

The Alienation of Land Act 68 of 1981 requires the sale of land to be in writing and signed by both parties in wet ink. A verbal “yes” or a WhatsApp accepting an offer doesn’t conclude a sale. Make sure the final, signed document reflects everything you agreed, including fixtures, furniture and any special arrangements. The same applies to any later changes, such as a reduced price or an extended deadline. If a change isn’t in writing and signed by both of you, it may not be enforceable.

2. Suspensive conditions need realistic dates

Most offers depend on something happening first, such as the buyer getting a bond or selling their own property. If the condition isn’t met by the date in the agreement, the sale normally falls away. Banks, municipalities and offices slow down over December and January, so a 14-day bond deadline that suits the agent may leave you without a sale, and without your other offers, in January. If the buyer first has to sell their own property, ask for a continued marketing clause. It lets you keep marketing your property and, if a better offer comes in, gives the first buyer a short period to waive the condition or step aside. If the buyer is paying cash, the agreement should require proof of funds or a guarantee within a set number of days.

3. Agree on occupation and occupational rent

Transfer can take three months or longer. If the buyer moves in before registration, or you stay on afterwards, the agreement should set the occupation date, the monthly occupational rent and who is responsible for the property in the meantime. Leaving these points out is one of the most common causes of disputes between buyers and sellers. Risk in the property usually passes to the buyer only on registration, so keep your building insurance in place until then. The agreement should also say what happens if the sale falls through after the buyer has already moved in.

4. “Voetstoots” doesn’t cover everything

A voetstoots clause protects you against defects you didn’t know about. It won’t protect you if you knew about a defect and concealed it. Under the Property Practitioners Act 22 of 2019, the seller’s disclosure form must be attached to the agreement, so complete it honestly. Also check which compliance certificates you’ll need to provide (electrical, and gas or electric fence where they apply), as these are normally at the seller’s cost.

5. Know your costs before you commit

The seller usually pays the agent’s commission, the compliance certificates and the bond cancellation costs. Many banks require up to 90 days’ notice to cancel a bond, or they charge interest in lieu of notice. Give notice early so it doesn’t eat into your proceeds. Transfer also can’t register without a rates clearance certificate from the municipality, which usually means paying rates and service charges several months in advance. Any overpayment can generally be reclaimed after registration. If the property isn’t your primary residence, capital gains tax may be payable, so speak to your tax adviser early.

6. Choose your conveyancer and protect the deposit

The seller traditionally appoints the conveyancer who will attend to the transfer, but agents’ standard forms sometimes fill in a name for you. Make sure the conveyancer is someone you are comfortable working with. Any deposit should be paid into the conveyancer’s trust account and invested in an interest-bearing account for the buyer’s benefit until registration, and the agreement should say so. This protects both parties if the sale is delayed or falls through.

The bottom line

An offer to purchase is easy to sign and expensive to get wrong. A short review by an attorney before you sign can save you months of delay or a dispute later. If you’re selling, or thinking of selling, contact us before you put pen to paper.