Offer to Purchase Explained (Part I)

Essentially an Offer to Purchase is an agreement that contains the terms and conditions for the purchase and sale of a property. Both parties need to come to an agreement about all sorts of issues before the document is signed. Everything that is agreed upon must be recorded in the offer to Purchase document such as the names of the Seller and Buyer, The information about the property in question as per the Title Deed, The Standard and Special Conditions of the Sale, Date of Occupation and Occupational Rent, The specific fixtures and fittings that stay as part of the property, etc.

The Conditions of the Sale
In order for a buyer to get a mortgage to finance the purchaser of a home, the Offer to Purchase may include a condition that the sale is subject to bond approval being obtained from the buyer’s bank within a realistic amount of time. This usually comprises a time limit of seven to 10 working days.

In some cases the sale can be subject to the buyer’s home being sold first, and the time limit for this also has to be agreed upon. Once confirmation has been received that the loan has been approved or his home has been sold, then the buyer must notify the agent immediately to ensure that their offer becomes unconditional, enabling the process to continue. This is an essential part of any sale, as should the Offer to Purchase terminate, the entire agreement will become null and void.

Buyers should never sign an Offer to Purchase until they are perfectly happy with everything that is written in it, because once they signed and it has been accepted in writing by the seller, they will be legally bound to the transaction. Read each clause in the contract and make sure you understand everything. Ask the agent questions about everything you are unsure of. If you are still not sure, get your lawyer to read it and give advice where necessary. If you want to make changes, fill in and initial each of the changes.

Once the sale has been negotiated, the deposit or any other money paid up front should be placed in a trust account (at the attorney) until transfer of ownership is completed, with interest being for the benefit of the purchaser. If used correctly, the Offer to Purchase makes the buying and selling of a property as transparent as possible, however, it needs to be clearly understood by both the Seller and the Buyer.

Special conditions constitute an agreement that are additional and not part of the standards contract.

- With Compliments from the REMAX team