It is vital to realise that an offer to purchase a property is a legally binding contract, and you cannot get out of it without incurring onerous financial penalties.
You should, therefore, be ready to buy the property before you put in your offer, says Samuel Seeff, the chairperson of the Seeff Property Group.
A property is a long-term purchase, and you must ensure you make the right decision before putting in the offer.
You cannot put in more than one offer at a time, and once that offer is in, it is binding unless it lapses due to your inability to fulfil any potential suspensive conditions.
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Seeff said these are some of the things you need to consider before doing so:
• That you can afford the purchase price.
If you need a home loan to help you buy the property, you should do a formal prequalification to know how much you can buy for and that you can 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 needs to put down a deposit. Currently, the average deposit requirement is about 10%.
• That you have cash available for the transaction costs.
These can be considerable for transfer duty, attorney 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.
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• That you have all the necessary documents.
You will need certified copies of your personal documents (ID, proof of address, marriage certificate and more) and documents required for a home loan application, such as proof of employment and income and three months’ recent bank statements.
• That the property will meet your future needs.
For example, what would the restrictions or regulations be if you want to make alterations or build on, and the property is part of a community scheme? Also, things like visitors’ parking or what you can put in the yard or on the balcony.
• That you have done a proper walk-through and inspection.
You must be sure you want to buy the property because an offer to purchase is a binding legal contract. Consider familiarising yourself with the neighbourhood, amenities, schools and daily traffic commute too.
