It is vital to realise that an offer to purchase a property is a legally binding contract and that you cannot get out of it without incurring onerous financial penalties.
“You should therefore be ready to purchase the property before you put in your offer,” advised the chairperson of the Seeff Property Group, Samuel Seeff.
He added, “A property is a long-term purchase and you need to ensure you make the right decision before putting in the offer. You cannot put more than one offer in at a time and once that offer is in, it is binding unless it lapses due to your inability to fulfill any potential suspensive conditions.”
Seeff said these are some of the things that you need to consider before doing so:
• That you can pay the purchase price:
If you need a home loan to help you buy the property, you should do a formal prequalification so that you know how much you can buy and that you will be able to secure a home loan.
• That you have cash available to put down as a deposit:
Generally, only in the case of qualifying first-time buyers will the banks grant a home loan to cover the full purchase price. In all other instances, the buyer will need to put down a deposit. Currently, the average deposit requirement is around 10%.
• That you have cash available for the transaction costs:
This can be considerable and include transfer duty, attorneys’ fees, bond registration costs and other incidentals. The money must be available upfront and usually becomes payable once the Conveyancing Attorneys start the transfer process.
• That you have all the necessary documents:
You will need certified copies of your personal documents (ID, proof of address, marriage certificate, etc.) and documents required for a home loan application such as proof of employment and income and three months’ recent bank statements.
• That property will meet your future needs:
For example, if you want to make alterations or build on and the property is part of a community scheme what the restrictions or regulations are, or things like visitors parking or what you can put in your yard or on your balcony?
• That you have done a proper walk-through and inspection:
You should be quite sure that you want to buy the property because an offer to purchase is a binding legal contract. You should also familiarise yourself with the neighbourhood, amenities, schools, and the daily traffic commute.
